The Nordics in pole position for automotive innovation

Image via Volvo

Image via Volvo

By Dennis Mitzner

In the Nordic region, automotive innovations are a direct outcome of the qualities global tech audiences generally associate with the region: a mindset of problem solving, strong engineering and software skills and an environmentally conscientious approach to technology.

Scandinavians are early adopters, especially when it comes to electrification but also in adopting autonomy and embracing the shared economy proposition
— Peter Carlsson, Swedish investor and entrepreneur, and the former Chief Procurement Officer and Head of Supply Chain at Tesla Motors

Denmark was one of the first testing grounds for the once celebrated Better Place’s fleet of electric cars. In 2010 the company partnered with Denmark's Dong Energy, in a €103 million Euro (770 million Danish Kroner) investment to introduce electric cars and infrastructure to Denmark. Better Place filed for bankruptcy in 2013 bringing the ambitious project to a bitter end.

Until 2015 electric cars sold in Denmark were exempt from car tax (up to 180%), but in January 2016 electric cars were imposed a 20% tax of the purchase price. As a result, Danish e-vehicle sales have plummeted ever since.  

Quest for alternative modes of transportation has continued in Denmark. Soren Halskov Nissen, the strongman of Danish automotive tech, founded Drivr, cloud-based ground transport platform for taxi and private hire companies and Spiri, an on-demand carpooling service - both companies located in Copenhagen.

Copenhagen, together with Gothenburg and Malmo, comprise the axis of Nordic automotive knowhow.  Volvo has been at the forefront of developing self-driving tech and in mid August the company announced an industrial partnership with Uber to collaborate on autonomous car development. Earlier this month Uber’s fleet of self-driving Volvo’s were unleashed to the joy of the locals.

In Helsinki, one of the world’s first self-driving bus experiments was launched to supplement public transportation. Since the Finnish law does not require vehicles to have drivers, the city is ideal for such a test.

Ambitious and publicity-seeking stunts are attracting the attention of the public, but AI, the backbone of self-driving tech, is still a few years from prime time.

Harri Valpola, the CEO of Helsinki-based The Curious AI Company says the industry is not far from self-driving technology equal to the human ability of seeing and reacting:

It depends on the question whether we can drive in Silicon Valley (controlled environment) or are we talking about driving everywhere, what about Bangalore or In Lapland during a snowstorm? Humans are now far better in perceptual grouping, but in a few years time I believe we will have an artificial system that reaches the human level in this, too
Image via Volvo

Image via Volvo

Volvo bets big

Signifying Volvo’s seriousness in leading the self-driving future, the company recently announced that it plans to employ 400 engineers to work in software development in Volvo’s Gothenburg headquarters.

We have the strong ambition to retain and extend that leadership, so we need to ensure that we capture the best engineering talent out there. This new recruitment drive is a reflection of that ambition
— Peter Mertens, Senior Vice President for Research and Development at Volvo Cars

Just over a week ago on September 9th, Volvo announced it had produced the first autonomous car for the Drive Me project in Gothenburg. The project, initiated in 2013, is scheduled to start in 2017.

The speed of development of self-driving tech in the Nordic vertical also comes down to the question of how open the software will be. Can it be updated continuously with a relatively open ecosystem or are companies looking to build a closed end-to-end ecosystem? Will they follow the example of Apple or will they opt for a more inclusive approach?

One potential scenario would be for a big player like Volvo - with the support of the likes of Uber - to harvest the Nordic region for the best possible tech instead of a scenario in which we see several competing actors, all secretly developing their tech with the hopes of conquering the world.

Considering the vast array of different technologies used in the automotive industry - from IoT and software to cybersec - it would make sense for the actors to find ways to join forces, in the spirit of the Nordic consensus.

Carlsson comments:

I think the auto industry need to embrace the fact that over the air software updates can enhance products over time and even correct flaws in design. That is really a paradigm shift. The industry also need to embrace the fact that a small start up cannot manage the liability associated with doing business

In the spirit of cooperation and making the end goal a tad bit more attainable, on September 9th, Volvo and Autoliv, Stockholm-headquartered maker of automotive safety systems, announced a new joint venture to develop next-generation autonomous driving software.

According to a statement released by Volvo, the new company will develop “advanced driver-assistance systems (ADAS) and autonomous drive (AD) systems for use in Volvo cars and for sale exclusively by Autoliv to all car makers globally, with revenues shared by both companies.”

Nordic companies, known for their high level of safety and security are at an advantageous position to take charge of the development of automotive technologies. When it comes to self-driving cars, safety is by far the number one concern of consumers and manufacturers alike.

I do think that the safety culture created by both Volvo and Autoliv is a good foundation for this work and that the specific knowhow of connectivity, sensors and visions systems in the Lund region is going to create interesting things going forward
— Peter Carlsson

Time will tell how the surge in the Nordic automotive industry will play out, but considering the level-headed and calm approach to doing things, the Nordic region will likely play a central role in developing the car of the future.

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