Concordant Crossroads: Regulation and Innovation in the Automotive Industry

0
227


Recently, Thomson Reuters Legal Executive Institute, along with co-sponsors Foley & Lardner LLP and Ballard Spahr LLP, hosted the “Concordant Crossroads” summit in New York City.  The esteemed keynote speaker, panelists and moderators provided deep insights into the unique and wide-ranging disruptive forces shaping the modern mobility industry.

During the keynote address, Carla Bailo, President & Chief Executive Officer, Center for Automotive Research, provided a vision of the future of mobility and evolving consumer behaviors.  For a company to be successful in view of the changing consumer behaviors, Carla stated that companies should establish analytics capabilities and aim to provide the best, most personalized user experience.  For example, Carla indicated that advanced algorithms will be the key to distinguishing a company’s vehicle or mobility service because most companies are basically using the same hardware (e.g., same sensors, LIDAR, radar, sonar, cameras and maps).  As such, the company’s “secret sauce” that provides the competitive differentiator and advantage lies in its advanced algorithms.  Further, Carla predicted that an additional key competitive differentiator will revolve around the quality and personalization of the user experience that a vehicle or mobility service can provide.  While there are numerous opportunities, Carla also cautioned that companies should be prepared for product and business-line shifts because consumers are trending towards only wanting to pay for the type and amount of services they use.  Since traditional car companies specialize in designing and building cars and delivering cars to dealerships, Carla sees the continuing need for partnerships between traditional car manufacturers and technology companies in order to address the changing landscape.

After the keynote address, the first panel moderated by Steve Hilfinger, Partner at Foley offered a brisk take on new and emerging issues surrounding the future of the automobile industry and insights into the current global M&A environment, legal issues and opportunities in industry-wide joint ventures, IP and licensing concerns, and domestic and international compliance.  With regard to M&A deals, Ellen Clark, Managing Director of Greenwich Capital Group, indicated that it is necessary to approach deals with mainline auto companies differently than deals with technology companies due to different valuations, different goals, and different cultures.  Further, Pavan Agarwal, Partner at Foley pointed out that auto companies and technology companies may have different perspectives on Intellectual Property, which can impact IP ownership, licensing, or access to background IP.  Kimberly Y. Chainey, Associate General Counsel, Global M&A, Strategy and Innovation, Avis Budget Group, Inc., illustrated the large number of deals and partnerships occurring between different types of companies in the automotive and technology sectors.  For example, Kimberly stated that Softbank is an investor in many of the top ride hailing companies across the world.  Kimberly also emphasized having a global perspective with respect to new functionalities and innovations.  For example, Kimberly noted that while not yet available in the United States, it is already possible in Norway for a user’s preset radio stations and temperature to be loaded when they request a car, and that it is already possible in Singapore to use a group car service that loads your golf clubs in the trunk of the car before picking you up.  However, as companies increase their global activities, investments, and collaboration, Christopher Swift, Partner at Foley emphasized that it is critical to take into account US federal regulations and policies that scrutinize international transactions.  As far as new opportunities, Kimberly predicted that fleet management will become a large opportunity that companies such as Avis Budget are uniquely positioned to tackle due to their vast experience in maintaining and managing hundreds of thousands of vehicles around the world.

The second panel moderated by Neal Walters of Ballard Spahr discussed legal aspects of autonomous vehicles, including the impact of state and federal regulations, class action litigation trends, product liability considerations, and consumer training and education requirements.  The panel highlighted that new technology is changing the way cases are litigated.  For example, it is no longer necessary to devote a large amount of time towards reconstructing a crash scene because of the large amount of sensor data collection available on the vehicle.  However, more time is now being spent determining how the vehicle was designed and what the “actual” design of the vehicle on the road was by taking into account over-the-air updates and different software versions.  Another new issue being litigated revolves around comparative negligence or contributory negligence arising from “hand-off” between manual driving to various levels of self-driving.  Chris Grigorian, Partner at Foley noted that there is currently a lack of safety standards on self-driving technology.  This lack of safety standards may pose challenges for litigation because no baseline standards for self-driving technology have been set.  Further, Chris pointed out that to establish standards on self-driving technology, the National Highway Traffic Safety Administration (“NHTSA”) will increasingly interact directly with suppliers, as opposed to just the auto manufacturer, due to the suppliers’ role in developing the software and underlying technologies.

The summit concluded with a panel moderated by Philip N. Yannella of Ballard Spahr focused on data privacy, cybersecurity and risk arising from nascent technologies and network connectivity collecting upwards of 30 terabytes of data a day on individual drivers.  Indeed, due to the large number of networked sensors on every vehicle, every connection must be secure.  To address the new mobility models and risks, new types of insurance plans are being developed, such as rider insurance for use in ride sharing services. Finally, it was summarized that autonomous vehicles may drive down insurance prices, increase homogenization, and decrease the longevity of a single vehicle because it will be driven much more (more up time).

In conclusion, the summit highlighted the current and future states of mobility and autonomous vehicles, which are quickly blending together as automotive and technology companies move forward quickly in this space.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney.
This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary.
The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites.
In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.



Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here