Renault-Nissan Sees Green In Silicon ValleyBy Danny King July 13, 2011
Renault and its sister company Nissan have joined the ranks of automakers, including General Motors, BMW and Volkswagen, in opening offices in California's Silicon Valley to speed up technological advancements in its zero-emissions vehicles. The idea is that proximity provides first-hand contact with the type of advanced thinking that propels technology giants such as Google, Oracle and Hewlett-Packard. Renault-Nissan CEO Carlos Ghosn made clear he expected the new office's progress to resemble that of its fast-paced Silicon Valley neighbors and not the more deliberate speed of most automakers in its efforts to address issues such as greenhouse-gas emissions and rising fuel prices.
"We need to be perceived as part of the solution," said Ghosn, speaking in the heart of the Silicon Valley at a Stanford Institute for Economic Policy Research event shortly after the new offices were announced. "We're not going to get there using the same technology...The worst thing is to wait for your engineers to tell you they're ready." Renault-Nissan's new offices will be focused on advanced-powertrain technology and is part of the Renault-Nissan Alliance's $5.4 billion investment in zero-emission vehicles such as the battery-electric Nissan Leaf. The Alliance, which was formed in 1999, intends to eventually sell a half-million electric cars annually by 2013 to boost business against a backdrop of growing concerns of global warming and rising fuel prices. The hope is Renault-Nissan operations such as the Silicon Valley office will help raise EV performance while lowering costs.
Renault-Nissan even went as far as to open its offices directly across the street from the Mountain View, Calif., headquarters of Google, the world's largest Internet search engine. That company last month said it would have the largest single-workplace batch of electric-vehicle charging stations with the deployment of more than 70 of Coulomb Technologies' ChargePoint stations and plans for another 250. Google also said it would have 30 Nissan Leaf battery-electric cars and Chevrolet Volt plug-in hybrid electric vehicles as part of its so-called Gfleet, which employees may drive around Google's campus after they use the company's biodiesel commuter-shuttle system to get to work.
A Matter Of Time
To auto industry watchers, it was less a question of if Renault-Nissan would open offices in the Silicon Valley and more about when. BMW has operated offices in Palo Alto, near Stanford University, since 1998. That same year, Volkswagen opened its Electronics Research Laboratory (VERL) in Palo Alto before later moving it to Belmont, about a mile from the headquarters of Oracle, the world's largest database-software maker. General Motors established its Palo Alto research and development office in 2006 and has since developed technology partnerships with local companies such as Google, Cisco Systems and Hewlett-Packard.
"There's a true value of being there to understand how and why things are happening," said Philip Gott, managing director at IHS Automotive, in an interview with AutoObserver. "If you don't have your feet on the ground, you won't have any better of an understanding (of advanced technology) than you would of clothing fashion if you're not in Paris or Milan."
By opening Silicon Valley offices, Renault and Nissan join a group of automakers that have used local contacts to help with advancements that so far have been primarily related to telematics, that is technical advancements for communications and safety purposes. The BMW Group Technology Office specializes in features such as so-called "mechatronics" (the integration of sensor technology), information and entertainment systems, and telematics.
Volkswagen opened the Automotive Innovation Lab in 2009 on Stanford's campus in Palo Alto. Last year, Volkswagen's Audi division began featuring both Google Maps and Google Earth imaging as part of the A8's navigation system. Meanwhile, General Motors employs about 10 scientists and business-development specialists at its Silicon Valley offices, which developed the GM-licensed Autonet Mobile WiFi Hotspot option that lets vehicle occupants locate WiFi coverage at highway speeds
Such advancements are paying off for the automakers. The installed base of cars with satellite-connected infotainment, safety and roadside assistance systems such as General Motors' OnStar and Toyota's Entune will surge to 210 million vehicles in 2016 from 45 million at the end of this year, ABI Research said in a report released in April. And further driving such innovation is demand for smartphone applications that can double as a telematics tool such as remote-control door-lock systems, battery diagnostics and music streaming.
Overall, almost two-thirds of new vehicles shipped in 2016 will include factory-installed telematics, up from less than 10 percent last year, ABI said in a December 2010 report.
Such advancements are turning cars into what Pike Research Senior Analyst Dave Hurst termed "rolling computers" and reflect how engineers from the need-it-now Silicon Valley and workers from the more deliberate auto industry are learning how to adjust to each other's respective paces.
"If your cell phone or computer crashes, it's a couple of minutes. If the telematics crashes, your car could go off the road. There's a very different cost to the technology that's running it," Hurst said in an interview with AutoObserver. "The automakers are going to want to take their time to study it from every angle, whereas, in the Silicon Valley, they'll say, 'Let's throw it up there and see what comes up.' But all of that is slowly fading and people are coming to a consensus."
Such partnerships are all the more timely as more Silicon Valley technology will likely to be used to address the automakers' efforts to meet progressively more stringent emissions and fuel-economy standards in both the U.S. and Europe by developing plug-in hybrid-electric, battery-electric and other advanced-powertrain vehicles. Those efforts dovetail with a San Francisco Bay Area attitude that's long been known for its environmental efforts and progressive thinking towards alternative-sourced energy.
That said, up until this year, the local effort to build "greener" cars was primarily limited to Tesla Motors, the maker of the high-end all-electric sports car. The Palo Alto-based company, which was founded in 2003, debuted the $109,000 Roadster in 2008 and went public last year. Tesla now has company in that department, however. In addition to Renault-Nissan, GM earlier this year invested about $7 million in Envia Systems to help the automaker further advance lithium-ion batteries for electric-drive vehicles such as the Chevrolet Volt. Envia is based in Newark, Calif., about a 12-mile drive across the Dumbarton Bridge from Palo Alto.
Granted, the high cost of labor and real estate might keep Silicon Valley's role in automotive development strictly in the technology-advancement stage. Tesla, which last year took over the old NUMMI plant in Fremont, Calif., that had been previously operated by Toyota and General Motors, is the only automaker assembling vehicles in the area and could well remain so. Still, more automakers are likely to follow in Renault-Nissan's footsteps by either opening Silicon Valley offices geared towards advanced powertrains or boosting the emphasis on such technology at existing local operations, said Hurst. "Battery-management systems is a key area" that may be helped by Silicon Valley know-how, according to Hurst. "I think we'll see additional announcements from other automakers."