A Conversation with MSU J-School Alumnus and Detroit Free Press Automotive Columnist Mark Phelan

MSU Today with Russ White

“It's fascinating because it's a mix of things that you could have seen coming and stuff that nobody ever imagined,” says Phelan, in talking about the state and future of the automotive industry. “The move toward electrification and reduced carbon emissions seems to really be gathering speed with vehicles that will become mainstream models. And more customers than ever before are considering whether they should get an electric vehicle. That's the foreseeable part of it, although it may have accelerated more in the last few months than most people expected.

“The unforeseeable is the fact that every automaker in the world is saying, ‘Where am I going to get the computer chips I need to build the cars that people want to buy?’ It is an after effect of the pandemic when automakers thought that sales would be depressed for a really long time. They're happy that sales recovered faster than they expected, but they canceled some of their contracts to buy parts. And the chip makers went out and got other customers.”

How do the auto companies define mobility?

“Sometimes I wonder if they know what they mean by that,” quips Phelan. “It's a word that resonates well with the investment community and with different groups of consumers because it can mean whatever they want. Generally, it breaks down into two buckets. One is developing vehicles that can increasingly take over some, most, or eventually all of the work of driving autonomous vehicles.

“The other half of it is adding services to vehicles that we never thought of before. It's a rare car these days that does not come with the capability of connecting to one of the digital assistants like Alexa.

“The idea is making it easier for people to do more in their cars, to get better directions, to avoid delays, to make reservations for a hotel or place a carry-out order, and all kinds of other stuff. And the reason that the automakers talk about it so much and that the investment community wants to hear about it so much is that it ties into the capability to offer subscription services. The latest buzzword is subscription services.

“Electric vehicles will need considerably less regular service and maintenance than conventional vehicles do. That reduces one of the revenue streams for automakers and dealers. They're trying to find ways to offset that, and subscription services is one of the things that they think can do that. I don't fully understand what they're going to offer that customers will be willing to pay $5, $6, $10 - whoever knows how much – for a subscription to a service. But 8 or 10 years ago, I could not imagine having 5 or 6 streaming services that I pay a subscription for. What will people want to pay extra for?

“All of that wraps up in the idea of mobility, making it easier for people to use their cars, allowing them to do more things while they're in their cars, and making it possible for car companies to sell them things they never thought they wanted before.”

Phelan says the auto companies are going full speed ahead on electrification.

“Perhaps in our lifetimes, there will be a day when gas stations are as rare as the places where you buy hay for your horse. There will always be some gas vehicles that remain. There will be people who collect the classics. There will be events for them. But the big auto makers that can afford the investment, and it is massive investment, they have all reached the point of no return and kept going. They are on the route to electric. Most of the large automakers like General Motors, Ford, Volkswagen, and Mercedes are at the point where they are no longer beginning investment in new gasoline-burning engines. You don't come back from that. They're going to keep the engines that they've got for a while. They're going to keep building gasoline-powered vehicles for quite a while, but all of their capital investment is going into electric vehicles these days.

“It would take some kind of a catastrophic intervening event for them to decide that they had to turn back now. But people worry. I get emails from people saying, ‘I'm thinking about buying a new car and I'm afraid to get a new Honda Accord because I'm worried that I won't be able to get spare parts for it, or I won't be able to buy gasoline in five years.’ Nobody should worry about that.

“There'll be gas stations on every corner for a long, long time. Automakers have to keep building parts for vehicles. And none of them are discontinuing these vehicles. Electric vehicles may be the way of the future, but you need to fund the future with money that you make today. And they make that money selling their current vehicles. There are going to be huge numbers of gasoline and diesel-powered cars and trucks built at least through the rest of this decade.”

Phelan describes his experience with Ford’s new F-150 Lightning and discusses how the country’s leading-selling vehicle could hasten the transition to electrification.

“We’re at a critical point where we need infrastructure to catch up. We need more generation and we need more charging stations. Both of those are things that are being addressed by the proposed infrastructure bills. There's a possibility of the pieces coming together and the change accelerating rapidly from here.”

Phelan talks about connected and autonomous vehicles. And he talks about cybersecurity issues facing our increasingly connected vehicles.

“The recent pipeline hack is the perfect example of why cybersecurity is so important. I was at an automotive cybersecurity conference a few years ago. And people were talking about all of the things that they were doing to prevent these huge, sophisticated actors from being able to hack into their car.

“And then I asked one of them in a side conversation, ‘Why would any of these big multinational organizations, terrorists, criminal, governments, whatever it may be, want to hack my car? The worst they can do is have me run into a wall and is that really worth their effort?’ And the person looked at me and said, ‘No, your car is the gateway to the infrastructure.’ And that's where cybersecurity becomes really important for the whole country.

“Connected and autonomous vehicles are going to have direct links to infrastructure. The more autonomous vehicles we get and the more driver assistance we get, the more we will have vehicles that can communicate with stoplights, with railroad crossings, and with other vehicles on the road.

“Similarly, as you're more connected, you may pay for a charge or for a carry-out order just by tapping ‘purchase now’ on the touch screen in your car. That gets your car connected to financial infrastructure. So, your car is the potential gateway to disrupting basically all aspects of life in America. And that's why connected cars need to have absolute cybersecurity.”

Phelan talks about the evolving field of journalism and discusses its challenges and opportunities.

“At least we are not being called the enemy of the people on a daily basis,” he quips. “But there are still tremendous challenges economically. Newspapers are increasingly getting a handle on it because they have learned how to monetize more services. The Free Press now has premium content that requires a subscription for access on some stories. And we've been very successful in getting people to sign up for that access.

“But when there's a story that's an emergency, as with most of our COVID coverage, we make that and most other newspapers also make that available to everyone for free because we feel an obligation to do that. It's incredibly competitive. We still live in a world where there are far too many voices that are making claims that they can’t support and just making wild charges in general.

“We can all probably think of five examples fr...