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Cars, technology and the modern economy

Cars, technology and the modern economy
Published 1 Oct 2015   Follow @SamRoggeveen

Yesterday electric car company Tesla launched the first-ever fully electric SUV, the Model X. Despite the fact that the company is not profitable, there is tremendous buzz around Tesla and its potential to transform the auto industry with electric cars that have both the battery power to take us as far as we want and the style in which we want to travel.

Apart from being fully electric, Tesla is also something of a market leader when it comes to car electronics — in fact, its popular Model S has been described as a computer designed as a car. Which brings me to this recent NY Times story on the complexity of modern motor vehicles:

New high-end cars are among the most sophisticated machines on the planet, containing 100 million or more lines of code. Compare that with about 60 million lines of code in all of Facebook or 50 million in the Large Hadron Collider.

It also reminds me of an anecdote shared by former German Chancellor Gerhard Schroder's foreign policy adviser Michael Steiner, in a recent interview with Spiegel. This story concerns a late night conversation between Steiner's boss and then British Prime Minister Tony Blair, at a time when German car companies were buying up boutique British brands such as Rolls Royce: 

I can remember an evening in London when he was sitting together with British Prime Minister Tony Blair. It was two or three in the morning and the two were, let us say, in an advanced social state. Suddenly Blair said: "You can have them all, Gerd, all the cars that we've built here: Rolls Royce, Bentley, Rover. That is the 19th century, that is steel, that isn't the future. Schröder answered: "Tony, you have no idea about the economy. You don't get it. The cars that we build are drivers of technology. Already today, they contain the most modern electronics and that will be even more the case in the future. That is the platform for the real future." Back then, I was deeply ashamed for Schröder. I thought the future was the financial markets and virtual reality. And then comes Schröder with his old fashioned stuff. And who was right? Gerd Schröder.

I'm not sure Steiner would be sounding quite so triumphant in light of the Volkswagen scandal, but you see the point.

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