2018 AutoMobility LA Keynote Ted Klaus, VP - Strategic Research, Honda R&D Americas, Inc. Good afternoon. It is exciting to be here today. Let me begin by thanking everyone at AutoMobility LA for this opportunity to share our thinking with you. As the leader of Strategic Research for Honda R&D in North America, my job touches many different aspects of our business, helping guide our new product and technology strategies, including significant opportunities in the connected vehicle space. Today, I want to share with you Honda's vision for collision-free mobility in the future and how we are turning this vision into action. My last major assignment was leading global development of the Acura NSX. You might look at a supercar as the antithesis of the driverless vehicles that dominate visions of future mobility. Heck, we spent an incredible amount of time perfecting the look and feel of the steering wheel for the NSX. And now many automakers are talking about removing the steering wheel entirely. But what links the development of NSX to our connected and autonomous future is the same guiding force that has led Honda from the start. It was our founder's belief that the purpose of technology is to help people. So, while our goal of creating a collision-free future may not be unique, I firmly believe that we are unique in our approach to the challenge. At Honda, we take a holistic view that starts with, but is not limited to, only the driver. Honda looks at the future of mobility through the lens of all road users—encompassing the entire transportation ecosystem—including next-generation connected, autonomous and electrified vehicle technology, as well as the complex interactions of people, vehicles and infrastructure, and of course the important roles of government, academia and our business partners. We also recognize the important role of collaboration in this space, and we made a bit of news recently with the announcement of Honda's partnership with GM and Cruise to jointly develop a SHARED autonomous vehicle. I don't have any news to make on this project, though our operations in Ohio will definitely be involved. Honda is conducting our own research and development of connected and autonomous vehicles for personal use. And in this area, we're developing autonomous vehicle technology targeting SAE Level 3 by 2020 and Level 4 vehicles for personal use by the year 2025. But our goal isn't autonomy for autonomy's sake. Our efforts are aimed toward a more essential idea for future mobility. Fifteen years ago, we established a global safety direction called "Safety for Everyone." Our concept recognized the fact that Honda is a company that creates different types of mobility, and we recognize that to save lives we cannot look only at protecting the driver and occupants of a vehicle. We have to look at the entire ecosystem and advance safety for everyone who shares the road—other cars, pedestrians, bicycles, motorcycles—you name it. In other words—all road users. So, Safety for Everyone means working toward a collision-free society where all road users can safely and confidently enjoy the freedom of mobility. That is the core of our vision. A critical step in this direction came with the deployment of our advanced safety and driver assistive systems we call Honda Sensing and AcuraWatch. Today, we have more than 1.7 million Honda and Acura vehicles with these advanced systems on U.S. roadways and we will continue to increase the standard application of these systems with full deployment by 2022. Data shows that Honda Sensing® is reducing both the frequency and severity of vehicle collisions on the road today. In addition, Honda Sensing® performs another important function— acting as both a technological and perceptual bridge to the more highly automated vehicles of the future. Honda Sensing is not only giving our customers an understanding of technology-assisted driving. We're providing them with confidence in the value that connected and autonomous vehicle technologies will bring to their mobility future. And let's face it, customer confidence is a key challenge. Depending on which study you read, between one-half to two-thirds of Americans say they are uncomfortable with the idea of self-driving vehicles. Some of that, I'm afraid, ties back to how these systems have been deployed and promoted to consumers. For our part, we've drawn a line in the sand in referring to this first generation of technologies as driver-assistive technologies, Honda has been making clear that, for now, the driver still has ultimate responsibility for the safe operation of the vehicle. And that brings me to a key point. Moving forward, as leaders and innovators in the autonomous and connected vehicle space, we have to be realistic and transparent in our conversations with each other, with other stakeholders and with customers. To that end, I want to be as clear as I can in talking about what we see as both the opportunities and challenges of realizing our dream for a collision-free mobility future. Let's start by considering how we drive. The act of piloting a motor vehicle is a highly complex task. The human eye, ear and brain are still far and away the most advanced sensing and data processing system that we know. Automated technology as it exists today can significantly mitigate driver error, particularly issues related to distraction or reaction times. In certain conditions, such as freeway driving in decent weather conditions, we're already close to autonomous driver capability. The jump from there to fully replacing you as the driver, in all scenarios—congested urban settings, a mall parking lot, or your kids' school drop-off—is a challenge of a completely different magnitude. Moreover, any single autonomous vehicle relying solely on on-board sensors faces fundamental limits to what it can see and sense. Therefore, anything we can do to expand the sensing capabilities of an autonomous vehicle to infrastructure should realize improved outcomes Finally, even if we could make that leap to a fully autonomous vehicle starting tomorrow, it would take decades for the technology to saturate the market. So in the meantime, these vehicles have to be able to co-exist peacefully with all road users. This is the real world in which we're operating. Yes, we have a clear vision for a collision-free society. But to get there, we have to understand and respect the challenges we face. Number one, we have to account for all road users and, like the physician's creed, first, do no harm. It's wonderful to talk about technology's benefits to society in the aggregate, but improvements to our collective safety can't come at the cost of anyone's individual safety. Two, we have to be realistic in our assessment of every technology's capabilities as well as its limitations. At Honda, we have long been guided by what we call The Three Realities Principle. This principle teaches us that when confronted with any problem, you must go to the real place, understand the real situation and make realistic decisions. It doesn't mean we can't be optimistic, but the decisions we make have to be based in reality. Finally, we need to create solutions by taking into account all aspects of a very complex transportation system, not only the vehicles and infrastructure—the total physical, social, regulatory and legal structure of the system. We're not just developing technology, we need to architect desired outcomes. So, we need to account for all the variables in the equation. From a Honda R&D perspective, these are the fundamentals. And one indispensable component of realizing them is the ability to go to the "actual spot." To safely evaluate our technology in a dynamic setting that includes both connected and non-connected vehicles, pedestrians, emergency vehicles and more. In short, the real world. In Central Ohio, our U.S. R&D and manufacturing operations, have worked with our partners in government and academia to develop just such an environment. In 2016, we joined our partners to support Columbus' winning grant application for the U.S. DOT's Smart City initiative. At the same time, the Ohio Department of Transportation joined with a complementary initiative, called the 33 Smart Mobility Corridor. It's a 34-mile stretch of divided highway that connects Columbus, an urban environment, to Dublin, a suburban environment, through Marysville, a rural environment, and ultimately to our R&D center where we have access to closed course proving grounds. Next year, with the installation of DSRC roadside units, the Smart Mobility Corridor will be the longest stretch of continuously connected vehicle-to-infrastructure highway in the world. The corridor will enable us to evaluate a variety of connected and automated vehicle applications all aimed to improve the safety of our multi-modal transportation system. Our commitment to this real-world ecosystem will include connecting more than 200 of our own vehicles, enabling our engineers to study and learn first-hand about the opportunities and challenges surrounding vehicle-to-everything or V2X. This will advance our technologies, but more importantly enable a deeper understanding of the social challenges involved in deploying these new technologies. I'm sure some of you have questions about our use of DSRC versus 5G? The simple answer is we are agnostic. Our system will evolve with the technologies. Within this unique ecosystem, I want to speak to two pilot projects targeted toward our real world dynamic safety. The first is a pilot deployment of Smart Intersection technology in Marysville, Ohio. Our Smart Intersection is more sophisticated than other connected intersection systems that use vehicle-to-infrastructure mainly as a means to communicate stoplight changes in order to smooth traffic flow. Our Smart Intersection system uses four cameras, an image processing system, and a roadside unit to establish V2X communication, allowing connected vehicles and their drivers to virtually see through buildings and other vehicles to more safely navigate busy and virtually "blind" city intersections. Let's take a look. This is how V2X technology can expand a vehicle's capacity to recognize and then intelligently support the human driver or a highly automated vehicle in responding to potential hazards. Our Smart Intersection doesn't require all vehicles or pedestrians to be connected to become part of this connected network. The infrastructure's vision system essentially connects all road users within its line of sight to a connected car. The second of our initiatives involves the 33 Smart Mobility Corridor and a core Honda concept we call Safe Swarm. We first introduced the idea at CES in 2017. And since, we have been conducting closed course testing of this concept in a proving center environment. Safe Swarm takes its inspiration from the natural world. Think of a school of fish and how they move efficiently as a unit, without touching, almost as if connected. Schooling requires coordinated positioning and synchronized movement. This inspired us to think about how this phenomenon in nature can apply to traffic. Using V2X technology, we have developed the capacity for vehicles to communicate with surrounding vehicles, sharing key information such as location and speed. With this information, the driver or in the future, automated vehicle systems, can determine the safest course of action in merging with traffic, or avoiding a road hazard. We can also use this technology to impact traffic in other ways. It can take information from vehicles ahead on the freeway to prevent potential traffic snarls, take early braking action to help avoid a wave of emergency braking, or to change lanes if needed. It does this through an on-board system with V2X communication, working with a network of infrastructure stations along the roadway to ensure frequent communication among vehicles and infrastructure. Let's take a look at three common traffic problems and how Safe Swarm technology provides a solution. Cooperative Merge Merging is always a challenge so let's see how this technology can make a dangerous activity safer. We call this Safe Merge. Safe Merge Safe Swarm's vehicle-to-vehicle communication uses industry-standardized protocols that ensure that all vehicles, regardless of brand, can benefit from this technology. The second scenario is Hazard Protection. Road hazards are a major cause of traffic collisions and here's how Safe Swarm technology can help. Hazard Prediction The final scenario deals with phantom traffic jams. We've all experienced the frustration of sitting in traffic congestion caused by a collision that has long since been moved out of the way. Phantom Traffic Jam Let's take a look at how Safe Swarm mitigates this challenge. This is why we're so excited about the potential for this technology. Today, I'm pleased to announce that in 2019 we have plans to evaluate Safe Swarm in a real-world environment, on the 33 Smart Mobility Corridor. We will have more information about this in the coming months and we look forward to sharing the results perhaps at a future AutoMobility LA. Together, these initiatives, Smart Columbus, the 33 Smart Mobility Corridor, our pilot deployment of Smart Intersection and Safe Swarm technologies comprise one of the most comprehensive, multi-modal smart transportation ecosystems on the planet. And we intend to leverage that to its fullest extent as we advance our technology and our understanding of how it can be most effectively deployed all to achieve a zero-collision society We see boundless opportunity within this ecosystem. But we will maintain our realistic approach, understanding that the process of building out this connected-car society will undoubtedly be a challenging one. At Honda, we have a proud history of taking on big challenges for the benefit of our customers and society and using technology to make people's lives better. We have a big and exciting dream for a safer, more enjoyable and more efficient mobility future —a zero-collision, a zero-emission society. But we don't want it to be only our dream. This isn't simply an area of competition, a race to be first, or a run for the money. Competition is a key driver of innovation, and it's essential. But it's also imperative that we consider our higher calling as leaders and innovators in this space. That we seek dialogue and a shared understanding of the fundamental issues and challenges we all face in creating a future that benefits all road users. In this way, we can move from "my world" to "our world." And if you'll please forgive me for the pun—we want to move from autonoME to autonomoUS. This is a shared challenge.We won't just flip a switch and every vehicle will be connected and autonomous. That's why we need to create technology with a clear purpose, introduce it responsibly with a customer focus, and work cooperatively to ensure that the benefit is for all road users. And, that's why we're here. To engage with industry and all of you. Thank you very much!