Testimony Jeff Klei, Pres, NA Automotive Continental

Testimony Jeff Klei, Pres, NA Automotive Continental

The Testimony of Jeff Klei President, North America Automotive Divisions Continental AG
Energy and Commerce Committee in front of the
Digital Commerce and Consumer Protection Subcommittee
on
“Self Driving Cars: Levels of Automation”
March 28, 2017

Good morning Chairman Latta, Ranking Member Schakowsky, and members of the Subcommittee
on Digital Commerce and Consumer Protection. I thank the Subcommittee for the opportunity to testify
today on behalf of Continental. My name is Jeff Klei, and I am the President of Continental Automotive
Systems in North America.

Continental is a leading Tier 1 supplier that develops intelligent technologies for transporting people
and their goods. We provide our automotive customers with sustainable, safe and affordable solutions
that enhance automotive safety. In 2016 we generated more than $43 billion in sales within our five
divisions, Chassis & Safety, Interior, Powertrain, Tires, and ContiTech. Continental employs more than
20,000 employees in the U.S at more than 80 facilities located in 26 states and has more than 220,000
employees in 55 countries worldwide.

In 2015 there were more than 35,000 lives lost in the U.S. due to traffic crashes. Projections for 2016
are expected to increase to more than 40,000 fatalities, a level we haven’t seen in a decade. While this is
an alarming number, it is even more startling at a global level—more than 1.2 million people die in
roadway crashes and another 50 million are injured. This is unacceptable and reversing this trend is what
motivates each and every employee at Continental.

In the last 45 years the U.S. has experienced a relative declining trend in traffic fatalities with respect
to an increased number of vehicles on the road and number of miles driven. This is due in large part to
improved vehicle safety technologies. In the early 1970s the number of injuries and fatalities were at an
all-time high. The introduction of the seat belt helped to reduce the total number of traffic fatalities by
10,000 in a few short years. In 1983, the number of fatalities was the lowest in 20 years due to the
introduction of anti-lock braking systems. As numbers began to rise again, the airbag became standard in
vehicles reducing injuries and fatalities down to its lowest number in 30 years. The introduction of
electronic stability control in the mid-1990s helped to reduce traffic accidents to the lowest number in 50
years. Continental projects new crash-avoidance technologies will once again reverse the recent increase
in fatalities as the auto industry moves toward a more widespread implementation of Advanced Driver
Assist Systems (ADAS).

Innovation has always been at the heart of the automotive industry. From the original concept of the
automobile in the late 1800s, the mass production lines pioneered in Detroit, to today, the automotive
industry has always invested in research and development to make their products safer, more reliable and
more affordable. Today, we are witnessing the automotive industry evolve from a crashworthiness
mindset, where manufacturers try to make the passenger cabin more survivable in the event of an
accident towards a crash avoidance mindset—after all, the best way to survive a crash is to avoid one in
the first place.

Continental, and our dedicated employees, are committed to developing Safe and Dynamic Driving
technologies towards Vision Zero. Vision Zero means a future with zero traffic fatalities, injuries and
ultimately zero accidents. Such a future can only be achieved with the help of innovative active and
passive safety, driver assistance, and automated driving technologies. As Continental brings these
technologies to market, we exhaustively test products, and subsystems, as part of a larger system of
advanced driving assistance technologies that will be integrated with a variety of components by original
equipment manufacturers.

Our Vision Zero philosophy is embedded in each technology we develop as we continue to enable
automated driving. At Continental, we describe our systems approach through three primary actions—
sense, plan, and act. Whether the technology simply assists the driver like many systems on the road
today, or ultimately takes over the driving task completely, it first must SENSE the surrounding
environment and gather the necessary data that can be interpreted. Sophisticated sensor systems can help
eliminate human error and distractions by providing 360-degree awareness of the road at all times. The
data gathered from the sensors is then analyzed to identify obstacles or hazards. Our systems then
dynamically develop a PLAN to determine how to assist the driver. Once that plan is in place, the
systems will ACT to execute the plan to safely and comfortably pilot the vehicle and in certain cases
avoid a hazard or crash situation. Our Sense, Plan, Act approach is the foundation behind Continental’s
active safety and Advanced Driver Assistance System technology, and is a key component to advancing
automated driving systems. We believe that when fully automated driving is possible, traffic fatalities
can be reduced by 90 percent because that is the percentage of accidents that are caused by human error.
Continental has been an active participant globally in policy discussions and initiatives with
governments, automotive industry partners, trade associations and other standard setting organizations.

The collaborative efforts to help establish consistency within the emerging self-driving market has been
crucial to the advancement of automated driving technologies. Continental is currently engaged with the
Department of Transportation’s Smart Cities Program. Several of our divisions are working together to
develop a highly sophisticated intersection in Columbus, Ohio, with vehicle and integrated infrastructure
technologies that will help save the lives of vehicle occupants as well as pedestrians while improving
transportation efficiency in urban environments. We support the National Highway Traffic Safety
Administration’s recent adoption of the SAE International definitions of automation, as we believe it is
beneficial to helping educate the public in order to distinguish between different automated technologies
and garner public acceptance.

Continental is one of the leading suppliers in this market, with a complete portfolio of technologies
for all defined levels of automation. Each innovative safety feature undergoes an extensive testing
process before becoming available to the market. As a supplier, we currently develop a multitude of
innovative technologies that can save lives and enhance the driving experience under the Level 0 to
Level 2 definitions of automation. These products are designed based on the needs of our customers to
assist the driver in interpreting the surrounding environment and control the vehicle in order to prevent
an accident from occurring.

Continental has been integral in the deployment of current crash avoidance technologies such as lane
keep assist, rear back up assist, automatic emergency braking, and adaptive cruise control, to name a few.
These crash avoidance technologies are the building blocks to higher levels of automated driving and
need to be embraced as crash avoidance technologies that save lives. All of these technologies can be
found throughout the fleets of most vehicle manufacturers.

As the industry moves forward towards Level 3 automation technology and beyond, Continental is
positioned to supply public and personal transportation needs with the safest and most advanced
technology available on the market. The world and the behavior of drivers within it are ever changing,
and the vehicle must adapt to these changing trends. Our children seem to rely on smartphones more so
than vehicles. Living in a world of distractions has become commonplace. Automotive technology must
be developed accordingly. That is why Continental has put a great deal of effort into Human Machine
Interface technology. We want the driver to be aware of their surroundings, be aware of what the
systems in the vehicle are doing, and be aware of when it is safe to relinquish control of the vehicle and
when to reengage with the vehicle. In addition to informing the occupants, keeping them safe, and
pedestrians safe, we must also secure the systems within the vehicle. As part of system development for
Highly Automated Driving, we focus on redundancy of vehicle safety systems. That is why we are
developing complimentary systems and technologies that support existing safety systems in the vehicle’s
architecture.

Since 2011, we have continued a pursuit of testing and developing highly automated driving with
next generation technologies like automated parking, cruising chauffeur and a complete self-driving
vehicle in combination with V2V/V2X technology. We were the first supplier in the U.S. to be awarded
a testing license for automated vehicles in Nevada and are currently testing our third generation
automated vehicle on highways and roads throughout the country and around the world. We are
currently integrating sophisticated technologies such as high resolution flash lidar, which will expand the
vehicle’s detection capabilities. This is the same technology that has been deployed on space shuttles at
the most advanced technical level, and we are working to utilize its potential for road applications. But,
our continued efforts in this direction would benefit greatly from an investment in infrastructure that
promotes vehicle to X communication, a dedicated spectrum communication band that can be utilized by
current and future safety systems, and harmonization of safety laws that allows for the full real world
testing of these technologies.

The challenges in broadly testing this new and innovative safety technology across the country are
great. The industry currently faces considerable uncertainty on state and federal requirements that would
require clarification from the federal government’s exclusive authority to regulate all motor vehicles.
The safe commercial deployment of potential life saving technology depends on the ability to extensively
test on public roads under all conditions. In order to envision a future of full automation, the government
must review federal motor vehicle safety standards that would allow for vehicles that may not be under
the full control of a driver at all times. Similar to the need of improved road conditions as automobiles
transitioned from rural landscapes to metropolitan areas in the early 1900s, we need a road infrastructure
that complements automotive advancements, and a legal framework that supports a new system of
mobility.

The automotive world is one of excitement. Software developers are becoming automotive suppliers,
automotive companies are becoming software developers, and our vehicles are becoming our smartdevice.
The world of mobility has the capability of expanding to unimaginable independence and
personal freedom without sacrificing the safety of future generations. Continental stands at the ready,
alongside our industry colleagues, to work with the Committee and Congress in helping construct laws
that foster innovation, enable mobility, and create a safer environment for the public.

Thank you again, Chairman Latta, Ranking Member Schakowsky, members of the Subcommittee on
Digital Commerce and Consumer protection and staff, for the opportunity to testify at today’s hearing.

About the Author:

L ou Ann Hammond has a work history in the energy and transportation field. Starting with Chevron Corp. in finance and accounting from 1978 to 1986. Hammond was exposed to the accounting, selling, management, and transportation of petroleum and all the alternative energies Chevron explored for during the turbulent 1970s.Hammond is the founder and owner of the first privately owned automobile website www.carlist.com. Carlist is the longest running used car database, since 1986, even prior to the Internet. Hammond's most recent website, www.drivingthenation.com, covers a broader range of subjects than solely the automotive or the energy industry. Driving the Nation encompasses both automotive and energy issues to show the audience how dependent we are on both. Hammond's varied background in the petroleum and automotive industry gives her an analyst insight into the myriad levels of automobile and energy topics.