Why Your Car Will Become Even More Like an iPhone

Car companies are trying to change a century-old business model: Make a car, sell it, and hope the customer comes back years later to buy another one.

Instead, they’re increasingly developing vehicles as digital devices, with the ability to remotely beam new services and features to the car that could make it easier and more fun to use—while notching extra revenue.

For traditional auto makers, the ability to update cars like an iPhone is in its infancy, though Tesla Inc. pioneered the practice. When Ford Motor Co. was looking for help with the digital transition, it plucked Doug Field, a former Tesla and Apple Inc. executive, to lead the charge in coming up with new digital features to foster an “always-on” connection to customers.

Mr. Field spent five years at Tesla, including as engineering chief, where he helped develop the Model 3. He did two stints at Apple, most recently starting in 2018 as vice president of special projects, before joining Ford in September.

He talked to The Future of Everything about what to expect from the car-ownership experience in the years ahead. Electrification and at least partial automation will be the norm, he predicts. For auto makers, the real differentiator will be offering an immersive experience, transforming the vehicle into a home-entertainment studio, gaming platform or conference room.

“The disruption in the auto industry, driven by software, autonomy and electrification, is going to be as big as anything that’s happened in the last century,” Mr. Field says.

What’s a feature or service that, five years from now, people won’t think twice about spending $20 or $30 a month to get?

Autonomy is the best example. You might choose different packages, a subscription-based service for how the vehicle operates autonomously. That’s already the way it works at Tesla. Once you have autonomy, you’ve unlocked the ability to do other things in the vehicle. Today, there are features that are fully hands off, but you’ve got to keep your eyes on the road. I’m talking hands off, eyes off [in the future]. And if you need to drive again, you have plenty of notice. It’s a very gentle experience to take over, and if you don’t, there’s a very gentle response to pull over into a safe situation. It’ll be a much smoother transition between humans and autonomy than this idea of a big switch that gets flipped from one to the other.

Will car owners be able to remotely choose features a la carte?

Content absolutely will be a la carte. You’ll see certain types of connectivity and features that might involve a situation where, for example, a car is shared by five people. You could have a circle of friends who decide they’re going to buy a car together. There’s a little scheduling app that basically keeps track of who’s going to use the vehicle when, making sure that it’s charged in between. So it’s not just the software inside the vehicle, but it’s also the services that free people from the burden of car ownership while maintaining their connection with the product.

In that scenario, you could customize things for each owner?

Through software, yes. Successful tech companies build hardware carefully, with not a huge amount of variation, and then put the variation in those products through software. A lot of the [auto] industry has grown up with massive variation. With technology differences, you have a fundamentally differentiated product. You don’t have to chop your lineup into all these tiny little slices. You’re going to have fewer models.

So people will choose their vehicles for different reasons in the future?

You don’t show off your phone anymore. And your identity doesn’t feel threatened when somebody else has an iPhone 13. My differentiation is in things like my Twitter page or my Instagram. It’s a very different way that people create their identity, whereas in the past, a car was a big part of that. I think that will largely fade away. There will always be niche products that are really unique and fun to drive and heavily styled, like Ferraris and Lamborghinis. Horses didn’t go away when cars came along, but they became recreational. Sports cars will be recreational.

Can the car companies compete with Big Tech on digital services and user interface?

Where the auto manufacturers can do things that are really special are vehicle-specific. The companies that do this really well will have products that people will walk out of their homes and sit in for the experience, even if they’re not going anywhere. A company that does this right could theoretically take the wheels off and plop it in your backyard and it’s a product, like an Airstream. It becomes fundamentally the best place you could have a conference call or listen to music or watch a movie.

We talk a lot about Detroit versus Silicon Valley. Where is that battle headed?

This story is being written right now, and the outcome is not yet clear. Technology transitions allow a whole bunch of new people to come in. These people come in with a blank slate, they get to shed all the baggage. The path for a [traditional auto maker] is to figure out how to leverage history and shed baggage, and that is very, very hard. There’s a race on. Are [auto makers] going to learn tech and customer experience faster than the startups are going to learn high-volume, high-quality, low-cost production and a bunch of other things people take for granted in cars? It’s a race.

Interview has been condensed and edited.

SYDNEY—Australian consumer confidence fell in September amid concerns about job security as economic growth slows to a crawl.

The Westpac-Melbourne Institute Consumer Sentiment Index slipped 0.5% to 84.6 in September from 85.0 in August.

While cost-of-living pressures are becoming a little less intense and fears of further interest rate rises have eased, consumers are becoming more concerned about where the economy may be headed and what this could mean for jobs, said Westpac’s Head of Australian Macro-Forecasting, Matthew Hassan.

Consumers remain concerned about rising inflation, which is stoking concerns that interest rates may rise further, Hassan added.

The report comes a week after data showed the economy barely registered a pulse in the second quarter as consumer spending dropped sharply.

On-year GDP growth in the second quarter was the weakest since the early 1990s, excluding the pandemic years.

At the same time, the Reserve Bank of Australia continued to signal that interest rate cuts are unlikely in the near term, while adding that under certain circumstances a further hike in interest rates may be needed.

The RBA remains concerned about price growth, with core inflation remaining stubbornly elevated at nearly 4.0% on year in the second quarter.

Still, while consumers are downbeat, economists expect spending to regather momentum over coming quarters as income tax cuts delivered in July boost household budgets.