As reported by wired.com, BMW has built a shape-shifting car made out of a cloth skin. The car is built on a Z8 chassis, and reportedly runs and drives. There are no plans at this time to produce the car, and this example is destined for the BMW museum in Munich.

The technology is certainly intriguing, and it could have some practical performance characteristics if implemented correctly. Cars could be programmed to shift their shape at higher speeds to increase downforce or drag, depending on if you want to maximize top speed or grip. It could function like the myriad of motorized spoilers already gracing the likes of Porsches and other performance cars, but on a much larger, more effective scale.
Whether such a system will prove cost and weight effective shall remain to be seen by people far more mechanically and manufacturing oriented than myself. Then there will also be the hurdle of convincing people that a cloth car is still a safe car. Nonetheless, it is an intriguing idea, even if it is never widely implemented.
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