Vehicle Revolution News Reports & Industry Views on the Future of Cars • By Melba Kurman and Hod Lipson
Why the Rise of Self-Driving Vehicles Will Actually Increase Car Ownership
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t’s been a long time coming. For years Waymo (formerly known as Google Chauffeur) has been diligently develop- ing, driving, testing and refining its fleets of various models of self-driving cars. Now Waymo is going big. The company recently placed an order for several thou- sand new Chrysler Pacifica minivans and next year plans to launch driverless taxis in a number of U.S. cities.
This deal raises one of the biggest un- answered questions about autonomous vehicles: if fleets of driverless taxis make it cheap and easy for regular people to get around, what’s going to happen to car ownership?
One popular line of thought goes as fol- lows: as autonomous ride-hailing services become ubiquitous, people will no lon- ger need to buy their own cars. This no- tion has a certain logical appeal. It makes sense to assume that as driverless taxis become widely available, most of us will eagerly sell the family car and use on-de- mand taxis to get to work, run errands, or pick up the kids. After all, vehicle owner- ship is pricey and most cars spend the vast majority of their lives parked.
Even experts believe commercial avail- ability of autonomous vehicles will cause car sales to drop.
Market research firm KPMG estimates that by 2030, midsize car sales in the US will decline from today’s 5.4 million units sold each year to nearly half that num- ber, a measly 2.1 million units. Another market research firm, ReThinkX, offers an even more pessimistic estimate (or optimistic, depending on your opinion of cars), predicting that autonomous ve- hicles will reduce consumer demand for new vehicles by a whopping 70 percent. The reality is that the impending death of private vehicle sales is greatly exaggerated. Despite the fact that au- tonomous taxis will be a beneficial and
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widely-embraced form of urban trans- portation, we will witness the opposite. Most people will still prefer to own their own autonomous vehicle. In fact, the to- tal number of units of autonomous ve- hicles sold each year is going to increase rather than decrease.
The reality is that the impending death of private vehicle sales is greatly exaggerated.
When people predict the demise of car ownership, they are overlooking the real- ity that the new autonomous automotive industry is not going to be just a re-hash of today’s car industry with driverless ve- hicles. Instead, the automotive industry of the future will be selling what could be considered an entirely new product: a wide variety of intelligent, self-guiding transportation robots. When cars be- come a widely used type of transportation robot, they will be cheap, ubiquitous, and versatile.
Several unique characteristics of auton- omous vehicles will ensure that people will continue to buy their own cars. 1. COST: Thanks to simpler electric en- gines and lighter auto bodies, auton- omous vehicles will be cheaper to buy and maintain than today’s human-driven vehicles. Some estimates bring the price to $10K per vehicle, a stark contrast with today’s average of $30K per vehicle. 2. PERSONAL BELONGINGS: Consumers will be able to do much more in their driverless vehicles, including work, play, and rest. This means they will want to keep more personal items in their cars. 3. FREQUENT UPGRADES: The average (human-driven) car today is owned for 10 years. As driverless cars become soft- ware-driven devices, their price/perfor-
mance ratio will track to Moore’s law. Their rapid improvement will increase the appeal and frequency of new vehicle purchases. 4. INSTANT ACCESSIBILITY: In a dense urban setting, a driverless taxi is able to show up within minutes of being sum- moned. But not so in rural areas, where people live miles apart. For many, delay and “loss of control” over their own mo- bility will increase the appeal of owning their own vehicle. 5. DIVERSITY OF FORM AND FUNCTION: Autonomous vehicles will be available in a wide variety of sizes and shapes. Consumers will drive demand for cus- tom-made, purpose-built autonomous vehicles whose form is adapted for a par- ticular function. Let’s explore each of these characteris- tics in more detail.
Autonomous vehicles will cost less for several reasons. For one, they will be powered by electric engines, which are cheaper to construct and maintain than gasoline-powered engines. Removing human drivers will also save consumers money. Autonomous vehicles will be much less likely to have accidents, hence they can be built out of lightweight, low- er-cost materials and will be cheaper to insure. With the human interface no lon- ger needed, autonomous vehicles won’t be burdened by the manufacturing costs of a complex dashboard, steering wheel, and foot pedals.
While hop-on, hop-off autonomous taxi-based mobility services may be ideal for some of the urban population, several sizeable customer segments will still want to own their own cars.
These include people who live in sparsely-populated rural areas who can’t afford to wait extended periods of time for a taxi to appear. Families with chil- dren will prefer to own their own driv-
March-April 2018 • AUTOMOTIVE RECYCLING
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