Wall Street analysts gathered Tuesday for an industry forum ahead of the New York auto show cast doubt on the near-term viability of self-driving cars and dismissed speculation that ride-sharing services and autonomous vehicles would hurt profitability of the U.S. auto industry.
“In a shared/autonomous world, we’re actually driving more, because there’s many trips where there is no passenger. That’s the whole point of sharing,” UBS Auto Analyst Colin Langan said during a panel discussion at the NADA/J.D. Power Automotive Forum.
He said shared cars will not last as long as privately owned vehicles do because they will be used more far more often. “I really think fully autonomous vehicles are decades away,” he added. “A fully autonomous car that does everything for you is very challenging.”
Langan said shared autos will reduce the number of cars that are on the road, but he said any decreased market share that auto companies experience can be made up by increased maintenance costs.
“Every one shared vehicle translates to about 11-17 vehicles taken off the road,” he said. “The automakers, if you’re smart, you’re looking for hedges to this.” But he added: “I think you see numbers out there like that and people get blown away, and then you realize there’s plenty of offsets.
“If you’re using a car less than 5 percent of the time, in the shared/autonomous world, that car is going to get sufficiently more used,” he said. “Therefore, we have cars today that are 11 or 12 years old. There’s no way they’re going to last nearly as long.”
Itay Michaeli, director of U.S. Autos and Auto Parts at Citi Investment Back, offered a more optimistic assessment of the near-term viability of self-driving cars.
“We think the era of fully autonomous cars begins gradually in 2020,” he said. “We think that the profit pool is very lucrative, double that of [the seasonally adjusted annual rate] in the U.S,” Michaeli added. “Ultimately the question we’re asking ourselves … is what’s going to happen to the ratio of cars per household in the U.S?”
The forecasts came after John Krafcik, CEO of Google’s Self-Driving Car Project, delivered an impassioned case for self-driving cars to the auto dealers gathered here Tuesday.
“We recognize to build a fully self-driving car is an ambitious goal, which people assumed was pure science fiction,” he said during a separate presentation on the “way ahead” for the U.S. auto and tech industries. “As it turns out, we have been working on autonomous vehicles at Google for over seven years.”
Read more of the original article at The Detroit News.
