New York — Wall Street analysts gathered here 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.”
Krafcik says Google felt “pretty confident” putting its own employees in self-driving cars after about four years of research: “Turns out they really loved it.”
He said even early testers of self-driving autos displayed a willingness to take their eyes off the road when cars were in autonomous mode.
“We know that humans don’t pay attention 100 percent when they’re behind the wheel, even without automated driving aids,” he said.
Krafcik was a lot more bullish on the near-term potential for self-driving autos than either of the Wall Street analysts who spoke during Tuesday’s forum.
“It’s only a matter of time before the first self-driving cars are ready for the road,” he said, adding that it is critically important for the federal to set rules for the road now.
“Readiness isn’t just going to be determined by lines of code,” he said. “It’s going to be determined by policy makers and of course the public.”
U.S. automakers spoke Tuesday of the importance of getting ahead of the curve when it comes to both ride-sharing and self-driving autos.
Ford Executive vice President of Global Marketing, Sales and Service Stephen Odell said U.S. automakers cannot risk ceding the field to tech companies like Google.
“For a long time we’ve been hearing that the disruption only moves one way,” he said. “We actually believe it is better to disrupt yourself than to be disrupted.”
Odell said, Ford is taking chances because it is “better to be the hunter than the hunted.” He added that Ford “has the largest fleet [of self-driving car prototypes] on the road.
“Everybody has something to say about autonomous vehicles,” he said. “Everybody is going to be first.”
Google’s Krafcik said, “there’s a lot for the tech industry to learn from auto, but I think the same is true on the other side as well.”
But he said Google’s role in the automotive industry is still being determined.
“Airlines don’t build airplanes. Airbus and Boeing do that,” he said. “Who knows how this is going to work out in autos?”