Self-driving cars are almost here — but only for 1 percenters

Rick Newman
Senior Columnist

Car geeks are buzzing about the prospect of cars driving themselves around — no human required — as early as this summer.

Tesla (TSLA) CEO Elon Musk announced recently that a software upgrade to the company’s Model S sedan will allow owners to “summon” the vehicle in self-driving mode from a garage or driveway, as long as it’s on private property. Delphi (DLPH), the huge automotive supplier, is about to launch a self-driving Audi SUV on a coast-to-coast test drive that will be the longest ever for an autonomous vehicle. And by next year, Cadillac will offer a “supercruise” feature allowing cars to steer, brake and accelerate themselves.

What nobody has said, however, is that self-driving cars will be the next big plaything for the rich, while the rest of us continue to lumber around in driver-dependent dumb cars. An automotive revolution may be at hand, but a people’s revolution it is not.

Beginning this year, it will drive itself. The Tesla Model S.



America’s wealth gap will spread to the highways for one simple reason: The technology required to produce self-driving cars is expensive. Much of the technology already exists, in fact, but it’s not even offered as an option on modest vehicles such as the Honda Civic or Chevy Cruze. The technology is available on most luxury cars, but even then it typically comes as a set of options that can easily boost the price by $10,000 or more.

The Ford (F) Fusion illustrates the dilemma. A typical buyer pays about $20,000 for the upscale family sedan, but you can splurge and get a bunch of options that form the starting point for a self-driving car. They include GPS, a blind-spot warning system, “adaptive” cruise control that uses sensors to speed up and slow down on its own, collision-warning sensors able to detect how close other cars are, and a “lane keeping” system that prevents the car from straying into trouble. You can’t get those options in the base-model Fusion, so when you upgrade to a midrange model and tack on all the options, the price jumps to about $31,000, not including any other add-ons you might want.

Early adopters

Making the car truly autonomous would require a lot more. There would need to be a high-speed Internet connection, which Ford doesn’t offer yet (although GM (GM) does, so Ford probably will soon). Laser scanners and millimeter-wave radar sensors would be needed to gather data on everything surrounding the car or possibly lying in its path. Then there would have to be tons of additional software for analyzing that data, operating all of the car’s control systems, and establishing protocols for unpredictable situations (a port-a-potty falls off the 18-wheeler in front of you, construction is blocking the adjacent lane and snowbanks line the shoulder).

Some of that software may not even be ready yet, such as three-dimensional digital maps that know the grade of every road you’re likely to travel on, as well as the two-dimensional coordinates. Beyond the technology, there will be new state and federal laws automakers will have to comply with before cars without human drivers become common on U.S. roads. 

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In theory, carmakers could roll out autonomous driving technology on affordable cars, but that’s not the way automotive breakthroughs find their way to market. Nearly all new technology debuts on the most expensive cars, since those buyers are the ones with money to pay for gizmos not necessary just to get from Point A to Point B. Power windows became popular this way, as did air bags, GPS systems and Bluetooth connectivity for smartphones. Offering expensive new features on cheap cars often pushes the price beyond what buyers can afford, so automakers don’t do it.

It's not unusual, of course, for first adopters of new technology to be wealthy. New technology is often expensive at first, then costs come down and more people are able to buy in. But self-driving cars may remain an elite gizmo longer than usual, simply because cars are so expensive to start with. The iPhone began as a status symbol and soon became an everyday item carried by millions--because it only costs $500 or so. With the typical purchase price of a new car already topping $30,000, the premium required to turn a dumb car into a smart one could easily push the price beyond $50,000. At the moment, the Model S is the benchmark for self-driving technology, and it starts at $70,000, which includes a starter version of self-driving capability.

Prohibitively expensive driverless chariots

Musk and other technologists point out that computers will probably pilot cars far more safely than humans, who are prone to distraction and make mistakes. What Musk & Co. haven’t addressed is the socioeconomic pressures that could emerge as the driverless chariots of the 1% clash with the inferior buggies of the proletariat. It seems inevitable that during the early days of the technology, wealthy driver-passengers will relax in self-driving cars — reading, working or even snoozing — while old-fashioned drivers in the next lane work the controls and curse at traffic. Will there be express “smart lanes” for driverless cars keeping perfect distance from each other, like widgets on a high-tech assembly line? When there are crashes between smart and dumb cars, will insurers and judges side with machine over man? Will the cost of insuring a human driver become prohibitively expensive? Nobody knows, but the dark side of self-driving cars could slow their adoption and even generate a backlash.

Tesla is pushing self-driving technology more aggressively than other automakers, possibly because, with just one model in its lineup, it needs new developments to keep the product seeming fresh. With a base price of about $70,000 — and options that can easily push the price over $100,000 — Tesla’s Model S is an apt candidate to be the first production-model self-driving car. Tesla also promises a cheaper future model around $35,000 and it would be a surprise if that model had the same self-driving capability (though it could, of course, be optional).

All the big automakers, meanwhile, are developing the same type of technology, with many rolling it out slowly in luxury divisions such as Mercedes, Lexus, Infiniti and Volvo. Google (GOOGL), of course, has an interest in the technology as well, though it may be more intent on developing automotive software than building actual cars.

With so much interest, it seems certain that self-driving cars will be here before long. It’s less clear whether you and I will be able to afford one.

Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman.