When self-driving cars are coming, for real
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Self-driving features have been creeping into automobiles for years, and Tesla (TSLA) even calls its autonomous system “full self-driving.” That’s hype, not reality: There’s still no car on the market that can drive itself under all conditions with no human input.
But researchers are getting close, and automotive supplier Mobileye just announced it’s deploying a fleet of self-driving prototypes in New York City, to test its technology against hostile drivers, unrepentant jaywalkers, double parkers, omnipresent construction and horse-drawn carriages. The company, a division of Intel (INTC), describes NYC as “one of the world’s most challenging driving environments” and says the data from the trial will push full self-driving capability closer to prime time.
In an interview, Mobileye CEO Amnon Shashua said fully autonomous cars could be in showrooms by the end of President Biden’s first term. “We have contracts underway with car makers for the 2024 or 2025 time frame,” Shashua told Yahoo Finance. “A level 4 vehicle can be purchased by a consumer at a very, very reasonable add-on cost.” Level 4 is the second-highest level of vehicle autonomy and it means a driver is never needed.
Systems on the market today, including Tesla’s Autopilot and General Motors’ Supercruise, are Level 2 autonomy, which means computers can control steering and speed but the driver needs to be ready to intervene if necessary. Tesla’s system has been controversial because of several fatal crashes that occurred with Autopilot engaged. Drivers may have mistakenly thought the system could avoid all hazards, which it’s not yet designed to do. The Transportation Department's safety agency is investigating at least 30 Tesla crashes involving 10 deaths.
Mobileye and Tesla on different paths
Mobileye supplied autonomous systems for Tesla in the past, but the two companies went different directions on the technology. “We are on diverging paths,” Shashua says. “There may be places in which we can collaborate again, but being a full stack supplier to Tesla, that is something that was in the past and is not going to occur again.”
Mobileye’s self-driving systems compete with those being developed by Alphabet’s (GOOG) Waymo division and other suppliers. Tesla is developing its own system. Most automakers, including General Motors (GM) and Ford (F), use proprietary in-house technology along with systems provided by suppliers such as Mobileye. Autonomous vehicles are complex and a handful of sophisticated firms will probably end up dominating the market, which is likely to be lucrative.
Shashua sees robotaxis arriving before self-driving cars consumers buy at dealerships. Mobileye, which was an Israeli company before Intel bought it for $15 billion in 2017, has permission to operate driverless taxis in Tel Aviv and Jerusalem, most likely by the end of 2022, and in Munich as well. Two programs in California could allow driverless rides for hire on a similar timeframe
Robotaxis will come first because companies like Uber or Lyft operating fleets of vehicles will be better able to absorb the cost than individual consumers. Robotaxis may also be easier to regulate, through rules governing their use inside a fixed geography such as a city’s boundaries. Driverless cars for consumers probably need the ability to go virtually anywhere, plus some regulatory guidance that isn’t yet fully developed. Level 4 autonomy could add $10,000 to $15,0000 to the cost of a vehicle, though that should come down as the technology scales up.
The United States isn’t necessarily ahead on autonomous vehicles. “I think China and Germany are in the lead position,” Shashua says. China has made self-driving technology one of its top industrial priorities, and Germany, home to Volkswagen, Mercedes-Benz and BMW, has legally sanctioned AVs in ways the United States has not. Maybe it’s easier to catch up if you don’t need a driver.
Rick Newman is the author of four books, including "Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. You can also send confidential tips, and click here to get Rick’s stories by email.
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