Will Self-Driving Cars Make a Dent In The Auto Industry?

What was your first reaction when you heard that self-driving cars were being tested?

Perhaps, you thought about the 1962 television show “The Jetsons,” which envisioned that people would travel via flying cars in 2062. Perhaps, you thought ‘that will never happen.’ You might have even laughed and joked that a car driven by your father or mother or child would no longer be the most dangerous car on the road if a self-driving car was also on the road.

If you first heard about the prospect of self-driving cars 30, 20, 10, or even five years ago, your skepticism would have been justified. Self-driving cars existed in the 1980s, but until the last few years it seemed improbable that they would ever be a regular presence on public roads and would, in fact, be far safer than cars driven by even the best drivers.

In recent weeks, though, the fantasy of self-driving cars being bought by ordinary Americans and used for daily travel has taken a huge leap toward becoming a reality. On June 20, legislation about the regulation of self-driving cars was introduced in the U.S. Congress for the first time ever. Companies that are working on self-driving cars favor the 14 bills that were introduced because they believe their products can only succeed if they are governed by one federal standard, rather than laws by states that have taken different approaches to the issue.

“What we’re seeing right now is that autonomous vehicles are moving from their infancy into their adolescence,” transportation policy analyst Greg Rogers told the technology website The Verge in an article entitled “Self-driving cars just had one of their best months yet.”

An article on the Business Insider website entitled “10 million self-driving cars will be on the road by 2020” defines a self-driving car as “any car with features that allow it to accelerate, brake, and steer a car’s course with limited or no driver interaction.”

A few years ago, lawmakers had no interest in allowing these kinds of cars on public roads, but the proposed 14 laws have bipartisan support. They include allowing companies to test and eventually sell cars that don’t have brake pedals and steering wheels.

Currently, California is the leader in permitting self-driving cars on the road with 180 cars being tested in the state. That number is “probably more than the rest of the US combined,” reports The Guardian newspaper in “The road ahead: self-driving cars on the brink of a revolution in California” and seven to eight times more than were being tested in 2014, according to a chart in this article.

Google is testing 77 of the 180 cars, General Motors 27, and Tesla 24. Altogether, 27 companies are testing self-driving cars in California. Only seven were in early, 2015.

The companies that have produced prototype self-driving cars worldwide include Audi, Ford, Honda, Hyundai, Mercedes-Benz, Nissan, Peugeot, Renault, Toyota, and Volvo, reports Wikipedia.

The increase in the number of companies working on self-driving cars is a reflection of the technological advances in the growing industry.

The Society of Automotive Engineers defines six levels of autonomous driving. Level 0 is the lowest; Level 5 the highest. The self-driving cars on roads are at Level 2, which is modest self-driving and includes steering and changing lanes. The article reports that automakers are skipping Level 3 and going to “almost completely autonomous” Level 4. The only thing that Level 5 cars can do that Level 4 cars can’t is “navigate unmapped areas, or venture into storms that block machine vision.”

While Level 2 cars automatically avoid rear-end collisions with cars and pedestrians thanks to technology that detects objects near the cars, drivers are needed. The Level 4 cars companies are working on don’t require drivers at all. General Motors and Tesla say their Level 4 cars will be ready by 2018, and several companies promise Level 4 or Level 5 cars by 2020.

At this point, you might still be skeptical that self-driving cars are safe. You shouldn’t be, according to auto safety experts. The Guardian reports that 1.2 million people worldwide die in auto accidents and 94 percent of the deaths are caused by human error.

“The technology itself will perform a lot better than we perform now as humans,” California Department of Motor Vehicles deputy director Bernard Soriano told The Guardian. “We needed to provide a clear path to completely driverless vehicles, because of the safety benefits.”

The Business Insider says the safety benefits of self-driving cars are their biggest benefits and one of the reasons that its in-depth report analyzing the cars’ market projects there will be 10 million such cars on the road worldwide by 2020. Forbes magazine columnist Olivier Garret makes the same prediction in an almost identically titled article.

Currently, there are about 1.4 billion cars on roads worldwide. There will be far more in 2030, and Garret projects that about 25 percent of them will be self-driving cars, an estimate that he calls too conservative because the “technology adoption cycle” has shrunk in recent years. It took only five years, he notes, for 60 percent of American households to own smartphones.

Garret wrote that self-driving cars will be so safe that the automobile repair and auto insurance industries will be harmed dramatically while hospitals and emergency services will be far less stressed. He also projects that people will become more apt to pay for rides than own cars.

In short, self-driving cars will make a huge dent in the automobile industry and many other industries as well. They will make an extremely large amount of money for car companies in what will be a $26 billion industry by 2025, but their impact on people’s lives could be even more enormous.

Regards,

Ethan Warrick
Editor
Wealth Authority


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