How Much Do Driverless Cars Cost?
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Bad news: You can't buy a fully autonomous car yet. Such vehicles are only allowed on the roads for testing purposes right now. And chances are, you couldn't afford one yet anyway. Adding driverless technology to a car would have increased its cost by $70,000 to $100,000 in 2014.
But the good news is that you can now get your hands on a semi-autonmous Honda (NYSE: HMC)Civic for as little as $20,000 total.Honda's semi-autonomous Civic comes with advanced driver assistance systems (ADAS) that control the steering, lane changing, acceleration and braking while the car is cruising on the highway. Its self-driving features are similar to Tesla Motors' (NASDAQ: TSLA) semi-autonomous Autopilot feature, but at a much lower price.
The mid-priced Civic shows just how quickly these once-high-end technologies are making their way to the average consumer. Honda's ADAS package only adds an additional $1,800 to the cost of the vehicle. No, it can't take you from your garage to your job without you driving part of the way, but we're getting closer to that every day.
IHS Automotive predicts that 10% of new cars sold worldwide in 2035 will be fully driverless (as in, they won't need any human assistance) and that the technology will become ubiquitous sometime after 2050.
The additional cost for fully autonomous cars won't be all that much more than what including semi-autonomous features in cars adds to their cost right now. IHS estimates the the systems to make a vehicle fully self-driving will only add about $3,000 to its total cost by 2035.
Self-driving technolgy costs are falling quickly
Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google uses a complex system of LIDAR (like radar, but with lasers), cameras, censors, and GPS that allow for precise computer-controlled driving. The first LIDAR components used by Google cost about $75,000 per vehiclea few years ago.
That technology has helped Google's self-driving cars log more than 1.5 million miles of autonomous testing.But the company making the LIDAR, Velodyne, has created a smaller, but still very capable LIDAR system that now costs $500 -- and it sold its first batch of them to Ford (NYSE: F)earlier this year.
Ford already has a long list of semi-autonomous features in its cars, but the cheaper LIDAR is being used in its fully autonomous vehicle research right now. Ford has created the first full-scale simulated urban environment for self-driving cars, called Mcity, and the companyhopes the driverless tech it's testing today will be on the road in the next four to five years.
So as cheaper driverless car technology emerges, autonomous car prices will come down. But that doesn't mean everyone's going to run out to their local car dealership and snatch one up.
The shared mobility market
As driverless cars become more common, it's likely that many people will opt to rent them as a service, rather then purchase them outright.
Morgan Stanley's Katy Huberty believed theshared mobility market will be worth $2.6 trillion just 14 years from now. She also thinks that's the market that Appleis aiming toward with its rumored Project Titan car. By her calculations, the company could end up taking 16% of that market -- about $400 billion -- by 2030.
Tesla could be a big winner in this space as well. The electric automaker already has some of the most sophisticated semi-autonomous cars on the market, and its new master plan noted that it could launch its own ride-hailing service powered by Tesla vehicles, and allow individuals to rent them out as well. Other automakers are experimenting with similar services.
Based on all this, it would appear that consumers will be able to easily get their hands on driverless cars in the not too distant future, whether by buying one, renting one, or simply hailing one down Uber-style as needed. In any case, it's becoming clear that the cost of the technology is no longer the hurdle it once was -- and that should help spur high rates of driverless car adoption as soon as it hits the mass market.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Chris Neiger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, Ford, and Tesla Motors. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.