Self-driving vehicles will be ready to roll next year, though the work to make them affordable to individual consumers is still ‘in the first inning,’ according to the CEO of a company working on the technology. Initial autonomous auto customers will be businesses deploying delivery vehicles and robot taxis, said Kevin Clark, the chief executive officer of Delphi Automotive Plc. Companies are motivated to eliminate the cost of drivers and better equipped to afford expensive self-driving tech than consumers.
“When you look at the commercial market – areas where you have a driver in a vehicle – there is financial incentive to use autonomous driving,” Clark, whose company will start trading under the name of Aptiv Plc on Tuesday, said in an interview Monday. “Those customers are willing to pay a much higher price.”
Delphi is splitting into two companies this week, with Aptiv focusing on connected and autonomous cars and Delphi Technologies Plc specializing in gasoline and electric powertrains. The spin-off seeks to capitalize on the changing dynamics of the auto sector, where suppliers with expertise in self-driving technology and electrification have become hot commodities within an industry preparing for upheaval.
General Motors Co, which has promised to add 20 all-electric vehicles by 2023, last week said it will put robot taxis on the road in 2019. Waymo, the autonomous car unit of Google parent Alphabet Inc, has surpassed 4 million miles in road tests and promises to soon offer its driverless vehicles to the public.
A market for individual buyers to purchase self-driving vehicles won’t start developing until after 2025, Clark said, as rising sales to commercial customers help to lower the costs of a key component called Lidar, a laser radar that bounces light off objects to assess shape and location. Today’s Lidar, which involves moving mechanical parts, helps drive up the cost of self-driving systems to $80,000 to $150,000. That price will fall to $5,000 by 2025, Clark said.
The consumer market will develop once Lidar is packaged in a solid state, without moving parts that wear out, he said. Prior to the spin-off that’s forming Aptiv, Delphi had been snapping up startups that would help it transform into a software company focused on autonomous vehicle systems. It agreed to pay $450 million in October to buy Boston-based self-driving startup NuTonomy Inc to speed up the introduction of a robotaxi test fleet in Singapore and add to its engineering headcount.
Aptiv is working on a self-driving system with Intel Corp and its Mobileye unit that’s slated to go on sale to carmakers in 2019. Earlier this year, Delphi also joined with BMW AG, Intel and Mobileye to form a consortium to create fully autonomous driving systems.