The chief executive of German automotive supplier Continental AG believes that autonomous vehicle projects will not produce significant revenues until 2030.
Continental is a well-known automotive industry supplier with a wide variety of products on offer including 48v starter-generation systems, head-up displays, computer chips for assisted and automated driving, connect vehicle systems and much more.
Like virtually every other major player in the automotive industry, Continental is also working on its own self-driving car hardware and software. But unlike many companies, it doesn’t believe this technology will produce significant revenue for another 10 years or more.
“Until 2030, the market will be driven mainly by assistance systems,” he said, referencing semiautonomous driving software and hardware. “Significant revenues (for self-driving car projects) will only come in 2030 and thereafter.”
General Motors seems keen on turning its autonomous car business, Cruise Automation, into a money maker much sooner than that. The company is hoping to launch a paying, driverless ride-hailing service later this year. Automakers and major Silicon Valley players alike are racing to launch such a service, with Uber and Lyft’s business models largely jeopardized by the cost of drivers.
Cruise Automation was valued at around $14.6 billion as of late last year, or a third of GM’s total valuation. The company’s value was boosted by major cash injections via Honda and Japan’s Softbank, however Cruise must reach certain performance targets in order to receive the capital from either company.
A Reuters report published late last year entitled ‘GM’s driverless car bet faces long road ahead‘ indicated that major projects within Cruise were behind schedule. One Softbank employee admitted to the publication that Cruise’s technology was “not commercially viable,” at the time, but CEO Kyle Vogt maintains the company is on track to launch the aforementioned ride-hailing service before the end of 2019.
The time has come for automakers and tech companies to begin delivering on the autonomous vehicle promises they have made in recent years, although with development moving at a slower than expected pace, some companies are beginning to worry.
One BMW board member, Klaus Froehlich, previously told Reuters that “everyone in the industry is becoming more and more nervous that they will waste billions of dollars,” on self-driving tech.
(source: Reuters)
Comments
Companies such as GM will have business cases in which AEVs are making profits within about 3 or 4 years. None of these business cases have been made public but my guess is that they will say something like the following ” By 2025, we will have built and be operating about 3 or 4 million AEV taxis in cities across the USA.”
I think the whole AV thing is an overblown fantasy. It looks good to Wall Street and when folks like Barra make promises that cannot be kept, but companies with competent execs like Toyota, VW and FCA realize that it is a crap shoot at best and a wait and see attitude is the best strategy.