GM acquired Cruise last year in an effort to accelerate its development of self-driving technology.(Photo: Cruise Automation)
General Motors Co. has laid out a plan to not only mass-deploy self-driving cars on public roads in 2019, but to do it profitably something the automakers disruptor competitors in Silicon Valley are struggling to achieve.
With a driverless ride-hailing service as its framework, GM is counting on cost reductions, advancements in autonomous technologies and growth of the ride-hailing market to enable a successful self-driving car launch in 2019, GM president Dan Ammann said at an investor event in San Francisco on Thursday.
The automaker is using the all-electric Chevrolet Bolt as its autonomous mule, dovetailing Thursdays autonomous projection with GMs earlier vow to roll out a profitable electric vehicle platform by 2021.
For GM to get the benefit theyre looking for, they need these cars on the road at scale as soon as possible, said Navigant Research analyst Sam Abuelsamid. With ride-hailing services, consumers are saved from sticker shock of how much an EV costs and the cost of automation in early years is going to be expensive, too.
Abuelsamid said it makes business sense for mobility services like Uber and Lyft to shoulder the initial expenses of costly electric and autonomous vehicles. Thats because electric cars can rack up lots of mileage without much maintenance and self-driving vehicles mean they no longer have to pay drivers.
GM didnt say exactly where it plans to launch its driverless ride-hailing service, but identified dense urban environments in the presentation. The Detroit automakers testbeds for the self-driving Bolt are in Warren, San Francisco and Scottsdale, Arizona.
GM, which invested $500 million in Lyft in 2016, says it sees a clear path to reducing the cost-per-mile of ride-sharing services to under $1 by 2025. That is expected to drive consumer adoption, which is crucial to achieving profitability. It positions GM to compete with the likes of Alphabets Waymo, which will soon launch a completely driverless robo-taxi service in the greater Phoenix area using its autonomous Chrysler Pacifica minivans.
Waymo, which is Googles self-driving car spinoff, was the first to take the driver out of the seat on public roadways earlier this month. It was a vindication of sorts for Fiat Chrysler Automobiles NV CEO Sergio Marchionne, who placed his bets on Silicon Valleys ability to move faster on self-driving technology than traditional automakers.
Ford Motor Co. is targeting 2021 for the launch of its first fully autonomous vehicle, which would likely be rolled into a mobility service.
Large automakers typically arent so bullish with their announcements, so GM likely recognizes the opportunity to establish leadership by committing to this very specific short-term goal, Jessica Caldwell, automotive analyst for Edmunds, wrote in an emailed statement. Autonomy presents a massive opportunity, but until this point the space has been somewhat riddled with hazy promises.
GMs self-driving arm Cruise Automation is also finding ways to cut costs in the development phase. Cruises in-house development of lidar slashes the cost of these complex devices that pulse lasers to measure distances. GM says the cost of the next-generation lidar will be cut by about half to $10,000.
This is huge, Cruise CEO Kyle Vogt said. Weve basically taken some of the best technology in the market and accelerated its deployment.
GM acquired Cruise last year in an effort to accelerate its development of self-driving technology. The autonomous vehicle team at Cruise is growing by roughly 900 employees to 2,100 workers by early 2018.
The bullish stance on autonomy comes just three weeks after GM promised to introduce at least 20 new all-electric, zero-emission vehicles by 2023 including two new vehicles in the next 18 months.
General Motors executives clearly showed their sense of urgency to lead the autonomous vehicle market, Michelle Krebs, an analyst for AutoTrader, said in a statement. The question is: Can GM deliver, and does Wall Street believe it?
GM stock fell 72 cents to $43.09 at market close Thursday.
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