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What's going on?
On the same day that Uber released its self-driving car to the public for the first time, Ford told investors that it wouldnt make as much money as expected next year because its going to spend a lot of dough developing electric and driverless cars. Well that just about sums up whats happening in the automobile industry right now!
What does this mean?
The driverless revolution seems to be coming at full speed. For existing auto companies, the big question is what impact that will have on the demand for cars. It could become cheaper and more convenient not to own a car if networks of driverless cars become the norm (tweet this) – that would likely significantly reduce the overall demand for cars. The power might reside with whoever owns the ride-sharing market: cue Uber.
Why should I care?
The bigger picture: Have we witnessed the peak of US auto sales?
Auto sales increased for six straight years through 2015, but theres a very good chance that sales will decline this year. Stock prices of big US carmakers like Ford and General Motors are down about 10% this year. Some of the forces that drove the sales growth remain: low interest rates (which make it cheaper for people to take out loans to buy cars) and the relatively low oil price. But if networks of driverless cars take off, it could be difficult for the US auto industry to regain its strength (the headwinds will likely be similar in other developed markets).
For you personally: This aint happening tomorrow.
Unless youre an Uber aficionado living in Pittsburgh, dont expect to be hopping into a driverless taxi anytime soon. The Pittsburgh launch is a just a very public way of testing autonomous driving. Were likely years away from this becoming normal, but its another step in what is increasingly looking like our new transportation reality.
Originally posted as part of the Finimize daily email.
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