The self-driving car revolution is gaining speed--and will change our everyday lives in ways big and small.
In recent weeks, announcements from technology companies, governments, and carmakers have accelerated the inevitable transition to safer, more sustainable, and more efficient transportation systems. While this transition may take longer than industry leaders hope, its eventual impact on society is hard to overstate.
For starters, lives will be saved. The World Health Organization estimates that there were about 1.25 million traffic fatalities worldwide in 2013. Self-driving cars will eliminate human error and distraction, a major cause of those accidents. We'll also have more free time (albeit in a car). According to the U.S. Census, the average American commutes more than 26 minutes each way, or 500 days spent commuting per lifetime. In an autonomous car, we'll be able to use this time for work or leisure. Finally, consumers will save money as autonomous ride-sharing fleets reduce the cost of transportation.
So, when will we be able to enjoy the benefits of a self-driving car? Tesla CEO Elon Musk claims that we are two years away from "sleeping in our cars." Kyle Vogt, CEO of General Motors-owned Cruise Automation, announced this week that GM has built "the world's first mass-producible car designed to operate without a driver" based on the Chevrolet Bolt. However, even Vogt acknowledges that GM is waiting on improvements in self-driving software and legislation to make his vision a reality.
Today, 99.9% of all vehicles on the road do not have the technology to enable full autonomy. Self-driving cars won't hit our roads in a noticeable way until 2020. But by 2040, we estimate that 95% of new vehicles sold, or 96.3 million cars, will be fully autonomous--a $3.6 trillion opportunity.
Big opportunities draw big competition. Tech companies that pride themselves on expertly integrating hardware and software (the basic ingredients of a self-driving car), namely Google, Tesla, and Apple, are looking to beat traditional carmakers at their own game. And they appear to be winning--both Google and Tesla have driven millions of miles autonomously.
Some traditional carmakers can and will transition successfully to the autonomous future, but these tech companies, with deep expertise in computer vision and artificial intelligence, are meaningfully ahead. Automakers will compete on brand recognition and manufacturing capability; however, in order to implement core self-driving technology, they will need to buy and integrate the technology, as GM has done with Cruise.
Aside from the automotive industry itself, the self-driving vehicle revolution will upend many multi-billion dollar industries: trucking and delivery, auto insurance providers, energy companies, auto parts suppliers, dealerships, parking lots, and ride-sharing services.
Companies in those sectors have more to lose than to gain from autonomy, but society is the big winner. We'll benefit from fewer traffic accidents, a reduced reliance on fossil fuels, more affordable transportation options, and more free time.
A final thought for those of us who love to drive and dread the thought of an autonomous car: You'll have your chance to drive, but it will become a hobby, like horseback riding. And you'll have plenty of time to prepare for your drive on the way to the track--in your self-driving car.
Gene Munster is a managing partner at Loup Ventures. You can follow Loup Ventures on Twitter @LoupVentures.