E Dropping Prices Bodes Well For Waymo's Driverless Car Technology

The value proposition is compelling. Rather than buy a car that you have to actively drive, Alphabet (GOOG) spinoff Waymo's recent price break on self-driving car technology will allow you to buy a car that can drive itself for as little as $7500 to $10,000 more.  This is not a futuristic vision. Hybrid electric Fiat Chrysler (FCAU) Pacifica Minivans using Waymo's self-driving technology are scheduled to be on the streets later this month

The technology is still in the testing stage. Nonetheless, the potential is staggering should the cars be cleared for market.  

The technology should appeal and be available to middle-class families as the cost of this technology is quickly dropping. Waymo's announcement that it can now produce the technology in-house for roughly $7500 per car is a game changer as it reflects a 90% drop per car in the cost of this technology. The system has been tested over more than two million miles. The technology relies on short, medium and long-range LiDAR sensors that map a three-dimensional picture of the surrounding terrain and then guides the vehicle to react in tandem with its surroundings.  

Middle-class families with seniors who want additional assistance in actively operating a motor vehicle could soon have the opportunity to buy a car with an autopilot feature that provides the technological promise of being a second set of eyes for the older driver. 

Likewise, families with younger drivers who may lack the experience of driving on crowded streets in densely packed urban areas could soon have the reassurance that the car could drive itself if necessary through those crowded roads.

The business model carries less risk for Alphabet and Waymo than would if they build its own cars. Waymo does not produce its own automobiles. Rather it has an arrangement with other companies such as Fiat Chrysler to install its technology in their automobiles. This permits Alphabet and Waymo to benefit from Fiat Chrysler's reputation and brand equity while avoiding the capital investment needed to create a new car company and brand.  

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Joe Economy 3 years ago Member's comment

This is a truly a very exciting time in the auto industry. The tech is there thanks to Google and Tesla but is the world ready for the challenges? Road laws have to be rewritten to adapt to the new world of driverless car. One area of particular concern is the issue of liability. In the event of a driverless car crash, the question of who is responsible comes to the forefront. Is it the driver? The car-maker? The US is possibly the most litigious society on earth, and these issues remain major concerns for Google and the consumer.

Michele Grant 3 years ago Member's comment

While I know that #driverlesscars are safer than those driven by people, I just find it hard to give up control and entrust my life to a computer.

Gary Tanashian 3 years ago Contributor's comment

Maybe it's just me but I get a bad feeling about the disconnect between driver and car or driver and the road. Something fundamentally American would be given over to technology, as with so many other daily functions. To this day I still miss my '68 Mustang convertible.

Gary Anderson 3 years ago Contributor's comment

Also, if you live in Del Webb you may as well pay less for a golf cart.

Gary Anderson 3 years ago Contributor's comment

In California you have to have a steering wheel. That will be the trend. This thing will stop on yellow and some Las Vegas drivers will probably do to it what they do to under powered mopeds. I won't go into the details. It just would not fly in Vegas. I would not ride in one in Las Vegas.

Duke Peters 3 years ago Member's comment

I have to agree, I don't ever want to give up control of my car. There's nothing I enjoy more than a long ride on a nice empty road. No #DriverlessCars for me please. But I wonder if in the distant future, it will be illegal to drive your own car.

'68 Mustang? Sweet ride, what happened to it?

Gary Tanashian 3 years ago Contributor's comment

It just died of old age. It was already old when I got it. Then I had a '68 Fastback... it got rear ended and totaled. Very sad day.