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Volvo's CEO: Self-Driving Tech Will Be a $10,000 Option

By John Rosevear – Updated Sep 30, 2016 at 2:44PM

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Hakan Samuelsson's comments suggest that the automaker will employ a Level 4 system.

Volvo is already supplying vehicles to Uber's self-driving pilot program. It plans to offer a fully self-driving system to retail customers as an option starting in 2021. Image source: Volvo Cars.

We've heard a lot about the coming wave of self-driving cars. But how much will they cost?

We got a hint this week. Volvo's upcoming self-driving system, set to debut in 2021, will be offered as an optional feature costing around $10,000, the company's CEO said. 

What Volvo's CEO said about the upcoming self-driving system

Speaking at the Global Mobility Leadership Forum near Detroit this week, Volvo Cars CEO Hakan Samuelsson sad that Volvo's autonomous-driving system will initially be offered as an option on certain models. Those vehicles will still have steering wheels and other human-driver controls, and the driver will be able to switch the autonomous system on and off as desired. The system will add about $10,000 to the vehicle's cost, he said. 

Samuelsson said that Volvo's system will be a "full autopilot," one that works without the need for attention from the driver. "Not a supervised version, but really the one that you can sit back and watch a movie or whatever. That will make the premium car even more premium," Samuelsson said in remarks reported by Bloomberg

What Volvo's $10,000 system will be like

Samuelsson's remarks suggest that the Volvo system will be a Level 4 system, one that provides fully automated driving under certain conditions or in limited areas. Most Level 4 systems now in development rely on highly detailed 3D maps to help guide the cars. They only operate in areas that have been mapped. But when they're operating, there's no need for any intervention by the driver.  

(A system that can operate anywhere and under any conditions is designated Level 5 under the industry-standard guidelines developed by the Society of Automotive Engineers. Most experts believe that it will be at least a decade before a full Level 5 system comes to market.)

A Level 4 system will be  a significant step ahead of what's available now. The current generation of advanced driver-assist systems, such as Tesla Motors' (TSLA 0.08%) so-called Autopilot, require the driver to pay close attention to traffic and the car's surroundings even while the system is on, in case something happens that the system isn't equipped to handle. 

Some automakers feel that's a recipe for disaster. "[Human drivers] simply won't have the situational awareness" to take over quickly when required, Ford Motor Company's (F -1.56%) global product chief, Raj Nair, said in a presentation earlier this month

Nair said that Ford's engineers experimented with ways to ensure that the driver was paying attention, and found them unworkable. "If you try to introduce technology to make sure they have the situational awareness, like tracking eyes, for example, to make sure their eyes are on the road, then we found through our research that customers find that increasingly annoying," he said. 

The upshot: Safety-minded Volvo will be among the self-driving leaders

Volvo and giant auto supplier Autoliv (ALV -1.13%) said earlier this month that they would team up to produce the self-driving system that Volvo will begin offering in 2021. Under the deal, Autoliv will be able to offer it to other automakers as well. 

It's no surprise that Volvo is pushing to be among the first automakers offering an autonomous vehicle. Once perfected, self-driving technology is expected to make driving significantly safer. The old Swedish automaker may be owned by China's Geely Automotive Holdings (GELYY 2.70%) these days, but it still sees a focus on safety as key to its brand.  

The question is, how many customers will be willing to pay $10,000 extra for the system? I suspect that demand will be surprisingly brisk, but we'll have to wait until 2021 to find out for sure.

John Rosevear owns shares of Ford. The Motley Fool owns shares of and recommends Ford and Tesla Motors. The Motley Fool recommends Autoliv. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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