What happened

Shares of Veoneer, Inc. (NYSE:VNE), a manufacturer of advanced driver assist systems (ADAS) and other sensors and products revolving around autonomous driving solutions, are plunging 15% as of 2:50 p.m. EDT after management dropped a few bombshells during the third-quarter conference call.

So what

Veoneer, which had seemingly positioned itself well for the driverless car revolution, is being pummeled after management noted it's unlikely to hit its $3 billion sales target for 2020 and also pushed its 2020 operating margin target back by one to two years -- not anything investors want to hear. Production delays, stricter regulations, and faltering demand were the driving forces behind management's gloomy guidance. Veoneer also forecast its full-year sales to fall 5% compared to the prior year, worse than its previous 3% decline guidance.

Man on a tablet device while in a driverless car.

Image source: Getty Images.

"Based on the attractiveness of our Active Safety portfolio and strong customer relationships, we see a potential upside to our $4 billion 2022 total sales target, particularly for the $2 billion Active Safety sales target. We are encouraged by the fact that Active Safety, the growth engine of the company continues to look very strong," said Jan Carlson, Veoneer's chairman, president, and CEO, in a press release.

Now what

This is definitely a disappointing development for early investors, especially those who bought in while the stock was trading at a steep premium to Morningstar.com's $24 fair value estimate. However, this was always going to be a stock for long-term investors. The driverless car future is certainly coming, and likely faster than we think, but this story will play out over decades. And there's no doubt companies well positioned with in-demand products for driverless vehicles will thrive as more driverless vehicles hit the road and as the number of sensors and other technology increases in each vehicle. Veoneer investors must be prepared to endure volatility.

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.