It's not crazy to think investors and drivers will witness more innovation and change in the automotive industry over the next two decades than what took place over the last century. Technology and smartphones are enabling businesses like Uber to thrive seemingly overnight. Young people moving back into an urban lifestyle are creating opportunities for companies to think differently about how people travel on a daily basis.
But perhaps the most intriguing storyline of all is the future of driverless cars. Here are three analysts with the reasons they believe driverless cars are here to stay.
There's a lot of money being spent on the development of self-driving technology. But here's another reason it's inevitable: Once perfected, it will be a tremendous safety innovation. There will be fewer and fewer good reasons not to use it.
Here's how Toyota (NYSE:TM) put it last year when discussing its driverless-car development program: "[Toyota's] aim is to contribute to realizing the ultimate goal of a society that values mobility, which is the elimination of traffic casualties, and to provide everyone, including seniors and the disabled, with the means to freedom of mobility."
If all of the cars on the highway are automated, and they're all in communication with one another and with key points of infrastructure (traffic signals, for instance), then collisions will be few and far between. The number of people killed and injured in car accidents will fall sharply. And, as Toyota noted, people who can't drive now will be able to get around safely once the cars can drive themselves.
That's the promise of self-driving technology. Implicit in that promise is the reason nearly all of the big automakers, along with tech companies like Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) and big auto-industry suppliers like Delphi are making huge investments in driverless-car systems: It's such a compelling vision that nobody wants to be left behind.
Several companies (not just Google) have had research and development efforts going on for years -- some for a decade a more. We've already seen some of the fruits of those efforts in systems that help keep you from wandering out of your lane on the highway, and that hit the brakes for you if you're about to bump into something. Those kinds of features use the same cameras and radar units self-driving prototypes are using.
To sum up: Self-driving cars are inevitable because so much money is being invested in the technology -- but what's driving those investments is a vision of much safer and more accessible cars.
Adding to John's point, to me, one reason driverless cars are here to stay is the same reason most businesses find success: They would solve problems. Consider that over 37,000 people die in road crashes in the U.S. each year, and 2.35 million more are injured or disabled. Even worse, many are young: 1,600 were under the age of 15, and nearly 8,000 people died in crashes where the driver was between the ages of 16 and 20.
While it pales in comparison to the loss of lives, road crashes cost the U.S. $230.6 billion per year and are the single greatest annual cause of death of a healthy U.S. citizen traveling abroad. Also, imagine the benefits of solving ever-increasing traffic congestion on busy city roads and highways? Imagine the benefits of a more computerized and efficient traveling system with driverless cars -- what could you do with an extra 10, 20, or even 40 minutes cut from driving time per day, put toward other ambitions?
Those are just the major problems driverless cars would solve. Consider that fewer drunk drivers would be on the road. Or that a thief would have to be pretty brave to steal a car when it can be tracked (presumably) on a network and potentially diverted straight to the police station.
Of course, there's a flip side, and we probably can't even imagine the unintended consequences of a society with driverless cars. But while these cars may be decades away from being a solution to the problems previously mentioned, they appear to be a leading viable solution, which is one reason the slow tick toward a world of driverless cars is set to continue.
Perhaps the most telltale sign that driverless cars are here to stay over the long haul is the amount of money being thrown around to further their development and acceptance.
The kingpin in the driverless car space is Alphabet's Google, which is in the process of testing a modified fleet of Lexus SUVs and prototype vehicles that are fully automated. Google claims to have more than 1 million self-driven miles cumulatively under its belt since beginning the process of modifying vehicles to self-driving platforms in 2009. Because Google is able to generate $20 billion or more in free cash flow annually, it's been able to funnel an untold (but presumably extensive) dollar amount to its driverless car program. In turn, Google's success has spurred investment from the federal government and various automakers.
In January, the Obama administration proposed spending a cumulative $4 billion over a 10-year period to finance research projects and infrastructure improvements for self-driving cars. According to U.S. Transportation Secretary Anthony Foxx, driverless cars have the potential to improve safety on the roads. He also believes as many as 25,000 traffic deaths could have been avoided in 2015 if driverless vehicles were in widespread use.
We're also seeing big-name automakers take the plunge. In November, Toyota announced it was investing a total of $1 billion over the next five years into artificial intelligence and robotics research. Although one of the goals many years down the road will be fully automated driving, the focus of the new company, Toyota Research Institute, will be to eliminate the time it takes to get new automated features, such as automated braking, into new cars and cars that are already on the road.
Likewise, General Motors (NYSE:GM) announced in January that it would be investing a half-billion into Lyft to help develop self-driving cars. This collaboration gives GM access to millennials who may not want to own a car, while also supplying Lyft with the much-needed know-how of creating an on-demand self-driving fleet.
Following the cash doesn't always work, but the combinations of these big investments sure looks like a telltale sign that driverless cars are a future certainty.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Daniel Miller owns shares of General Motors. John Rosevear owns shares of General Motors. Sean Williams has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A and C shares). The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. 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.