Reuters reporter Paul Lienert scored one of the first post-splinoff interviews with Kevin Clark, the CEO of Aptiv. Aptiv is a spinoff from Delphi, one of the world’s foremost Tier 1 automotive suppliers. The existing Delphi Technologies will retain the core business of automotive supply, whereas Aptiv will focus on autonomous technology.
In this vein, Delphi’s recent acquisition of nuTonomy will live within the Aptiv spinoff.
The split will hopefully resolve some potential tension for Delphi, as its new autonomous business seemed to be increasingly moving toward competition with the customers of its core automotive supply business. By splitting the companies, the legacy Delphi Technologies business may retain its credibility as a supplier, without carrying a side division engaged in competition with key customers.
One of the key insights to come out of the Reuters interview is Kevin Clark’s statement that autonomous technology will drop by orders of magnitude over the next 7 or so years.
While current estimates for the cost of a self-driving hardware and software package range from $70,000 to $150,000, “the cost of that autonomous driving stack by 2025 will come down to about $5,000 because of technology developments and (higher) volume,” Clark said in an interview.
Delphi is one of the leaders in the development of automotive techology, all the more so with their acquisition of nuTonomy. And their history as a Tier 1 supplier gives them greater insight than most other companies into how costs and production will scale.
So this seems like a prediction to take seriously. And if it comes to pass, that will be a game-changer. At $5000 marginal cost, consumers really could own their own self-driving vehicles, without relying on ride-sharing companies.
Of course, there are a host of reasons why consumers still might not want to own cars in the future — the costs of mapping, geofences, cratering costs of shared transportation. But $5000 autonomy would make plausible a lot of scenarios that thus far have seemed unlikely.
David Silver 