Automakers Seeking Profitable Autonomous Safety Features – Aptiv CEO

By Nick Carey | October 31, 2019

DETROIT — With fully self-driving cars many years from mass market adoption because of the high cost and complexity of the technology, auto supplier Aptiv Plc is seeing soaring demand from automakers for more basic semi-automated driving features, the company’s top executive said on Wednesday.

“We have contracts with seven (automakers) to provide them with those sorts of solutions that they’re launching across all of their vehicle platforms,” Aptiv Chief Executive Officer Kevin Clark told Reuters on Wednesday after the company reported third-quarter results and lowered its full-year earnings forecast due to a 40-day U.S. labor strike at General Motors Co . “That’s where we’re seeing the most demand.”

Because of the strike Aptiv now expects to earn between $4.62 and $4.68 per share, down from its previous forecast of $5.05 to $5.15 per share.

Fully self-driving vehicles require lidar-sensing technology.

But the tremendous cost of lidar — prices for individual sensors currently range from about $6,000 to more than $70,000 — is a major stumbling block to the mass rollout of self-driving vehicles, whether in commercial delivery and robotaxi fleets such as those being developed by Ford Motor Co and GM, or in passenger vehicles aimed at consumers.

In September Hyundai Motor Group announced it will invest $1.6 billion in a joint venture to develop self-driving vehicle technologies with Aptiv.

Clark said that joint venture will help it meet its latest target of 2022 to develop fully self-driving car technology, with orders from robotaxi firms expected to generate $500 million in revenue in 2025.

“You’ll first see adoption of automated driving systems for the robotaxi market,” he said. “There’s a financial incentive for them to pay more for the technology.”

Other industry executives and investors have predicted that fully automated driving systems could appear in delivery vehicles, from long-haul trucks and to mid-size vans, before their widespread use in robotaxis.

In the meantime, Clark said the cost for more basic semi-automated driver assistance packages, including automated emergency braking, lane keeping assist or parking assist, is somewhere between $700 to $1,000 per vehicle, which automakers can then sell to safety-conscious consumers for double that or more.

“It’s a very profitable option that helps them sell cars,” he said.

Aptiv shares were down 0.9% at $89.54 in early afternoon trading.

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