The automotive industry, including the disruptive tech giants, are investing tremendous amounts of funding and human capital into the development of autonomous vehicles and related technologies. Evidence of this is General Motors’ $500 million investment in Lyft and $1 billion into the upcoming acquisition of Cruise Automation Inc. It’s difficult to read about the automotive industry without encountering discussions around autonomous driving. The auto industry is hiring software developers at a pace once that was once limited to mechanical and industrial engineers.
Market Adoption … Eventually
So, why is the auto industry going down this path when a majority of the American consumers flat out do not want a driverless car or trust the concept yet? A recent J.D. Power survey found that just over half of Gen Z and Gen Y are interested — that’s surprisingly low, since these groups are more comfortable with public transportation and delay owning a car more than previous generations. And only about 41% of Gen Xers support self-driving technology, a rate that shrinks further for the baby boomers at 23%. It’s important to note here that the peak age for purchasing a new car is 43 years old.
The answer lies in the fact that the “R” in automotive R&D historically occurs 10 to 20 years before actually moving to production lines. This extended timeline frequently means the industry is working on things the consumer has not yet even taken into account. But as discussed in an earlier post, recent tech giant disruptions are shortening this product development cycle.