Forecasts for Driverless Transport Grow Rosier but Roadblocks Remain

There are potential roadblocks to the advent of driverless cars, such as software reliability and cybersecurity.
By Doron Levin ,

Prospects for the dawn of driverless cars and how their advent could affect transportation are growing more optimistic by the day, fueled by rosier forecasts and new product announcements. 

IHS Automotive said 20 million driverless cars will be on the road worldwide by 2030, with another 20 million a year added to the vehicle population by that time. The U.S. will lead the world with deployment with Japan a close second as that country gears up for the 2020 Olympics.

Nissan (NSANY) debuted its ProPilot system for assisted navigating, accelerating, steering and braking on its new Serena minivan that goes on sale in Japan in August.

"Our new forecast reflects a 43% compound annual growth rate between 2025 and 2035 -- a decade of substantial growth, as driverless and self-driving cars alike are more widely adopted in all key global automotive markets," said Egil Juliussen, IHS director of research.

As in most forecasts, the latest from IHS comes embedded with qualifiers. Software reliability and cybersecurity are potential roadblocks, as are regulations that could slow or inhibit global distribution. For example, the controversy surrounding a fatal accident in Florida in May, when a Tesla Motors (TSLA) - Get Report Model S sedan using its AutoPilot system slammed into a semi-trailer, has led to an investigation by the U.S. National Highway Traffic Safety Administration.

The driver killed in the Tesla crash may have been distracted. Other users of AutoPilot have been photographed on YouTube, performing other tasks and apparently sleeping.

Tesla executives defend the system as safe and said they have no plans to recall or disable it. A Tesla executive told the New York Times that Autopilot is safe. Consumers must realize that misusing Autopilot "could mean the difference between life and death." The executive agreed to the interview, which was authorized by Tesla, on condition of remaining unnamed.

Nissan's new system, similar to Tesla's and several others on the market, requires the driver to keep his hands on the wheel, permitting hands-off operation momentarily, after which an alarm sounds. Unless the driver's hands are returned to the wheel, the system disengages. Other carmakers, notably Daimler and Volkswagen (VLKAY) , have installed similar safeguards in their systems, which are especially useful for reducing driving stress during low-speed traffic jams.

Prior to the mass rollout of driverless cars, suppliers of sensors, software and related equipment should benefit from increased sales, as automakers equip new models with more and more assistance features. A study released June 30 by Alix Partners in Detroit estimated that sales of sensors and software related to autonomous driving will total between $20 billion and $25 billion within four years. Advanced sensing technologies such as Lidar -- using lasers -- are in their infancy, yet are expected to generate substantial sales.

The new sensing technologies require substantial software expertise, the field in which automakers are furthest behind potential competitors such as Alphabet's (GOOGL) - Get Report  Google driverless project. News of Google's project in 2009 sparked the auto industry's rush to driverless technology.

Doron Levin is the host of "In the Driver Seat," broadcast on SiriusXM Insight 121, Saturday at noon, encore Sunday at 9 a.m.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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