At least in the very early days, autonomous vehicles will involve a fairly substantial initial capital premium compared to non-autonomous alternatives. The economics of that type of investment, of course, are affected by the cost of capital and the NPV of future savings.
We’ve been in such a low-interest rate environment for so long, I wonder if rising interest rates would be significant enough to affect uptake of AV tech (if ever it gets good enough to be a practical solution in the first place). With rising costs of capital, the trade off between a super-expensive truck versus a stream of labor costs stretching into the far future gets a little less attractive - but enough to change things?
Albaby
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Economies of scale. It won’t be “super expensive truck” if they make a lot of them. Much of the R&D is already done. Tesla has a prototype already.
I think it would mostly be the infrastructure costs (e.g. more charging stations, staging areas by freeways to transition between freeway and city streets, etc). And with fuel prices rising, the pay-back for switching will be faster.
Mostly I just see technical problems, many of which may have been solved sufficiently to run the trucks on freeways (no stop lights, no pedestrians, no cross-traffic). The trucks won’t need to recognize a bicycle courier, for example. It just needs to not run into the other automobiles.
1poorguy
Economies of scale. It won’t be “super expensive truck” if they make a lot of them. Much of the R&D is already done. Tesla has a prototype already.
I think it will be super expensive. Actual electric trucks available for purchase today are two or three times more expensive than their diesel analogs:
https://www.autoweek.com/news/green-cars/a36506185/electric-…
…and that’s before you add in the cost to kit them out for autonomy.
“Economies of scale” aren’t a magic bullet, as we’ve seen with EV’s - battery costs have come down over the dozen years we’ve had production scale EV passenger cars, but not by enough to materially reduce the cost of EV sedans (Tesla’s $35K car never really materialized). At 7 million plug-in vehicles being sold per year (globally), we’ve already sort of reached scale production of EV batteries - whether for truck or car.
But even so - to get to ‘economies of scale,’ you have to get through the early stages of uptake. So if higher costs of capital (ie. interest rates) slow that part down, it can still delay the overall adoption. Right now, real interest rates are still very low (perhaps even negative) because of very high inflation - but if interest rates rise and inflation gets tamed, a positive interest rate environment might make some potential early adopters see less value in the experiment.
Albaby
Huh. Who’d a thunk this board would survive the Foolpocalypse.