Auto industry has historic opportunity, AutoNation CEO says

DETROIT -- The auto industry is encountering a pivotal moment: It can slash pollution and traffic fatalities through production of electric and autonomous vehicles, said AutoNation Inc. CEO Mike Jackson.

But doing so won't be easy, he said.

The industry must shift to electric vehicles, Jackson, 68, told the Automotive News World Congress here. Jackson acknowledged that the shift comes with challenges, such as range, recharging and durability, but those issues will be addressed, he said. In 2030, he predicted, EVs will make up 15 to 20 percent of the market.

"In the auto industry, we are at that groundbreaking moment. It's there for the taking. Yes, there are inconvenient truths. Yes, there are challenges. Yes, there will be bumps in the road. Yes, there will be setbacks," he said.

"But I believe we are at an epic moment where we can fundamentally change," he said, the "amount of pollution and the amount of fatalities that are associated with our industry."

The costs of EVs are decreasing and with mandates from China's government and others, "there's no going back," Jackson said. Adding up recent comments from various automakers, he estimated, "we are talking $50 billion being poured into electric vehicles."

Automakers will take the profit they earn on booming truck sales in North America and invest it into r&d for electrification, he predicted.

"Enough progress and experience has occurred that the pitfalls of poor designs and poor technology have been figured out. How to make hybrids fun to drive" when they weren't before, he said, "has been figured out. I know there are hurdles but the mandate is there, the investment is coming," he said.

Features in Level 1, 2 and 3 autonomous vehicles, such as automatic braking and lane assist, have benefits, but the industry faces many significant hurdles to achieve Level 4 and 5 autonomous vehicles, in which no driver intervention is necessary, he said.

He compared getting to Levels 1-3 autonomous vehicles to a moonshot -- traveling a distance of less than a million miles. But getting to Level 4 or 5, he said, is "exponentially more difficult and more expensive," making it more like a trip to Mars.

When consumers eventually adopt Level 4 and 5 autonomous vehicles without a driver, those vehicles could drive 300,000 miles, Jackson said. They will need "a proactive maintenance program like you would with an airplane to make sure they are safe every day and can go 300,000 miles," he said.

The Fort Lauderdale dealership group, through its partnership with Waymo, is setting itself up to service those cars in the future, Jackson said.

The nation's largest new-vehicle retailer also has a diversified geographical footprint and franchise portfolio, plus a brand-extension strategy that Jackson says gives AutoNation an advantage over its competitors.

"I feel safe because I am differentiated," Jackson said. "And I have the ability to combine my unique scale and unique brand to extend into new fields of business that we have great opportunities in."