Time for automakers to tap the brakes on self-driving car technology

I've been hoping this summer that someone somewhere at an automaker or supplier would be brave enough to say that autonomous vehicles -- which still have no path to profitability and still have no clear customer base clamoring for them -- aren't going to happen anytime soon.I don't recall anyone saying it last week at the CAR Management Briefing Seminars in Traverse City, Mich. I haven't heard it recently on the record from auto company executives and suppliers, both of whom are heavily invested in trying to bring about self-driving vehicles, even if they harbor personal doubts. And some do.After interviews, when the tape recorder is off and there is time for off-the-record chitchat, several executives have expressed doubts on the technology, the timing, the readiness of the infrastructure or consumer willingness to pay for the technology as new-vehicle prices are soaring. Last month, according to Kelley Blue Book, the average new light vehicle in the U.S. sold for $35,359.But automakers and suppliers are in a tough spot.If Wall Street analysts perceive that a company is falling behind competitors, shares will get hammered. A year ago at the CAR conference, Magna CEO Don Walker, in unusually candid remarks for a senior executive, offered some insight into what industry executives say on the record and what they really think about self-driving vehicles.He said: "Quite frankly, auto companies can't tell publicly what they really believe. They know what's going to happen, but they have to say what is going to be popular to be perceived as a progressive company. ... We've got a lot of feedback from many of the car companies, and they actually believe this to be right."“A full autonomous vehicle is a long way off for lots of reasons," he added. But the big money being spent trying to make a vehicle drive itself with 100 percent safety 100 percent of the time is -- in my view -- starting to damage some car companies' ability to compete.Take Ford, for example. The F-series truck is Ford's perennial cash cow and the vehicle that pretty much pays all the big bills. If something happened -- an earthquake that disrupts supply, a huge spike in material costs -- and F-series margins disappeared, Ford would be in trouble fast. A fire in May at a supplier cost Ford eight days of production of the F series, a vehicle that is expected to bring in around $44 billion in revenue this year.Ford plans to invest $4 billion in self-driving vehicles by 2023. But nowhere in Ford's announcement of that big number can I find when it expects to make a profit from the technology.One lesson that never seems to resonate is that full-line automakers need a balanced portfolio of vehicles with an array of powertrains. And like a financial portfolio, some of those investments will make money and some won't. But to hedge your bets, you keep at least a few of the unprofitable ones around -- cars, for instance -- because things can change in a minute in the auto industry. Remember $4 a gallon gasoline a decade ago?I am not saying automakers shouldn't spend money on self-driving technology. But autonomous vehicles should be about 10th on their priority lists. We live in a fast-changing world of tightening emissions regulations, burgeoning tariffs, a market shifting rapidly away from traditional cars, financial analysts with too much influence and other pressing issues.There also needs to be more global collaboration among automakers, suppliers, regulators and everyone else with skin in the game to develop the key technologies to ensure that every vehicle on the road has the same basic building blocks. That would cut down on redundant engineering, improve safety, reduce costs, speed development and keep engineers where they are needed most: developing products that pay the bills today.Ultimately, the industry needs to lower expectations. There still are too many unknowns about the practical application of self-driving vehicles. We don't even have national legislation governing the use of these vehicles in the U.S.If we are going to be honest about self-driving cars, let's agree the best shot these vehicles have for even limited use in the next 15 years will be in geofenced areas, universities, hospital campuses, military bases and amusement park parking lots -- places where traffic is controlled, consistent and predicable.This is one race where finishing first just means you are going to lose more money faster.

Time for automakers to tap the brakes on self-driving car technology

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