Gene Munster Convinces An Old Fogey About The Adoptability Of Autonomous Driving
Loup Ventures managing partner Gene Munster envisions a world where men walk among robots ━ or ride in them.
Munster has put all his chips on autonomous vehicles, a concept yet so foreign and not well understood that he can only assert, “crazy things could happen.” Things so crazy that some, including Benzinga PreMarket Prep co-host Joel Elconin, aren’t convinced they’ll ever actualize.
As Elconin notes, there are certainly some formidable hurdles, but nothing Munster doesn’t have an answer for.
The biggest challenge in Munster’s mind is legislation, particularly surrounding infrastructure spending.
“They’re going to have to make that jump to just reengineer not only the streets and the traffic patterns, things like that, but also just how our cities are built,” he said. “The need for parking lots diminishes, things like that, because of the efficiencies of the assets.”
Renovations will be expensive, but he expects Congress to enact supportive legislation by 2025 ━ after they concede the superior safety of self-driving cars.
Safety And Security?
They may need a little convincing. Some skeptics wonder whether machines can truly outperform human drivers, particularly considering their cyber vulnerabilities. To that point, Munster considers precedents in transportation.
“If you just look at what’s existing with planes, automobiles and trains, those are self-driving today, and we typically don’t have accidents,” he said, noting that hacks of existing autopilot systems are certainly possible but simply don’t happen.
Low Supply, Low Demand?
Even if consumers come around to the vehicles’ relative safety, the question remains whether they actually want and will pay to turn the wheel over to artificial intelligence.
But Munster doesn’t consider affordability an issue. Loup research finds existing vehicles capable of autonomy, although immediately more expensive than standard competitors, actually have a fairly comparable five-year cost of ownership when lower maintenance and fuel costs are factored in.
As for demand, he considers low production and economy of scale more troublesome, and even these problems seem surmountable.
“If you want to just be blown away, look at how the manufacturing of a Model 3 is versus how even some of the automated manufacturing from some of the Big 3 is,” he said of Tesla Inc (NASDAQ:TSLA). “The level of efficiency and robotics used in building a Model 3 really changes the equation around the pace that they can manufacture.”
Another concern is public resistance to the potential economic impact. Recent innovations threaten to eliminate longstanding services, products, jobs, skills, companies and industries.
But Munster thinks society may see value in the trade-off, which brings commuters increased safety, lower transportation costs and more time for productivity.
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