General Motors Company (NYSE: GM) said earlier this year that it plans to have its first fleet of fully autonomous taxis on U.S. roads by the end of 2019. However, the recent death of a pedestrian involved in an accident with an Uber AV suggests GM’s driverless fleet timetable may be a bit too aggressive.
In January, General Motors petitioned the National Highway Traffic Safety Administration for permission to operate a fleet of AVs with no steering wheels or gas pedals on U.S. roads starting in 2019. While travelers and investors are excited about the prospects of driverless taxis, this week’s Uber tragedy demonstrates the critical role of testing and regulation in the AV era.
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Up to this point, a handful of companies have already been testing fully autonomous vehicles on public roads, but these vehicles have had test drivers sitting behind the wheel as safeguards. General Motors logged 131,676 driverless test miles on public roads in the state of Califonia in 2017, up from less than 10,000 miles in 2016. Unfortunately, those miles were far from perfect and included 105 incidents where the human driver took manual control of the vehicle and a total of 22 reported accidents.
In light of the Uber death, Loup Ventures analyst Gene Munster says AV timelines at GM and other leading auto companies are simply not realistic.
“It is unlikely we see something like a fully operational autonomous fleet shuttling folks around in the next five years,” Munster says.
The Uber accident doesn’t change Munster’s bullish long-term thesis on AV technology, but he says investors may be waiting a bit longer than anticipated. “We believe that autonomous drivers will be many times safer than human ones but will take longer than most people think to develop,” he says.
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However, Morningstar analyst David Whiston says GM investors won’t need to wait until 2023 to see AV technology impact the company’s bottom line.
“We now model $22.2 billion of autonomous ride hailing revenue through 2022,” Whiston says. “GM is well-positioned to compete in these new spaces via its own autonomous vehicle work, its Maven subsidiary, which does car-sharing and could move into autonomous ride-hailing, OnStar, and its approximate 9 percent ownership of Lyft.”
Morningstar has an “undervalued” rating and $56 fair value estimate for GM stock.
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Analysts Skeptical of General Motors Company (GM) AV Targets originally appeared on usnews.com
