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| Curcio Law

It always comes down to money. How much will self driving cars cost? Will they cost taxpayers infrastructure costs? Will they boost revenue in the automobile industry? There are many working theories out there on just how much autonomous vehicles will cost the public. I’ve outlined the more popular and interesting theories below.

Consumers: Self driving technology isn’t cheap, it’s not like Lasik for your car. Between the Lidar lasers, camera’s, and other technology (see previous post for a breakdown of the technology), the cost of a brand new car could increase by $100,000. Current estimates by carmakers and industry professionals pin cost increase at $10,000, but these are aspirational costs according to Oliver Cameron, who runs the self-driving car team at Udacity, the Silicon Valley technology training startup founded by Sebastian Thrun, lead developer of Google’s pioneering self-driving car.

To create a self driving car you would need to install a LIDAR unit on top of the car for a complete, 360-degree field of view for about $85,000. Next, among other costs, there would likely be four smaller LIDAR devices elsewhere on the car. At $8,000 each, they add $32,000 more. Radar is another $10,000, plus a few cameras, for $6,000. For times when GPS is blocked, you’ll need an inertial measurement unit, which is $4,000. Then there is a PC, a hard drive, a graphics card and other hardware, adding another $5,000 or so. 


Granted, this is based on current technology, which is always changing and improving. These costs could come down exponentially over the next 20 years. Furthermore, once self-driving cars hit the market, the more people buy into them, the less they will cost. On the flip side, with the creation of self driving cars comes the idea giving up car ownership. Instead of consumers taking the brunt of these costs, ride sharing companies like Uber and Lyft might take the lead by sending out fleets of autonomous cars, saving consumers tons of money on car payments, gas, insurance, etc.

Taxpayers: Repairing infrastructure is already a burden on taxpayers, costing us nearly $100 billion a year. With the advent of self driving cars, roads in America will need to be taken care of, and paved more frequently. On top of that, if smart infrastructure is deemed necessary, even more money will be needed to install that portion of the equation. We currently do not have any estimates on just how much smart infrastructure could cost, but given how much the cars are, it won’t be cheap. A solution to this may be privately funded, smart/self driving toll roads. However, given the lackluster response to hot lanes and toll roads in general, is the private sector willing to take that risk to create these roads? Will consumers pay extra money to not drive on these roads?

State Governments: It’s funny to think about, but state and local government’s revenue will take a nosedive when these cars hit the road. If the roads are full of wonderful little cars that do not speed, do not run red lights, do not double park, and follow all road signs, local governments will lose a lot of revenue from traffic and parking fines. To put this in perspective, D.C. alone made $148 million in revenue from traffic tickets in 2016. Furthermore, if car ownership decreases that will reduce automobile sales taxes and luxury taxes. Revenue from any gas taxes will also decrease, especially considering many of the autonomous cars are electric based and are moving in alternative fueling directions. On a positive note, the lessening of vehicle crashes will save government and taxpayers billions of dollars a year, as well as lives. In general though, local governments will not take this loss of funding well, so other taxes may increase with the onset of self driving cars.

The future of self driving cars is positive but a lengthy one. Once available, they will save lives. Their impact on our wallets is another matter entirely. It is still too early to truly understand what these cars will cost, but I would rather pay more for technology that works than less for less reliable technology. And who knows, maybe in 20-50 years no one will own cars but instead will pay yearly subscriptions to Uber or Lyft, making this discussion, obsolete.

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