By Mike Ramsey
Widespread embrace of self-driving vehicles could eliminate 90%
of all auto accidents in the U.S., prevent up to $190 billion in
damages and health costs annually and save thousands of lives,
according to a new report by consulting firm McKinsey & Co.
The study, compiled after interviews with dozens of industry
officials, predicts mass adoption of auto-piloted vehicles
beginning in about 15 years and initial implementations early next
decade. Autonomous or semiautonomous vehicles are becoming a bigger
focus at auto companies such as Daimler AG's Mercedes-Benz and
technology giants, including Google Inc. and Uber Technologies Inc.
Their promise has become a central theme in an industry scrambling
to improve vehicle safety and revolutionize the core of an
automobile.
"Autonomous vehicles and the path toward them is one of the most
shaping trends in the auto industry today," said Hans-Werner Kaas,
a senior partner in McKinsey's automotive practice.
Installations of some of the most sophisticated active safety
gear on passenger cars built in the U.S. are modest but rising,
said automotive information website WardsAuto.com. In the 2014
model year, 1.4% of new vehicles had adaptive cruise control, up
from 1.1% in 2013; 8.4% had lane departure prevention technology,
compared with 3.4%; and 10.1% had blind-spot alert, compared with
6.3% the prior model year.
The industry-funded Insurance Institute for Highway Safety
estimates there is a 14% decline in claims in cars with automatic
braking and even when there is a crash, the damage is much lower.
Although it is widely believed that more widespread adoption of
these technologies will further enhance safety, McKinsey's view
that fully autonomous vehicles will begin to dominate roads by 2030
isn't a sure bet.
In 2000, for instance, many auto executives and research firms
predicted hydrogen fuel-cell powered vehicles would be a prevalent
form of transportation by 2020, but some car companies have backed
away from that technology. More recently, electric vehicles have
been held up as the future, but low gas prices and the high price
of technology have slowed their adoption.
Several auto executives, including Tesla Motors Inc.'s Elon
Musk, have forecast that a fully autonomous car will be ready in
five years. General Motors Co. and Renault SA are working on
autonomous cars and introducing features that put more control of a
vehicle in software.
In January, an Audi A7 sedan drove autonomously from near San
Francisco to Las Vegas, the longest such drive ever completed.
But the obstacles to full implementation across the millions of
miles of public roads in America or other markets are high.
Robotics professor Ryan Eustice, who is working on autonomous
vehicle technology at University of Michigan, said "the idea has
been a little bit oversold in terms of having the problems solved."
His lab is using videogame technology to lower the cost of the
equipment needed to guide vehicles. Michigan is one of the top
colleges studying autonomous driving.
Mr. Eustice, an advocate for the technology, said vehicles still
can't be relied on to perform correctly in dynamic driving
situations or in bad weather, off major routes or where maps may be
out of date.
The McKinsey study forecast that after full adoption of
autonomous cars, people could free up 50 minutes a day to do other
things. It also predicts that insurance companies will shift their
focus to technical failures and away from driver risk profiles over
time.
Steven Oakley, the chief actuarial officer of Pure Group of
Insurance Companies, a firm specializing in high-net worth clients,
said the benefits of automated driving are so high they cannot be
ignored. "It will become more about the car and the technology on
it than about the driver." He suggested that the concern about
liability with machine failure would be so small compared with the
benefit of safer driving that insurance companies might just assign
a "no fault" situation to vehicles with automated driving.
McKinsey suggests a massive shift in the automotive business
model, resulting from pay-for-use rather than ownership of vehicles
and it also forecasts that autonomous vehicles will advance
robotics development because of common components.
Write to Mike Ramsey at michael.ramsey@wsj.com
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