General Motors officials made a bold announcement on a Thursday conference call with investors: the automaker plans to launch commercial autonomous fleet operations beginning in 2019.
The Detroit-based automaker’s vision for commercial, autonomous ride sharing will begin with self-driving Bolt EV robo-taxis operating in dense urban areas in multiple cities.
“If we continue on our current rate of change we will be ready to deploy this technology, in large scale, in the most complex environments, in 2019,” said GM President Dan Ammann on the conference call.
GM sees potential for better profit margins in autonomous fleet operations compared to the typically low-margin business of auto manufacturing.
Ammann predicted each self-driving car could generate “several hundred thousands of dollars” for the company, which stands in stark contrast to the $30,000 in lifetime revenue the company realizes now on average from each car sold, reports Reuters.
But he also cautioned safety would ultimately decide GM’s timeline on when to remove the driver from the car.
In response, industry analysts are showing caution to GM’s plan.
“Large automakers typically aren’t so bullish with their announcements,” says Jessica Caldwell, executive director of industry analysis at Edmunds. “GM likely recognizes the opportunity to establish leadership by committing to this very specific short-term goal. Autonomy presents a massive opportunity, but until this point the space has been somewhat riddled with hazy promises.”
After riding in one of GM’s self-driving Bolt EVs during a sneak peek this week, Caldwell stated, “The technology clearly has a ways to go, but given how rapidly it has developed to get to this point, a year holds a lot of promise for further advancement.”
However, GM stated last month it sees the horizon on autonomy, as it now plans deployment of vehicles in terms of “quarters, not years.”
The company also acquired Lidar company Strobe Inc in October, which should enhance GM’s sensor development and help bring costs down significantly.
GM isn’t without competition. Alphabet Inc’s Waymo unit has been working on autonomous solutions since 2009 and Uber last week announced it would purchase 24,000 autonomous vehicles from Volvo.
Of course, there’s also Tesla’s AutoPilot, which is currently operating in end-user vehicles.
Slightly behind its competitors, GM leveled the playing field though its purchase of Cruise Automation in early 2016 for an estimated $1 billion.
This is the first time General Motors has outlined such a broad plan publicly, but it still withheld key details such as branding for the autonomous ride-sharing fleet. Many speculate GM will leverage the Maven name used for its app-based car-sharing service.