White Paper: Who’s really going to drive the market for self-driving cars?

The first completely self-driving cars will hit the market by 2020. By 2035, half of all new cars will have autonomous capability.

Google’s cute driverless cars will soon venture off Google’s campus and onto the roads around Cupertino. Although they’ll be limited to about 25 miles an hour, they’ll be the first completely driverless cars to mix it up with regular traffic. Google has said it will commercialize the car as soon as 2017.

Google’s cute driverless cars will soon venture off Google’s campus and onto the roads around Cupertino. Although they’ll be limited to about 25 miles an hour, they’ll be the first completely driverless cars to mix it up with regular traffic. Google has said it will commercialize the car as soon as 2017.

Carlos Ghosn, Chairman of Renault and Nissan, promises that the first Nissan capable of completely autonomous driving will be on the market by 2020. Sergio Marchionne, the CEO Fiat Chrysler, recently traveled to Silicon Valley for private meetings at both Apple and Google.

The Institute of Electrical and Electronics Engineers surveyed 200 engineers working on projects related to autonomous vehicles, asking them when they expected most new cars to be autonomous. Answer: 2035.

They say, “Follow the money.” But a more accurate expression in the tech world would be, “Money leads the way.” Money drives R&D, and research drives new products. In the last year or so, both Morgan Stanley and Goldman Sachs have issued reports green-lighting investment in autonomous vehicle technology.

A decade ago, such enthusiasm would’ve been risible. It’s possible that one reason the market accepts the idea today is that by now, many of us have experienced cars capable of parking themselves, staying in their own lane, and braking to avoid an imminent collision. And, shades of Anastasia Steele, where the thought of giving up control used to freak us out, we’ve learned to relax and enjoy this kind of active driver assistance.

The reality of the situation is that as a culture, America has already passed ‘peak auto’.

Young people are less inclined to want their own cars. Although public transportation remains pathetic in most U.S. cities, Millennials and younger cohorts are turning to other options, from car-sharing to Uber. An increasing percentage of them aren’t even  bothering to get driver’s licenses. (In the early ‘80s, almost 90% of 19 year-olds had a driver’s license. Now, less than 70% do.) The auto industry realizes that removing knowing-how-to-drive as a barrier to entry may be critical to its future survival.

So far, most of the discussion about autonomous vehicles focus on benefits like freeing drivers to do other things while commuting, and reducing accidents and congestion. 

I could write an entire post about the schadenfreude driving the media's sudden obsession with "Elder Orphans". But sensationalism aside, Boomers had smaller families, and their own kids have grown up in an era of increased geographic mobility. That does leave many Boomers in suburban settings where they can't rely on family or public transit to help them get around. That's why so many aging drivers cling to their driving privileges. Self-driving cars will hit the market just at the right time for aging Baby Boomers, who are loathe to give up their independence—or, in the case of Elder Orphans, who have no choice but to remain independent.

I could write an entire post about the schadenfreude driving the media's sudden obsession with "Elder Orphans". But sensationalism aside, Boomers had smaller families, and their own kids have grown up in an era of increased geographic mobility. That does leave many Boomers in suburban settings where they can't rely on family or public transit to help them get around. That's why so many aging drivers cling to their driving privileges. Self-driving cars will hit the market just at the right time for aging Baby Boomers, who are loathe to give up their independence—or, in the case of Elder Orphans, who have no choice but to remain independent.

No one is talking about the real reason autonomous cars are destined to succeed: In 2020, when the first self-driving cars reach the market, leading-edge Baby Boomers will be about 75. In 2035, when most new cars will be capable of driving themselves, the oldest Boomers will be hitting 90; even the youngest will be in their 70s. 

And, in sharp contrast to today’s 20-somethings, Boomers love their cars. They grew up at a time when getting a driver’s license and a first car were rights of passage. They associate their cars with freedom and self-reliance. It’s hardly an exaggeration to say that, for most Boomers, their car is an essential part of their self-identity. 

The AAA surveyed more than 500 older drivers a few years ago. 80% basically admitted to their own diminished driving capacity when they reported that they avoid driving in certain conditions. (For example, they said they no longer drove at night, or in bad weather, or during rush hour.) More than half of those surveyed said that losing their ability to drive would pose a “somewhat serious” or “very serious” problem.

Boomers hate to see themselves as “old”. They’re the ones, after all, who keep repeating, “60’s the new forty” and “Seventy’s the new 50”. But failing eyesight and slowed reaction times can only be denied for so long. And that’s why Boomers will embrace self-driving cars.

Baby Boomers already buy more new cars than any other age group. 

Baby Boomers already buy more new cars than any other age group. 

For younger consumers, self-driving cars will represent convenience, and that's fine. For older consumers, self-driving cars will represent freedom itself, which is a far more powerful motivator. That's why Baby Boomers will be the most enthusiastic early adopters of autonomous vehicles.