Driverless Cars Could Roll out in 2018, Aptiv (APTV) CEO Says

Self-driving vehicles could hit the streets as early as 2018, but it will take some time before individual consumers could afford them, said Kevin Clark, CEO of rebranded driverless tech firm Aptiv Plc (NYSE:APTV). It could cost between $70,000 to $150,000 to purchase self-driving hardware and software, but Clark said that figure will slide to about $5,000 by 2025 due to higher volume and technology advancements. A major cost-cutting opportunity will come as vehiclemakers and driverless tech companies start to re-tool their platforms to make way for batteries, electric motors and self-driving sensors.

Commercial Market

Commercial firms, particularly those in the delivery and taxi businesses, will be the first autonomous vehicle consumers next year, the executive predicts. These companies are better suited to afford such technology compared to individuals and are eager to cut the costs associated with having drivers, Clark noted.

“When you look at the commercial market … there is financial incentive to use autonomous driving,” Clark said.

While Clark expects these driverless cars to roll out in 2018, General Motors Co. (NYSE:GM) recently said it was prepared to deploy robot taxis in 2019. Google’s Waymo, on the other hand, pledged to soon offer its own autonomous units to the public.

Self-Driving Focus

In a bid to focus more on electric architecture and autonomous driving, Aptiv, formerly known as Delphi Automotive Plc, spun off its powertrain segment this week. Aptiv will develop active safety systems, connected services, electrical architecture and software needed for driverless cars, while the spun-out entity Delphi Technologies will concentrate on future technologies. Before the split, Aptiv had been on an acquisition spree for driverless tech startup firms, including NuTonomy Inc., which it agreed to buy for $450 million to accelerate the development of a robo-taxi test fleet in Singapore. Aptiv and Intel Corp. (NASDAQ:INTL) are developing a driverless system that is expected to be rolled out to carmakers in 2019. It also joined a self-driving alliance between Intel, Mobileye NV and BMW earlier this year. Aptiv was issued an outperform rating by RBC Capital Markets analyst Joseph Spak with a $100 price target, while spun-out firm Delphi Technologies got a $60 price target.

By contrast, Morgan Stanley analyst Adam Jonas gave Aptiv an underweight rating with a $64 price target, while Delphi Technologies secured an overweight rating and a $57 price target.

Aptiv ended the latest trading session up 1.61 percent at $88.77 per share.