Volkswagen says driverless vehicles have limited appeal and high cost

Fully autonomous vehicles will take at least another five years to perfect, with the cost and complexity of rolling out the technology globally serving to undermine the business case, Volkswagen`s head of commercial vehicles said. Autonomous cars require high-tech infrastructure, hugely expensive lidar and radar systems, as well as pricey deals with cloud computing and mapping providers, VW`s Thomas Sedran told Reuters on the sidelines of the Geneva motor show. 

"It will take another five years to develop the technology to achieve higher levels of autonomy. Can you see a business case which justifies these overheads for this period of time? It`s just too expensive," Sedran said.  Sedran is in charge of evaluating Volkswagen`s autonomous strategy in commercial vehicles, where last-mile delivery services could benefit from driverless vans.

The auto industry and technology companies such as Google and Uber have spent billions developing vehicles that do not need drivers, seeking to lower the cost of ride-hailing and delivery services. "The complexity of solving this problem is like a manned mission to Mars," Sedran said of the development of completely driverless vehicles, a level of technological sophistication known as Level 5 automation.

"Level 5 will never happen globally. You need latest-generation mobile infrastructure everywhere, as well as high-definition digital maps that are constantly updated. And you still need near-perfect road markings," he explained. "This will only be the case in very few cities. And even then, the technology will only work in ideal weather conditions. If there are large puddles on the road in heavy rain, that`s already a factor forcing a driver to intervene."

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Volkswagen and Ford are in talks about a potential collaboration in autonomous vehicles, but the two carmakers have so far failed to agree on whether or how much the German company will invest in Ford`s self-driving car operations, people familiar with the negotiations said. Last week BMW and Daimler pooled their resources on autonomous cars development in an effort to spread the cost. 

Because you need back-up drivers, this is an additional cost on top of the technology, where sensors, processors and software for so-called Level 3 cars already cost about 50,000 euros ($56,460), Sedran said. "We need the technology cost of the sensors to come down to around 6,000 to 7,000 euros," Sedran said. "This requires quantum leaps in innovation in lidar technology, for example."

Even if this were achieved, the cost of high-definition maps and cloud computing add hundreds of millions of euros in annual costs for fleets of robotaxis or delivery vans, Sedran added. "Who is going to keep up that kind of spending for five years without a clear business case," he said.