Google's Self-Driving Cars May Cost More Than A Ferrari

Photo: Google

Google has made stunning progress on the self-driving car project it launched two years ago.Last month, it announced that its fleet of cars—a dozen or so on the road at any time—had logged 300,000 miles.

It’s even started ferrying Googlers to work in the cars to test them in real-world conditions. (An employee must still sit in the driver’s seat and be ready to take control of the car.)

And California’s Senate just approved a bill to legalise self-driving cars in Google’s home state.

But despite that progress, a true self-driving car is far from hitting the market.

That’s because, according to a well-informed startup founder working on similar technology, the massive array of sensors Google has to install in its cars alone costs $250,000 or more.

Add that to the $45,000 retail price of the Lexus RX450h cars it’s modifying, add in some other custom components, and you get a car that costs more than $300,000.

It makes the Tesla Model S look like an affordable luxury.

Google will not disclose the cost of its self-driving car project, or any of its other far-out research and development efforts, a spokesperson told us. It has always characterised self-driving cars as a small side bet.

And it’s true: Even if Google is spending millions of dollars—at least $3.6 million just on its current fleet of cars, never mind the engineering salaries—that’s a drop in the bucket compared to its overall revenues.

But if Google intends to take this technology to the mainstream, as seems to be its ambition, it must reduce the cost of its sensors.

Here’s how it likely can do so:

  • Leverage Motorola Mobility’s engineering experience. Google just added a lot of hardware experience with its acquisition of Motorola—remember, that company got its start making car radios.
  • Use cheaper sensors. The startup founder we spoke to said that once Google got its data-processing algorithms right, it could rely on less-sensitive sensors and use sheer computing power to make up for their lower accuracy.
  • Get subsidies from insurance companies. Anthony Levandowski, Google’s business lead for the car project, said earlier this year at an automotive-engineering conference that the company is talking to insurers about whether self-driving cars could get lower rates.

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