Auto financing is here to stay when autonomous vehicles arrive on the road, but private ownership may be mixed in with fleet operators like rideshares or OEMs, according to panelists at a Reuters Newsmakers event yesterday, titled Self-driving cars: the Future of Autonomous Vehicles.
The experts were asked by Mobility Finance what the model of ownership will look like, especially considering self-driving cars are likely to be expensive at first.
“OEMs could own [autonomous vehicles], and OEMs [already] finance cars now,” Stephen Girsky, managing partner of VectoIQ said, adding that in the future they could be owned and financed by banks, finance companies, or a leasing company and that rideshare companies are currently in an “asset-light” business, so a desire to directly own a fleet of vehicles or to finance vehicles themselves would be a change in their business models.
“But if it’s an asset, it needs financing — if there’s a business case around it, I think people will show up. I mean there’s people, who finance [through] Uber,” he said.
The cost of financing these vehicles will also be high initially, as companies explore different lending models. “It’s an asset that’s going to need a lot of finance and it’s going to need to be utilized and the cost of the financing is really — people are going to guess how often it’s utilized, what’s the ability to pay and things like that,” Girsky said.
The cost of autonomous vehicles (and associated financing) initially being high, but declining over time, was a sentiment echoed by Padmasree Warrior, chief executive of NIO U.S. NIO is a startup based in China, that is designing and developing high-performance, premium electric autonomous vehicles.
“I think we are targeting for it [the AV] to be below the six-figure price range. So it’s not a mass-market vehicle, it will start at the higher-end, but it’s not like a private jet” in terms of cost, she said.
The initial ownership of AVs will come from fleets and higher-end customers, Evangelos Simoudis, co-founder and managing director of Synapse Partner, said on the panel.
“I think fleets are going to be the initial users…because of the advantages they offer,” he said adding, “And then, I think the second segment will be higher-end private ownership…Think private airplanes — it’s a specific niche in the market; I think that’s where we’ll see the initial adoption and then we will go from there.”
To see the entire discussion, view the video below:Like This Post