LiDAR system, Cost per mile of vehicle, low cost lidar, lidar, shared autonomous vehicles, autonomous cars, google, GOOG, ark, ark investment management, ARKindu, ARKQ, industrial innovation

Low Cost LiDAR Will Save Lives

UPDATE (02/13/16): At CES2016 Quanergy announced the future release of a solid-state system that will cost $250 or less per unit, or $1,000 or less per car.1 This is a dramatic price drop from the $70,000 Velodyne LiDAR system in Google’s original prototype. Though we had anticipated these cost declines in our analysis below, they serve to underline the dramatic upheavals encroaching upon an automotive ecosystem about to be enabled by and upturned by disruptive technology. At the new price tag, ARK anticipates that LiDAR (Light Detection And Ranging)—once only incorporated into prototypes sitting at the technological frontier—will now find its way into every credible autonomous platform and accelerate the pace of autonomous development.

Car owners pay for their cars even when they’re idle. For people who drive infrequently, shared vehicle services like Uber are more cost effective than owning a car. In the future, car services could become dramatically more affordable when shared vehicles become autonomous and there’s no need to compensate a driver. Further, a decline in the price of the LiDAR system2 will snowball this trend, accelerating the uptake of shared autonomous vehicles (SAVs).

A typical one mile trip in San Francisco costs roughly $6.84 by taxi. If Google GOOG were to start an SAV service today3, ARK has estimated that it could price its service at $0.57 per mile, or more than $0.10 per mile less than a personal car, as shown in the chart below. 4

It gets better. ARK expects that with an autonomous system of $2,000, the price of an autonomous taxi could drop to $0.355 per mile, given the improvement in autonomous error rates6 and the drop in electric vehicle battery costs,7 while still providing a healthy return on capital to the service provider. Unless car owners are intent on driving more than twenty times the average annual mileage of the current American driver, they should be planning to sell their cars sometime in the next ten years.

LiDAR system, lidar, Autonomous Vehicles, industrial innovation, innovation research, ark invest, arkindu

Not only will a low cost LiDAR system make autonomous cars more affordable, they also will encourage more automakers to use the technology in both fully and semi autonomous cars. LiDAR is a superior distance and velocity sensor compared to traditional cameras8, so more OEMs using LiDAR will lead to better informed autonomous systems, creating a better experience for passengers and increasing the adoption rate of autonomous taxis. Ultimately, with the lower cost LiDAR system more people should be able to access a safer driving experience at a low price and up to 1.2 million lives could be saved globally per year.

LiDAR system, autonomous vehicles, car services, LiDAR, lyft, safety, shared autonomous vehicles, the sharing economy, uber, Velodyne

  1.  Based on statements from Delphi and ARK research, it is likely that each car will have 4 units.
  2.  LiDAR is a crucial component to the perception system that helps an autonomous vehicle “see”. It is a system of lasers used to create a 3D map of the vehicle’s surroundings.
  3. 2/12/16
  4.  Typical drivers travel 13,500 miles per year in their car. This includes costs which are not often considered, such as depreciation, insurance, maintenance, and parking. See graph in our “Autonomous Cars, Enormous Opportunity”
  5.  Please also note that since the original publication of this blog, ARK has updated its price per mile estimate for an autonomous vehicle to $0.35 after factoring in the cost of remote human operators that could guide vehicles in emergencies.
  6.  Today Google’s monthly car report shows that the cars require manual intervention roughly 35% of the time. However, ARK’s analysis of the improvement rate of autonomous mode shows that this could decline to just 10% by 2020. ARK envisions a remote control center where trained drivers would be able to give autonomous taxis commands wirelessly when needed. Source: ARK Investment Management LLC and https://www.google.com/selfdrivingcar/reports/
  7.  While the average car costs $30,000 today, ARK sees the price of an electric vehicle with 100 miles of range dropping to roughly $15,000 by 2020. Stay tuned for this published research. Source: ARK Investment Management LLC and http://www.usatoday.com/story/money/cars/2013/09/04/record-price-new-car-august/2761341/
  8.  LiDAR system directly measures distance through flashes of lasers, where cameras use algorithms to calculate distance. This also makes LiDAR a better velocity sensor because velocity is change in distance over time.


ARK's statements are not an endorsement of any company or a recommendation to buy, sell or hold any security. For a list of all purchases and sales made by ARK for client accounts during the past year that could be considered by the SEC as recommendations, click here. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. For full disclosures, click here.