Morgan Stanley: Here come the robot cars (AAPL, GOOG, F)
On Wall Street, no analyst who covers the auto industry has a more out-there thesis about the future of transportation than Adam Jonas at Morgan Stanley.
On Tuesday, he continued to predict the end of driving as we know it – along with the end of traditional car ownership.
According to Jonas, a 110-year-old business model, selling individual cars to individual people, is dying and the new model will constitute "mobility as a service."
He compares the auto industry to the photography and film industry, before digital came along. Remember Kodak?
Self-driving cars are a big part of all this. And a big part of self-driving cars is ... robots! Here's Jonas:
[A]ssume 5 years from now on your morning commute you get in your semi-autonomous car, back out of your driveway and drive 1 mile (with minor computer oversight) to the on-ramp of the highway. Once on the highway, your smart cruise control with active forward collision warning takes over and keeps you in your lane for the next 6 miles. As you get off the on-ramp, you encounter bumper-to-bumper traffic on the suburban strip. Your car takes over again as you nudge forward at 0 to 3 mph for the next 2 miles. Traffic frees up and you drive the remaining 1 mile to the office parking deck. Of the 10 mile journey, you drove 2 miles and the robot drove 8 miles.
That's 80% of the driving handled by a robot, Jonas stressed. Up from 0% currently. In five years.
Sticking with his radically disruptive theme, Jonas then argues that new companies oriented toward mobility services rather than mobility ownership – like Uber – will fare better than old-school car companies, which will strain to abandon the 20th-century business model.
One assumes that he's thinking Apple and Google may be better long-term mobility bets than the example he gives of a car maker struggling to keep up with the pace of change, Ford.
Jonas and his team have seen the light, but none of this is news to the so-called advanced mobility community, a group of experts, futurists, and car designers that's been thinking about how to re-engineer 21st-century transportation for over a decade now.
Jonas, however, has an influential audience of investors. So his embrace of the brave new world of getting around could push things to a whole new level.
- Marissa Mayer has to cut 1,400 more jobs just to keep earnings flat, says Morgan Stanley
- Wall Street banks have been treading water, but that may be about to change
- Morgan Stanley is lining up behind bank stocks for the first time since the financial crisis