Robotaxis: Can Automakers Catch Up With Google in Driverless Cars?
A new network of small tech companies could allow the car industry to compete with Waymo
By Patrick McGee
General Motors celebrated being the world’s largest carmaker for the 76th straight year in 2007. It was sitting on $25bn in cash. Eighteen months later, it was bankrupt.
The automotive industry is among the most capital-intensive in the world: If the economy sours, assets turn into liabilities overnight as factories churning out thousands of cars begin to haemorrhage cash. So when toxic mortgage securities blew up in 2008, causing a recession, banks performed terribly — but carmakers fared even worse.
That is what makes auto consultants at Bain so worried. They fear that carmakers are about to be hit with a one-two punch: first, they project a US recession in the next 12 to 18 months. Then, increasing numbers of baby boomers will retire, causing a structural decline so big that, they warn, US car sales could shrink from more than 17m last year to just 11.5m by 2025 — the same level seen in 2008–09, which caused GM and Chrysler to go bankrupt and Ford to suffer a $14.6bn loss.
“The collapse in auto sales in the coming years could be as severe as it was during the great…
