Automakers are promising more robotaxis and higher levels of autonomous driving features in passenger vehicles in the coming months, but they'll be faced with obstacles around safety concerns, affordability and a patchwork of state regulations.

Higher levels of autonomy bring the expectation of revenue streams with fatter profit margins, greater flexibility for drivers and safer transportation. Outfitting vehicles with more sensors and technology, however, represents additional costs, and asking drivers to give up more control of the vehicle, while staying attuned in the event they need to take over, comes with its own challenges.

A recent survey from the American Automobile Association found 13% of U.S. drivers would trust riding in self-driving vehicles — suggesting the need to build confidence in this kind of technology.

“The market leader will be the safety leader. The safety leader will be the market leader. I don’t think there are any shortcuts on that,” said Larry Burns, a business adviser who formerly advised Google affiliate Waymo LLC for more than a decade and led research and development and planning at General Motors Co. from 1998-2009.

GM in December halted funding for a robotaxi program at its Cruise LLC subsidiary after a year of trying to relaunch Cruise following an October 2023 pedestrian crash. It's absorbing the business to focus on the development of its Super Cruise advanced driver assistance systems in its passenger vehicles. This is a hands-free, eyes-on-the-road system labeled as Level 2 on SAE International's five-level driving automation scale.

The Detroit automaker expects roughly to double the number of the 360,000 vehicles equipped with Super Cruise on the road — 60% of which are "regular users," CEO Mary Barra said on a fourth-quarter earnings call. With 18,000 customers completing a three-year free trial last year, the automaker is seeing about 20% of customers opting to continue a subscription for $25 per month. An additional 33,000 vehicles end their trial this year, and GM expects Super Cruise will generate $2 billion in annual revenue in five years.

"There's so much change that's happening in this space right now," Barra said on the earnings calls in January. "We remain committed to autonomy, because we do think it has such a dramatic impact from a customer experience perspective for the better, and actually changes the margin profile of the business, as well."

Barra emphasized the company's commitment to higher levels of autonomy, including Level 3, which would allow drivers to take their hands and eyes off the road under certain conditions with the driver needing to support the technology.

“When you have a person helping the technology such as to confirm a right decision," Burns said, "that’s a very compelling value proposition.”

The rollout of this is "consumer demand-driven," Barra said. The company is looking at making Super Cruise standard on all of Cadillac's electric vehicles.

"When people arrive at their destination after using Super Cruise, they're more rested," she said, "which is why 80% of our customers say they either wouldn't buy a car without it or they strongly would desire it to be on their next vehicle."

Ford Motor Co. also is developing higher levels of autonomy through its BlueCruise offering, CEO Jim Farley said last month on an earnings call. Drivers have traveled more than 300 million miles with the Level 2 hands-free highway driving technology, and Ford's recent launches have expanded the models available with BlueCruise. The Dearborn automaker offers a 90-day free trial and several pricing options, including a one-time $2,495 price at purchase, a $495 annual rate and a $49.99 monthly subscription after cutting the price last year.

Ford and Volkswagen AG in 2022 pulled funding from AV startup Argo AI, and the Blue Oval absorbed its operations. That is contributing to the development of expanded hands-free capabilities under Level 2+ as well as Level 3, which are "right around the corner," Farley said.

The automaker also is looking toward Level 4, a level reserved for robotaxis for now. It denotes a fully autonomous vehicle that doesn't require a driver to take over its operations but can only operate in limited conditions. Ford is examining the potential need for a partner for that in passenger vehicle applications.

"Level 3 is a huge unlock on highway miles, eyes off," Farley said. "We are in good shape with our internal capabilities. But look, we're not so Pollyannaish about our own capability that we're not going to look at other people's system or not believe that Level 4 personal autonomy is going to be interesting at some point. They're making a lot of progress over there in Level 4."

Meanwhile, Stellantis NV — maker of Chrysler, Dodge, Jeep and Ram — last month said its STLA AutoDrive 1.0 technology is a Level 3 feature ready to handle stop-and-go commuting at lower speeds of up to 37 mph. Details on when that system focused on dense urban conditions and daily commuters will launch on vehicles, however, haven't been shared. That'll happen "once the market opens up and becomes more receptive," spokesperson Dan Reid previously told The Detroit News, though specifics weren't shared.

"They don’t want to spend money on a system that consumers don’t want to buy," said Sam Abuelsamid, vice president of market research at marketing firm Telemetry. "These are expensive capabilities. Is there a demand for this technology? And if there’s not, there's no point in putting it in there."

Stellantis also has partnered with Waymo, which operates robotaxis outside Phoenix, in San Francisco and Daly City, California, and Los Angeles. It has expansion plans for Austin, Texas, and Atlanta with Uber Technologies Inc. as well as for Miami.

Tesla Inc. CEO Elon Musk has said the EV maker, which offers a Level 2 hands-free, eyes-on-the road Full Self-Driving feature on its passenger cars, will launch a robotaxi as early as June in Austin. Ride-hail giant Lyft Inc. also plans to launch self-driving services using Mobileye Global Inc. technology to its app as soon as 2026 in Dallas.

Higher autonomy in personal vehicles

Some automakers have already launched Level 3 technologies in limited conditions. BMW AG offers a Personal Pilot L3 feature in Germany, and Honda Motor Co. Ltd.'s Traffic Jam Pilot was the first certified Level 3 technology in Japan.

In the United States, the Mercedes-Benz Group AG's Drive Pilot is certified for most major freeways in California and parts of Nevada. It allows for daytime automated driving under "reasonable weather conditions" in dense traffic on approved freeway sections with clear lane markings at speeds up to 40 mph, according to the automaker.

The German automaker declined to specify how many vehicles with the technology it has sold, but equipped EQS Sedan and S-Class models are available through participating Mercedes-Benz dealers in California and Nevada. Drivers have engaged Drive Pilot for hundreds of thousands of miles in the United States and Germany, allowing drivers to focus on other activities like communicating with colleagues, browsing the web or watching a movie, according to the company.

For expansion of the technology, the automaker cited the lack of a nationwide legal framework for technologies like Drive Pilot. Around half of U.S. states have relevant laws, but only permit testing of such automated vehicles, with the exceptions of California and Nevada. National regulations would streamline the technology's deployment, minimize redundant permitting and reporting obligations, it said.

"From the automaker's perspective, you have to have a clear blueprint for what are the rules," said David Whiston, analyst at financial services firm Morningstar Inc. "In practical application, if Texas allows it, but Oklahoma doesn't, is the car as it pulls into Oklahoma going to pull over or tell the driver to take command? We need one set of rules."

Getting into Level 3 automation creates new challenges for automakers to address. Level 2 requires eyes on the road, and Level 4 doesn't expect the driver to intervene. Level 3 is in the middle.

"We are notoriously bad at supervising automated systems," Abuelsamid said. "The better they work, the worse we are at supervising them."

Having a system that alerts the driver in proper timing and educating customers on its limitations presents new difficulties, Whiston said.

“There’s a lot of litigation risks with Level 3,” he said. “When you need to take back over control, there’s a risk that the human is sleeping, playing video games and watching, or looking out the window.”

That begs questions around liability, as well. Mercedes-Benz has said it will accept blame if a fault with its Drive Pilot system causes an accident. The commitment, however, comes with qualifications like if a driver doesn't comply with their duty of care, such as not taking over when prompted. In such cases, the driver could be held responsible.

Rethinking affordability

These systems also need driver monitoring systems, cameras, radar, light detection and ranging technologies and potentially thermal sensors that aren't available on all models today. This adds to the cost of a vehicle, another challenge as average transaction prices near $50,000.

"I don’t think it’s a coincidence you saw Super Cruise start on Cadillac," Whiston said. "Its consumers can more easily absorb that."

Federal regulations, however, also are pushing automakers to improve ADAS features, including stricter requirements for automatic emergency braking systems at higher speeds and at night that were adopted under the Biden administration. To comply with those rules — which the industry is seeking to fight because of technology limitations — automakers may need many of the sensors and cameras needed for at least Level 2+, Abuelsamid said.

Even still, autonomy has the potential to unlock value for automakers and their customers in convenience, free time and safety. That, however, requires a different mindset on affordability, Burns said.

“They’ve got to shift it from the price at the dealership to the cost per mile,” he said. “The value of being picked up at your door or dropped off at your doorstep, whether in a personally owned vehicle or robotaxi, that’s time and grief it saves you. There’s a value proposition for people.”

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