Some reasons why Google Inc (NASDAQ:GOOG)’s autonomous cars should not scare traditional car manufacturers was discussed by Craig Adeyanju in a post on Benzinga.
According to Adeyanju, the first reason why automakers should not fear the driverless Google Inc (NASDAQ:GOOG) car is insurance. He writes that insurance companies should be expected to charge higher insurance fees for the first batch of driverless cars from the internet giant.
This is because cars like those made by Google are comparable to electric cars in that they are more complicated and are more expensive to repair. This extra cost will be recouped by insurers through higher fees, he wrote.
Furthermore, the Benzinga reporter said that car manufacturers have an advantage over the internet giant because of their built-in capacity to mass produce regular cars. Google does not have this capacity, he said, which makes it need help from outside companies.
In fact, driverless cars may actually help car manufacturers because it’s likely Google will ask them for help in manufacturing its cars unless it buys its own car company, Adeyanju wrote.
Another reason why Google Inc (NASDAQ:GOOG) should not be feared in the car industry is that it still needs the green light from regulators to put its cars on the roads. Adeyanju noted the strong influence of the traditional auto industry’s lobbyists in Washington.
Google Inc (NASDAQ:GOOG) would also have to make people feel safe using their driverless cars. According to Adeyanju, part of this is proving to people that their autonomous cars will not be easily taken over by hackers.
Last but not the least, Adeyanju said that the first ever Google driverless car that will break down will create essentially a media firestorm which could very much negatively affect Google.
Duquesne Capital managed by Stanley Druckenmiller is a Google Inc (NASDAQ:GOOG)’s investors includes. The hedge fund reported 128,910 Class C shares in the company by the end of the second quarter of this year.
Disclosure: None
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