Why Are Self-Driving Cars Over-Hyped Like 3D Printing?

TL;DR

Self-driving cars are the popular technology being over-hyped because their broad adoption is likely much farther away than current enthusiasm suggests. At CES, the vast majority of booths and exhibits appeared eager to claim a connection to connected cars, autonomous vehicles or self-driving technology. The discussion compares that excitement with 3D printing’s peak of inflated expectations and explains why the transition could take more than 10 years.

Transcript

Chris Hill: Last time you were here, we were talking about how a couple of years ago, Matt Argersinger went to CES and was struck by how many 3D printing companies there were, and he just shook his head and thought, "This is not going to end well for the vast majority of these companies." David Kretzmann: Yeah, and there weren't many this year. Hil... Read More

Key Insights

• Scarcity followed the earlier frenzy: The absence of many 3D-printing companies at the later CES gives the comparison a visible starting point. A couple of years earlier, their sheer number had concerned Matt Argersinger. That reversal illustrates how quickly intense exhibition-floor attention can fade once a technology’s realistic market and applications become clearer.
• Hype has a recognizable sequence: David Gardner’s framework begins with a peak of inflated expectations, when enthusiasm surrounds a technology or trend. Reality then produces a trough of disillusionment. Kretzmann uses this sequence to interpret CES enthusiasm, suggesting that popularity and promotional saturation can identify expectations without proving that widespread commercial adoption is close.
• Consumer 3D printing disappointed: The earlier promise was not merely that 3D printers would find specialized uses. Supporters imagined a printer in every home, use by everyone and transformation of every industry. Kretzmann says reality revealed a fairly small market with few realistic applications at the time, especially for consumers, making it a cautionary comparison for autonomous vehicles.
• CES messaging became highly repetitive: Kretzmann slightly qualifies his claim that nearly every booth promoted autonomous technology, but still describes the vast majority of booths and exhibits as wanting a piece of the trend. The repetition extended across auto manufacturers and sensor companies, each emphasizing a link to connected cars, self-driving cars or autonomous vehicles.
• Direction and timing are different: Kretzmann does not argue that self-driving cars are pointless or that the world is moving away from them. He explicitly sees transportation heading in that direction. His concern is timing, because acknowledging a plausible destination does not establish that the required technology, vehicle turnover and road presence will arrive immediately.
• Vehicle replacement slows adoption: Consumers must be given time to buy new vehicles, which Kretzmann says will not happen quickly. Even if autonomous systems improve, broad use depends on those systems reaching enough vehicles. The physical replacement cycle therefore separates impressive demonstrations and corporate announcements from a realistic population of self-driving cars on the road.
• Sensors remain part of progress: The technology itself must improve, and Kretzmann specifically identifies sensors as another area needing improvement. This makes adoption more than a question of consumer excitement. Companies must advance the systems that support autonomous operation before self-driving vehicles can become numerous enough for the larger transportation vision described in the discussion.
• Eliminating ownership is especially distant: The conversation distinguishes self-driving capability from the broader claim that autonomous transportation could eliminate car ownership. Kretzmann says enough vehicles must first contain improved technology for that outcome to become realistic. This places the most sweeping vision beyond initial deployments and shows why the current hype may compress several stages into one expectation.
• Corporate deals show strategic interest: General Motors’ $500 million investment in Lyft demonstrates that major companies viewed the area as a future bet. Hill also mentions reports of an expected Ford Motor and Google joint venture at CES. Although that announcement never happened, both examples show companies exploring the trend without proving that immediate transformation is inevitable.
• A missing announcement signals patience: Hill says either Google walked away from the expected Ford Motor joint venture, Ford walked away or both did. The reason is not established, so the discussion does not claim one. Instead, the absent deal supports a narrower observation: interested companies can view autonomous vehicles as a future investment while deciding there is no rush.
• Earlier acquisitions offer a warning: Stratasys and 3D Systems later wrote off many acquisitions made during the 3D-printing surge. Kretzmann interprets those write-offs as admissions that the companies had tremendously overpaid for businesses they were acquiring. Corporate participation therefore cannot, by itself, establish that buying aggressively during a period of enthusiasm is a smart decision.
• Benefits do not erase the timeline: Kretzmann says he loves the technology and believes it could potentially save many lives while making the world more efficient and better. Even so, he rejects a one-year or two-year transformation. His stated expectation is an industry and trend that will emerge, take place and grab hold over more than 10 years.

Questions & Answers

Q: Why are self-driving cars being compared with over-hyped 3D printing?

Both technologies attracted a level of enthusiasm that appeared to outrun their immediately realistic applications. Consumer 3D printing once carried expectations of a printer in every home and changes across every industry, but it became clear that the market was relatively small and practical consumer uses were limited. At CES, the vast majority of booths and exhibits seemed eager to associate themselves with connected cars, self-driving cars or autonomous vehicles. Kretzmann therefore sees self-driving cars near the same peak of inflated expectations that 3D printing had occupied. The comparison concerns timing and expectations, not a claim that autonomous technology has no relevant uses.

Q: What made self-driving cars look over-hyped at CES?

Kretzmann saw autonomous transportation promoted across the vast majority of booths and exhibits, although he acknowledged that saying every booth would be a slight exaggeration. Auto manufacturers repeatedly highlighted their participation in self-driving or connected vehicles. Sensor companies also emphasized their connection to the trend. That promotional saturation suggested that nearly every company wanted a piece of the same story. Because meaningful adoption still requires technical improvement and vehicle turnover, the volume of attention appeared greater than the technology’s immediate readiness.

Q: How long could widespread self-driving-car adoption take?

Kretzmann says the transformation will not occur within one or two years. He expects the industry and trend to emerge, develop and take hold over more than 10 years. Consumers need time to buy new vehicles, and that replacement process will not move quickly. Technology and sensors must also improve, then reach enough vehicles for extensive autonomous driving to become realistic. The timeline reflects these practical adoption requirements, even though he believes the world is moving toward self-driving transportation.

Q: Why can autonomous vehicles not become mainstream overnight?

Widespread adoption depends on more than companies demonstrating interest at CES. Consumers must replace existing vehicles with newer ones, which Kretzmann says takes time. The underlying technology and sensors also need continued improvement. Those capabilities must then appear in enough vehicles to make large numbers of self-driving cars on the road realistic. Each requirement slows the transition and makes immediate predictions, including the elimination of car ownership, premature.

Q: What does the hype cycle explain about emerging technology?

The hype cycle describes a peak of inflated expectations in which people become enamored with a technology or trend. Reality eventually sets in, leading to a trough of disillusionment. David Gardner used 3D printing to illustrate this sequence on Rule Breaker Investing. Expectations for universal home use and industry-wide transformation exceeded the technology’s realistic consumer applications. Kretzmann applies the same framework to self-driving cars because CES enthusiasm may be advancing faster than practical adoption.

Q: What investments showed corporate interest in self-driving cars?

Hill identifies General Motors’ $500 million investment in Lyft as one sign of interest from the auto industry. He also recalls reports that Ford Motor would announce a joint venture with Google at CES. That announcement did not occur, and the discussion does not establish whether Google, Ford or both stepped away. These examples show companies considering autonomous transportation as a future bet. They also support Hill’s point that corporate interest can coexist with a belief that there is no immediate rush.

Q: What warning comes from Stratasys and 3D Systems?

Kretzmann says companies also pursued 3D-printing opportunities aggressively during that technology’s period of intense enthusiasm. Stratasys and 3D Systems later wrote off many of their acquisitions. He describes those write-offs as effectively acknowledging that they tremendously overpaid for companies they had snapped up. Their experience shows why visible corporate activity does not automatically make an investment decision wise. He uses that precedent to argue for caution when evaluating enthusiasm around self-driving cars.

Q: Does the discussion reject self-driving technology entirely?

No, Kretzmann says he loves the technology and the direction in which it is moving. He believes it could potentially save many lives and make the world more efficient and better. He also accepts that autonomous vehicles have relevant uses and that transportation is heading toward them. His objection is to expectations that the shift will happen within a year or two. Keeping the benefits and the more-than-10-year development horizon together provides the perspective he believes current enthusiasm lacks.

Summary & Key Takeaways

• Remembering the 3D-printing surge: Chris Hill recalls Matt Argersinger visiting CES a couple of years earlier and being struck by the number of 3D-printing companies. Argersinger believed the boom would not end well for most of them, and David Kretzmann notes that few such companies appeared at the current CES. Hill therefore asks which technology now resembles that earlier wave of intense attention and appears unlikely to deliver immediate results.

• Applying the hype-cycle framework: Kretzmann cites David Gardner’s discussion on Rule Breaker Investing of a peak of inflated expectations, when people become enamored with a technology or trend, followed by a trough of disillusionment as reality sets in. He uses consumer 3D printing as the example. Expectations once included a printer in every home and transformation across every industry, but realistic consumer applications proved limited and the market appeared relatively small.

• Seeing autonomous technology everywhere: After attending CES, Kretzmann concludes that self-driving cars may occupy the position 3D printing held a couple of years earlier. He describes the vast majority of booths and exhibits as seeking a connection to connected cars, self-driving cars or autonomous vehicles. Every auto manufacturer and sensor company seemed to emphasize its involvement. The direction looks credible, but the concentration of promotional attention signals that expectations may be running ahead of reality.

• Explaining why adoption takes time: Kretzmann says the transition will not happen overnight because consumers need time to purchase new vehicles, while the technology and sensors still need to improve. Enough equipped vehicles must reach the road before widespread self-driving use or the elimination of car ownership becomes realistic. He accepts that the world is moving toward autonomous transportation, but argues that relevant applications do not justify assuming rapid, universal adoption.

• Separating investment from urgency: Hill points to General Motors investing $500 million in Lyft and reports that Ford Motor was expected to announce a Google joint venture at CES, although no announcement occurred. Kretzmann warns that corporate enthusiasm did not make aggressive 3D-printing investments wise, noting write-offs by Stratasys and 3D Systems after overpaying for acquisitions. Self-driving cars could save lives and improve efficiency, but he expects the trend to take hold over more than 10 years.