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Illustration: Sarah Grillo/Axios

In two weeks, the coronavirus has brought the entire U.S. auto industry to a screeching halt. When it finally sputters back to life, many companies may be forced to change, defer — or even abandon — their ambitious plans for self-driving vehicles.

The big picture: Auto factories are shut down across North America to prevent the spread of the virus among workers, while stay-at-home orders have kept car shoppers away from showrooms. The resulting financial shock means carmakers have shifted their focus to survival, not investing in expensive technologies with no clear payoff.

The uncomfortable truth about self-driving cars is that there's no clear business model yet.

  • Most carmakers, tech giants and startups racing to develop the technology assume urban robotaxis are a good place to start, because their 24/7 operation makes the economics work better.
  • But after this pandemic, shared anything seems less appealing, especially a car where there's no driver available to disinfect between passengers.
  • Spray disinfectants and ultraviolet lighting, along with antimicrobial materials, could help, along with more voice commands to replace touchscreens.
  • Even so, "I think there's a very good chance that autonomy for robotaxis may be reexamined," says Gartner Group vice president Mike Ramsey.

Autonomous delivery seems made for a pandemic like this, on the other hand. People who are afraid to go out have discovered the convenience of home delivery in huge numbers.

  • Small delivery robots like Starship, Kiwibot and Amazon's Scout were already piloting delivery services before the coronavirus hit.
  • Nuro, whose low-speed driverless delivery vans just received federal approval, could be the beneficiary of exquisite timing.
  • Other AV companies like Waymo, Cruise and Argo AI, might pivot away from driverless ride-hailing and focus more of their efforts on automated deliveries, analysts predict.
  • "This is a tremendous market opportunity for them, and I think they're definitely going to go for it," says Gary Silberg, head of automotive consulting at KPMG.

Yes, but: When the economy does begin to recover, investment capital could be hard to come by.

  • Traditional carmakers will be focused on getting their core business back up and running and might be forced to choose between spending limited resources on new vehicles or future technologies.
  • AV startups, meanwhile, could find it more difficult to secure investment capital because the timeline for self-driving cars has likely been extended, says RBC's Robert Spak.
  • Ride-hailing firms like Uber and Lyft could also struggle to keep funding their own internal AV efforts, he said.

Cruise CEO Dan Ammann told Axios his company is focused on keeping employees safe and sticking to its mission.

  • "We're fortunate in that we're stable, well-funded and have a crystal clear mission, and that's a good position to be in right now."

What's next: Industry consolidation is likely to accelerate within the next six to 12 months.

Go deeper

Sarah Palin tests positive for COVID, delaying defamation trial

Sarah Palin. Photo: Matthew Staver/Bloomberg via Getty Images

Former Alaska Gov. Sarah Palin (R) tested positive for COVID-19 on Monday, delaying the start of her defamation trial against the New York Times.

Why it matters: The trial will be closely watched, as it's a rare instance of a major media company defending its editorial practices before an American jury.

S&P 500 slides into correction territory

Data: FactSet; Chart: Axios Visuals

Stocks suffered their worst drop of the year, pushing the S&P 500 on track to fall into a "correction."

Driving the news: The benchmark S&P 500 dropped for its fifth straight day, with losses nearing 3% in early trading.

Updated 2 hours ago - Politics & Policy

Omicron dashboard

Illustration: Aïda Amer/Axios

  1. Health: Fauci: "Confident" Omicron cases will peak in February — FDA OKs antiviral drug remdesivir for non-hospitalized patients — Walensky: CDC language "pivoting" on "fully vaccinated."
  2. Vaccines: The shifting definition of fully vaccinated — Annual vaccine preferable to boosters, says Pfizer CEO — Team USA 100% vaccinated ahead of Beijing Olympics.
  3. Politics: Virginia school boards sue Gov. Youngkin for lifting mask mandate — Gonzaga University revokes NBA great John Stockton's tickets over mask stance — Arizona governor sues Biden administration over funds tied to mandates.
  4. World: Beijing Olympic Committee lowers testing threshold ahead of Games — Beijing officials urge "emergency mode" before Winter Olympics — Austria approves vaccine mandate for adults.
  5. Variant tracker