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Oil Prices e cost of fuel cannot be understated when it comes to the strength of the auto and truck market. e oil market in the U.S. has been greatly transformed by the significant invest- ments made in oil exploration and production in the U.S. e seven most prolific regions of oil and gas production in the continental U.S. produced 4.8 million barrels of oil a day at the end of the first quarter of 2017, or one-fourth all of U.S. oil consumption. Collectively, these seven regions have increased their output by 329 percent between March 2010 and 2017, providing a compounded production growth rate of almost 19 percent annually. e cost of extracting this oil has decreased significantly in the last decade. According to Dallas Fed Energy Survey, new wells can be profitably drilled, and existing wells can produce at break-even oil prices of $45 and $24, respec- tively. is "soft cap" on U.S. oil prices should incen- tivize light-truck sales for the foreseeable future. In 2016, OPEC supplied 40 percent of the U.S.'s oil imports. is share in 2016 is reported by the U.S. Energy Information Administration (EIA) to be "lower than any year between 1973 and 2014." The Upper Story: Evolving Consumer Preferences The dramatic entry of autonomous vehicles will vastly change consumer preferences and expectations, neces- sitating a complete rethink of vehicle pricing. The ability for autonomous vehicles to liberate the "what, where and when" of consumer's lives will fundamen- tally change the "how" of how we live. How much this freedom is worth to those with physical limitations, exhausted parents and others should give a clue to its value. Treating autonomous driving as a $40,000 option might seem excessive, but consider the following. By the numbers, the average American annually spends 293 hours behind the wheel (about two months' worth of eight-hour workdays) and on average pays $125 per month for car insurance. Under the restricting assumption that an autono- mous vehicle will last only 11 years—the average car life today—it will save more than 3,200 hours of driving time, which converts to a $12 per hour cost, or about half the median U.S. hourly wage. Financing this option using an extended 10-year loan—made possible because of low autonomous vehicle accident rates—at 7 percent interest would cost about $460 per month. Furthermore, reducing the financing cost by the insurance premium savings could reduce the hourly autonomous driving cost to between $14 and $19 per hour. We project that this year will be another year in which sales stay on their high plateau of recent years. e goal of selling 17 million vehicles in a given year will only lead to the question of "can it be done again next year?" e questions that truly need answering are first how must the industry educate or re-educate buyers and influence their willingness to pay for autonomous capability? What will have to be done to convince consumers to pay double for a revolutionary new vehicle, which perhaps unfortu- nately looks similar to their last one. Also, how will the auto industry have to reshape the thinking of the finance and insurance industries to make autonomous vehicle financing attractive? Industry leaders who can answer these questions will be the critical players in shaping an increasingly lucrative industry. CONTRIBUTOR Michael Guckes is senior economist at Gardner Business Intelligence, the research and market intelligence division of Gardner Business Media. He provides forecasting, modeling and consulting services to GBI clients and content for all Gardner brands. For more information about GBI, visit gardnerweb.com. This is What Power and Precision Looks Like Technical assistance available. Asistencia técnica disponible en español. www.sct-usa.com sales@sct-usa.com 1.805.584.9495 1.800.383.2244 Single Point - Thread Mills - Port Tools - Indexable Tools - Specialty Single profile thread mills (SPTM) are made from premium submicron grade carbide. The tools cut internal or external threads in a range of thread sizes with minimal side cutting pressure. Options include ACME, stub ACME, UN, and metric. View Our Thread Mill Code Generator: www.sct-usa.com Scientific Cutting Tools productionmachining.com :: 31 SPECIAL REPORT