The Industrial Revolution brought about a dramatic shift from manual production to machine-operated production powered by steam engines. Decades later, Henry Ford invented the assembly line, which greatly reduced the cost of the Model T and made car ownership within the reach of ordinary Americans.
But Anduril co-founder Palmer Luckey believes production can go further. In a conversation with Andreessen Horowitz partner Chris Dixon at the a16z Founders Summit, the billionaire predicted that artificial intelligence will make manufacturing so cheap that the cost of cars will drop by thousands of dollars.
“I do believe that in our lifetime you will be able to buy something like a Ford F-150 for $1,000,” Luckey said. “The cost to extract and transform it will be close to zero, and we’ll be competing on margins. It’s not that crazy.”
The tech founder predicts that producing and recycling vehicles will become so cheap that cars may become seasonal purchases.
“I bet you can recycle [a car] At the end of the season you’re 90 percent efficient,” Luckey said. “You say, ‘What’s my summer car going to look like? Let’s go to the mall and buy one to try. Lackey also said that as inputs such as steel, wood and energy become cheaper, this efficiency will extend to residential construction.
As the creator of the Oculus Rift VR headset and co-founder of defense products company Anduril, Luckey has been at the forefront of technology for years. He is bullish on the economic potential of artificial intelligence, citing its ability to slash costs and streamline business.
The Anduril co-founder predicts that AI will upend the economics of manufacturing, adapting currently streamlined processes like clothing production to large-scale projects like building cars or homes.
“I think you’re going to see the same level of automation as in textiles and agriculture [will] Start applying to everything,” Lackey said. “AI will make resource extraction, processing and manufacturing easier. “
Luckey painted a sunny picture for the future of the production chain in the AI era. Some manufacturing companies are already reporting higher return on investment from AI implementations. Rockwell Automation’s 2025 State of Smart Manufacturing report found that generative or causal AI delivered the greatest ROI for 15% of manufacturing companies last year, with many using the technology to address worker shortages, guard against cybersecurity risks and manage supply chains.
While AI plays a real role in some manufacturing processes, it is still far from reducing costs. The average cost of a car in the United States will reach an all-time high of $50,080 by 2025, according to car appraisal company Kelley Blue Book. Housing prices also remain high, with the median U.S. home price hitting a new high in 2022 and remaining above $400,000 for the past few years.
