Here's What Deutsche Bank Thinks Of Ford's Autonomous Car Announcement

Mike Levin of Deutsche Bank thinks Ford Motor Company (NYSE: F)'s autonomous car announcement "may be larger than investors currently expect."

As a reminder, Ford said that it is targeting mass production of its first fully autonomous vehicle by 2021. The company also announced it has acquired SAIPS, an Israel-based computer vision/machine learning company, as well as investments and licensing agreements with partners to augment its internal technical capabilities.

Related Link: Ford Plans To Release Fully Autonomous Vehicles For Ride Sharing In 5 Years

Levin suggested that bringing new companies to the drawing board will "prove valuable" even if their direct expertise is not directly in automotive, as is the case with SAIPS.

"At the very least, bringing in personnel with these competencies should enhance Ford's ability to utilize, customize, and maximize the technologies from key partners," Levin wrote.

Levin also pointed out that Ford has not yet divulged much of its long-term business plan and many of the details "remain fluid." The company did however disclose that initial plans will be focused on ride sharing, dynamic shuttles and delivery services.

Finally, Levin argued that a passenger car unit placed into an on-demand autonomous network could add more than $15,000 to Ford's recurring EBIT. If the company were to deploy just one percent of its North American volume into the market, then it can generate $1.4 billion in recurring EBIT per year.

"We continue to believe that over the long term, advancements in technology have potential to change business models, and perhaps also valuations for Auto OEMs," the analyst concluded. "Ford clearly agrees with this view, and we expect them to pursue this market aggressively."

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