It's easy to believe that self-driving cars are right around the corner. Ford plans to launch a fully-autonomous car with no manual controls in 2021, and Lyft has said it will give 1 billion rides per year in autonomous electric cars by 2025. But the first generation of truly autonomous cars could cost $300,000 to $400,000 apiece, Austin Russell, CEO of Silicon Valley startup Luminar, said in a recent interview with Axios.

Russell, who is only 22 years old, started Luminar to develop better lidar sensors for self-driving cars. He says the technology hasn't progressed as far as some analysts claim.

"People think that they'll go and buy autonomous cars. That's not going to reflect reality," Russell said. Current lidar systems simply aren't reliable enough, he said, and making them more reliable will drive up costs.

Current systems have a "critical failure rate"—how often they fail to "see" an object—of one error in 1,000 miles. To be acceptable for use on public roads, that rate will have to drop to one in 5 million miles, Russell said. But lidar hasn't achieved a significant performance improvement "in decades," he said.

Instead of focusing on improving performance, lidar developers have concentrated on bringing down costs, in order to make the technology more attainable, Russell said. But he believes companies should pay more attention to optimizing the technology, which will drive up costs. That will make fully-autonomous cars too expensive for most people to own, Russell predicted.

Cars with partial autonomy may be more widely available, while the majority of people will get their first ride in a fully-autonomous car through a ride-sharing service. Large fleet operators will be better able to shoulder the cost of the technology, Russell said.

That scenario isn't too different from the plans of many companies developing self-driving cars. Initially, Ford plans to use them in ride-sharing exclusively, and Uber and Lyft are two of the most aggressive proponents of autonomous driving. Analysts predict the combination of autonomous driving and ride-sharing will be more transformative than either factor would be on its own. But if self-driving cars really do cost hundreds of thousands of dollars per unit, that could still limit the number companies are willing to put on the road—and slow the transition from human to autonomous driving.