The idea of self-driving cars is certainly not new, but while for now they may sound like a distant idea that will take decades to develop, the technology may be closer than you think. Google, Tesla Motors and others are in a race to be the first to achieve total automation in cars.

So which company will be first? Goldman Sachs analysts think Google will be, despite Tesla’s early progress in this area. Barclays analysts are also concerned about Tesla’s attempt to move into the mass market.

Self-driving cars just a distant dream?

Indeed, the prospects offered by self-driving car technology are great. While some may enjoy getting behind the wheel and driving, there are plenty of times when driving is just a drag. Heavy traffic makes driving a stressful nightmare, and the problem is only increasing.

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In fact, Goldman Sachs analysts report in Volume 1 of “Cars 2025: A disruptive new era of the Automotive Age” that it’s estimated that Japanese spend 40 hours a year stuck in traffic. They also say that the number would be a lot higher if it was “calculated based on the actual number of drivers.”

Traffic jams are such a headache in Japan that the nation’s Ministry of Land, Infrastructure and Transport estimates that they cause more than $100 billion in economic opportunity losses each year.

Self-driving cars can enhance productivity

Self-driving car technology offers one way to battle these opportunity losses. Our time is increasingly valuable, and the less time we spend behind the wheel, the more time we can spend doing more important things. The Goldman Sachs team reports that the average American spends 300 to 400 hours per year behind the wheel.

People can also enjoy more social time together, as demonstrated by Daimler’s F 015 Luxury in Motion car. The automaker showed off the concept car at the Detroit Auto Show in January, and it features four seats that are facing each other. Daimler said it sees new value in cars as a “mobile living space.”

Further, self-driving cars could possibly reduce the number of accidents, as statistics currently show that about half a million people die from them each year. The Goldman team suggests that the number could be more than 1.2 million. Of course it’s unrealistic to expect autonomous cars to completely prevent accidents.

Drivers are generally in support of autonomous cars for several reasons, according to a recent survey conducted by Motor Fan (All charts / graphs in this article are courtesy Goldman Sachs or Barclays as noted.).

Current problems for self-driving technology

The Goldman team suggests that 2017 will be a “watershed year” for autonomous cars, suggesting that the technology may be ready for use much earlier than most believe. However, there are a number of roadblocks in the way.

Some of the biggest issues were presented at the Vienna Convention on Road traffic, and they deal with the legality of self-driving cars. For example, Article 8 of the convention’s articles states that every moving vehicle or “combination of vehicles” should have a driver who must be able to “control his vehicle or to guide his animals” at all times.

Article 13 states that drivers should “pay constant regard to the circumstances, in particular the lie of the land, the state of the road, the condition and load of his vehicle, the weather conditions and the density of traffic” so they can safely stop their vehicle to avoid accidents.

What about liability?

Further, the Goldman team brings up the issue of software risks, especially for Level 4 autonomous vehicles, which are supposed to be fully self-driving. Such software risks cause liability questions because a computer is driving the vehicle instead of a human.

If the software suddenly shuts down or reboots or there is a bug that causes the vehicle to crash, then who is at fault? Because of this issue, the analysts believe automakers should focus on Level 3 self-driving technology, which is still a step down from being fully autonomous. Here are the descriptions of the four levels of autonomous vehicles.

Recently Tesla Motors offered a suggestion regarding the liability question. The EV manufacturer has rapidly been rolling out self-driving software features to the Model S, and one of those features is a turn signal activated by the driver that would then allow the car to pass another car.

Because the signal is operated by the driver, then theoretically, the driver would be at fault in a wreck resolving from passing other vehicles. However, this issue does not address the myriad of other types of situations that can result in an accident.

Google aiming for Level 4 autonomous cars by 2017

The Goldman Sachs team also reports that Google appears to be aiming for Level 4 autonomous driving tech to be ready by 2017. However, most companies don’t expect the technology to be ready until 2020 to 2025. The analysts put together this timeline for Level 4 autonomous driving by company.

Self-driving cars could cut automobile demand

Barclays analysts recently put out their own report on “Disruptive Mobility,” and one of the questions they consider is the future of the auto industry in light of self-driving technology. Already vehicle ownership is on the decline as drivers in big cities instead opt for pooled shared autonomous vehicles. They suggest ownership will fall 50% over the next 35 years with shared vehicles to replace at least nine times the number of “traditional” vehicles. The Barclays team offers four categories of vehicles: “traditional automobiles,” “family autonomous vehicles,” “shared autonomous vehicles” and “pooled shared autonomous vehicles.”

With these four categories, they say 50% of vehicles are at risk of displacement by shared autonomous vehicles. In fact, each shared autonomous vehicle could replace nine traditional vehicles, according to their estimates. They added that the result would be a 40% decline in annual auto demand, bringing it down to about 9.5 million and 60% decline in the national car fleet to about 100 million.

They quantify these numbers by looking at the past use of horses for transportation.

What will happen to the auto industry?

As a result of falling demand for vehicles, the Barclays team suggests that automakers will have to drastically shrink their operations in order to survive. They estimate that General Motors may have to slash its production in North America by up to 68%, while Ford could have to cut it by 58%.

Luxury manufacturers could lead market share in the “family autonomous vehicles” category. Further, they think Tesla’s attempt at a mass market electric vehicle could be threatened by incumbents that enter the EV market and also by the “disappearance of the individual ownership model.”