The Industrial Revolution ushered in a monumental shift from hand production to machine-operated production powered by steam engines. Decades later, Henry Ford invented the assembly line, dramatically lowering the cost of a Model T and placing car ownership within the reach of average Americans.
But Anduril founder Palmer Luckey thinks production can go a step further. In a conversation with Andreessen Horowitz partner Chris Dixon at a16z’s Founders Summit, the billionaire predicted AI will make manufacturing so cheap the cost of a car will drop thousands of dollars.
“I really do believe that in our lifetimes you’ll be able to go buy something that’s like a Ford F-150 for $1,000,” Luckey said. “The cost of extracting and transforming it will go to near zero, and we’re going to compete the margins way down. It’s just not that crazy.”
The tech founder predicts producing and recycling vehicles will become so cheap, cars could become seasonal purchases.
“I bet you’ll be able to recycle [a car] with 90% efficiency at the end of the season,” Luckey said. “You’ll say ‘what’s my summer car going to be? Let’s go down to the mall and buy one and try it out.’” Luckey also said this efficiency will extend to homebuilding as inputs such as steel, wood, and energy grow cheaper.
As the creator of the Oculus Rift VR headset and founder of defense products firm Anduril, Luckey has spent years at the cutting edge of technology. He’s bullish on AI’s economic potential, citing its ability to drastically cut costs and streamline business.
The current state of AI in manufacturing
The Anduril founder predicts AI will upend the economics of manufacturing, adapting current streamlined processes for things like clothing production to larger projects, like building a car or a house.
“I think what you’re going to see is that same level of automation that has dominated textiles and agriculture [will] start to apply to everything,” Luckey said. “AI is going to make it easier for resource extraction, processing, and manufacturing.”
Luckey paints a sunny picture for the future of the production chain amid the AI era. Some manufacturing firms have already reported a higher return on investment from AI implementation. Rockwell Automation’s 2025 State of Smart Manufacturing report found generative AI or causal AI had the biggest ROI for 15% of manufacturing firms last year, with many firms using the technology to address worker shortages, safeguard against cybersecurity risks, and to manage supply chains.
But while AI is playing a tangible role in some manufacturing processes, it’s still far from lowering costs. The cost of a vehicle in the U.S. hit a record high of $50,080 in 2025, according to Kelley Blue Book, a vehicle valuation company. Housing prices have also remained stubbornly high, with median home prices in the U.S. hitting a high in 2022 and remaining above $400,000 over the last several years.
Luckey said, though, it’s not the inputs that are keeping costs up. He said he thinks the government is the factor that’s keeping prices sky high.
“The components are not expensive,” Luckey insisted. “It’s the transformation and the regulation that have made it really expensive.”
For Luckey, the path toward radical affordability depends less on new scientific discoveries and more on overcoming policy bottlenecks.
“This is what I mean when I say we don’t need technological breakthrough so much as we just need to just do things,” Luckey said. “The tech to do this is going to catch up.”
