The Industrial Revolution initiated a monumental shift from production by hand to machine-powered production powered by steam engines. Decades later, Henry Ford invented the assembly line, dramatically reducing the cost of a Model T and putting car ownership within the reach of average Americans.
But Anduril co-founder Palmer Luckey thinks production can go a step further. In a conversation with Andreessen Horowitz partner Chris Dixon at the a16z Founders Summit, the billionaire predicted that AI will make manufacturing so cheap that the cost of a car will decrease by thousands of dollars.
“I really believe that in our lifetime 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 almost zero, and we will compete the margins down. It’s not that crazy.”
The founder of the technology predicts that the production and recycling of vehicles will become so cheap, cars can become a seasonal purchase.
“I bet you can recycle [a car] with 90% efficiency at the end of the season,” Luckey said. “You’re going to say, ‘What’s going to be my summer car? Let’s go down to the mall and buy one and try it out.” Luckey also said that this efficiency will extend to house building as inputs such as steel, wood, and energy grow cheaper.
As the creator of the Oculus Rift VR headset and the co-founder of the defense products brand Anduril, Luckey has spent years on the cutting edge of technology. He is bullish on the economic potential of AI, citing its ability to drastically reduce costs and simplify business.
Anduril’s co-founder predicts that AI will change 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 will see is that same level of automation that has dominated textiles and agriculture [will] it starts to apply to everything,” said Luckey. “AI will make it easier to extract, process and manufacture resources.”
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 implementing AI. Rockwell Automation’s 2025 State of Smart Manufacturing report found that generative AI or causal AI had the greatest ROI for 15% of manufacturing firms last year, with many firms using the technology to address labor shortages, safeguard against cybersecurity risks, and to manage supply chains.
But while AI is playing a tangible role in some manufacturing processes, it is far from reducing costs. The average cost of a vehicle in the United States has reached a record high of $50,080 in 2025, according to Kelley Blue Book, a vehicle valuation company. Home prices have also remained stubbornly high, with US median home prices peaking in 2022 and remaining above $400,000 over the past several years.