AI Could Make Cars and Homes Almost Free: Palmer Luckey Predicts a Radical Drop in Prices

From the Assembly Line to AI-Powered Factories

The Industrial Revolution changed the world by moving production from handcrafts to machines powered by steam engines. Later, Henry Ford’s assembly line made cars affordable for ordinary Americans, transforming car ownership forever.

Now, Palmer Luckey, cofounder of Anduril and creator of the Oculus Rift, believes AI could push manufacturing even further. In a conversation with Andreessen Horowitz partner Chris Dixon at the a16z Founders Summit, Luckey predicted that AI will make it so cheap to produce goods that cars and even homes could become almost disposable.

“You’ll be able to go buy something like a Ford F-150 for $1,000,” Luckey said. “The cost of extracting and transforming materials will go near zero, and businesses will compete on tiny margins. It’s not crazy.”

Cars Could Become Seasonal Purchases

Luckey envisions a future where cars are no longer long-term investments. Instead, they could become seasonal items that you buy, use, and recycle efficiently.

“I bet you’ll be able to recycle a car with 90% efficiency at the end of the season,” he said. “You’ll walk into a store and say, ‘What’s my summer car going to be?’ and pick one out just to try it.”

This approach could also extend to homebuilding. As materials like steel, wood, and energy become cheaper through AI-driven production, constructing a house could become far more affordable.

AI’s Role in Modern Manufacturing

AI is already starting to change how companies produce goods. According to Rockwell Automation’s 2025 State of Smart Manufacturing report, some manufacturers are seeing high returns from AI, especially generative and causal AI. Businesses are using these tools to deal with worker shortages, manage supply chains, and even improve cybersecurity.

Luckey believes this same level of automation that has already transformed industries like textiles and agriculture will soon apply to larger-scale production, including cars and homes.

“AI will make resource extraction, processing, and manufacturing much easier,” he said. “We’ll see automation dominate more industries, just like it did for textiles and farming.”

Why Prices Are Still High

Despite these technological advances, the cost of cars and homes is not dropping yet. In 2025, the average price of a vehicle in the U.S. reached $50,080, according to Kelley Blue Book. Meanwhile, median home prices remain above $400,000.

Luckey argues that it’s not the materials driving costs up. Instead, he points to government regulations and policies as the main barriers.

“The components themselves aren’t expensive,” he said. “It’s the transformation process and the regulations that make everything costly.”

The Path to Radical Affordability

Luckey is optimistic that widespread affordability doesn’t require new scientific discoveries. Instead, it’s about streamlining processes and removing policy bottlenecks.

“This isn’t about waiting for a technological breakthrough,” he said. “The tech will catch up. We just need to take action and make it happen.”

In other words, the AI revolution could be less about inventing entirely new machines and more about using smart tools to make production faster, cheaper, and more efficient.

What This Could Mean for Everyday Life

If Luckey’s predictions come true, we could see a world where:

• Cars become seasonal or disposable items you recycle after use.
• Homebuilding costs drop dramatically, making housing more accessible.
• Businesses compete on razor-thin margins, driving down consumer prices.
• AI takes over tedious and expensive manufacturing processes, reducing the need for human labor in certain areas.

This vision flips the way we think about ownership and consumption. Instead of buying products to last for years, we could be entering an era where affordability and sustainability go hand in hand.

Challenges Ahead

Even with AI, Luckey acknowledges obstacles. Government regulations, policy hurdles, and logistical challenges still stand in the way of ultra-cheap manufacturing.

Moreover, society would need to adapt to a world where large, expensive, long-lasting goods are no longer the norm. Recycling systems, transportation networks, and market structures would all need to evolve to handle this new economy efficiently.

Still, Luckey believes the shift is inevitable. AI has the potential to reshape how we produce and consume everything—from everyday items to cars and homes—making luxury more accessible and changing our relationship with material goods.

A Future Fueled by AI

The combination of AI-driven automation, smarter manufacturing, and efficient recycling could redefine what “expensive” even means. Cars that cost thousands less and homes that become more attainable could transform society in ways we haven’t fully imagined yet.

Luckey’s vision isn’t just about technology—it’s about how we rethink production, consumption, and ownership. It suggests a world where affordability is no longer a barrier, and the convenience and efficiency AI brings could make what once seemed impossible, possible.

In the near future, buying a car or a house might be less about saving for years and more about choosing the best option for the season.