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Cadillac's Super Cruise shows GM is leading on autonomy, says ex-GM exec Lutz

Key Points
  • Cadillac said its new automated system is the only one capable of driving hands-free on highways.
  • Detroit is not lagging on autonomy or electric at all, says Bob Lutz.
Bob Lutz: People are overestimating Tesla and underestimating General Motors

Investors continue to wrongly underestimate Detroit automakers in the race to electric and autonomous cars, says former General Motors Vice Chair Bob Lutz.

In particular, the Cadillac CT6 and its semi-autonomous Super Cruise system show that GM is actually in the lead on autonomous technology, Lutz told CNBC's "Squawk Alley" on Wednesday.

The CT6 is Cadillac's flagship sedan, and when enabled by the Super Cruise system, GM says it is the world's first vehicle capable of total hands-free driving on freeways.

On Sept. 25, Cadillac began a cross-country drive to demonstrate the system, marking the first time a Cadillac would be driven hands-free on New York City freeways.

The announcement, along with other recent moves by GM and Ford on electrification and autonomy show that incumbent players are not nearly as far behind Silicon Valley on new transportation technology as some have come to believe, Lutz said.

Ford said Tuesday it is planning to overhaul its operations, aggressively cut costs and divert more resources toward electric and autonomous vehicles.

General Motors' Cruise Automation subsidiary said it is making "rapid progress" on its own autonomous driving technology.

"General Motors is an extremely competent company, as is Ford," Lutz said. "General Motors has demonstrated they can master any technology they set their mind to. And as we know from the Cadillac announcement, and the cross-country drives of the Cadillac CT6, General Motors leads in vehicle autonomy as well. I have been saying this repeatedly for years, but it always fell on deaf ears, because it was 'dumb old Detroit' versus 'smart modern Silicon Valley.' And in the real world, that just isn't true."

Of course, many companies are hard at work on autonomous cars. Audi, for example, said it will release a car in 2018 equipped with level 3 autonomy. Level 3 means the car can drive itself, but allows the driver to take over in emergencies, according to the scale created by the Society of Automotive Engineers.

In fact, at least one analyst has said it may be the German carmakers that top Silicon Valley upstarts such as Tesla.

Tesla's Autopilot system is considered a level 2. Typically, a fully manual car is considered to be level 0, while a fully autonomous car is considered to be level 5.

Tesla sells only a small fraction of the cars GM and Ford sell in a year, but its stock price soars above theirs. Tesla was up nearly 2 percent Wednesday afternoon trading around $355. GM shares were up less than 1 percent, trading at about $43, and Ford shares were up a half a percent, trading at $12.