Self Driving and Waymo

[Saluki]

I wonder how much Waymo could be worth in 10 Years.  Even if all new cars sold were self driving starting tomorrow, there are still legacy cars that will stay on the road for another decade.  As fewer legacy cars are driving each year, the benefits of self-driving get stronger. 

 

However, If there were only one self driving company, it would be better than several, because they cars could talk to each other and avoid accidents, instead of trying to predict what the other driver, or AI is going to do next. 

 

So if that is the case, and GOOG wins that fight, then auto makers would have to license it from them.  Car insurance would get cheaper if you used the car AI that is the most popular because it could avoid the most accidents since accidents wouldn't occur when it encounters another car using it's same AI, but might with other systems that fewer users.  Unless different self driving systems could commute with each other. 

 

The self driving eco system could become a self-reinforcing loop that broadens the moat. Besides fewer accidents if all cars used the same self driving, the self driving could reduce the level of accidents so low that you wouldn't need such heavy cars or expensive features like airbags.  How much would that be worth to automakers?  Wouldn't that help with global warming?  Lighter cars take less gas and require less dirty coal to make the steel for the car. 

 

Traffic jams would be a thing of the past because self driving cars wouldn't crash on the highway, and computers talking to each other are very good at minimizing the space between things moving in the same direction.  Walmart and Amazon do this in their warehouses with boxes, why not with cars? 

 

Apple watches can monitor your vital signs.  Wouldn't it be great if your car could sense that you were having a heart attack and drive you to the hospital while it called them and told them that you are on the way? 

 

Google charges me for cloud storage and I'm sure I'll be paying it for the rest of life, now that I've started.  Will self driving cars be a SaaS model too?  Will people need to have their own cars if you can call a Taxi with Waymo and it would be a lot cheaper than Uber, since there is no driver to pay, and the cars will be used 24hours a day? 

 

My brother has a Ford Mustang from the year that he was born, that he restored.  He says he'll never get a self-driving car.  I'm sure there are people who loved to ride horses who said the same thing.  But eventually the costs of upkeep for the hobby outweighed the benefits and everyone got a car. 

[DooDiligence]

Maybe P & C risk gets shifted to the Waymos of the world?

[Spekulatius]

I see no way that self driving will not be a monopoly for many reasons. If communication with other car is the issue, industry standard will do that. I don’t think it’s going to drive viability  because most of the cars are not self driving and will not talk to anyone for at least a decade to come.

[Spekulatius]

If you want to make a bet on self driving, MBLY is probably the best one and can be owned for $11B in market cap. It’s still majority owned by Intel. They probably have the OEM solution with the highest market share by far.

Edited August 29 by Spekulatius

[rogermunibond]

How many hours of autonomous driving does MBLY have?

 

I think part of Waymo’s advantage is their lead in AV data over Cruise, Uber, even Tesla.  

[Spekulatius]

2 hours ago, rogermunibond said:

How many hours of autonomous driving does MBLY have?

 

I think part of Waymo’s advantage is their lead in AV data over Cruise, Uber, even Tesla.  

I think it’s wrong question to ask, because Mobileye product is only part of the solution and most systems currently are still just safety systems. But they have plenty of crowdsourced mapping data. In a way they want to make the shovels for the self driving gold rush.

https://www.sec.gov/ix?doc=/Archives/edgar/data/0001910139/000110465924026792/mbly-20231230x10k.htm

Edited August 29 by Spekulatius

[alpha]

4 hours ago, Saluki said:

However, If there were only one self driving company, it would be better than several, because they cars could talk to each other and avoid accidents, instead of trying to predict what the other driver, or AI is going to do next. 

 

I believe the US department of transportation has already published drafts of vehicle intercommunication standards and open protocols that automakers will have to implement by law eventually (timeline depending on how much lobbying goes on)

[fareastwarriors]

If you ever get a chance to ride Waymo, it's so cool. Makes me think "the future is here." 

[KPO]

Those who have done this in Phoenix know it’s pretty impressive, but doesn’t seem like a winner takes all business model. Alphabet may get a nice block of patent revenue from this business, but like many gold rushes, a single business rarely wins. 

[Spekulatius]

I don’t think it’s going to winner take all either. GOOG has a $2T market cap and if Waymo gets commercialized, they are going to offer either the driving as a service or a suite of hardware and software as a kit for OEM to build and design into cars. I think GOIG will struggle with this because they are not customer focused and hard to work with.

 

MBLY has a $11B market cap and $10B EV. They work with most OEM anlread and their safety systems are already on dozens of models at high volume. Their approach is to make incremental improvement  that step up from Level 2 to Level 3 driving. Each step up will require much more complex systems and they state that ASP goes up ~4x from  to L3. If they also gain volume there could be huge growth eventually.

You get much more bang for the buck. I also think that if INTC sells their controlling stake, MBLY will get acquired.

 

I have no position yet, but the recent decline makes this now a reasonable bet, albeit risky.

Edited August 29 by Spekulatius

[Milu]

I would be careful not to rule out Tesla. Waymo looks like it's ahead on technology at the moment due to the fact that they run very expensive cars with all kinds of sensors in a few geofenced areas with good weather and somewhat predictable driving conditions. Tesla are taking a more generalised approach with the eventual aim of being able to drop a car anywhere, without any prior knowledge or programming of the area, and have it able to drive itself successfully. This is a lot slower to solve initially but could potentially be the better strategy. 

 

Will be interesting to see how it plays out. Funny thing is that I have about a 10% position in Alphabet and around the same in Tesla so will be satisfied if either pull it off.

 

There was a good recent podcast that Patrick O'Shaughnessy had with Gavin Baker that goes into this in a lot more detail.

https://podcasts.apple.com/us/podcast/gavin-baker-ai-semiconductors-and-the-robotic-frontier/id1154105909?i=1000666758592

[fareastwarriors]

Waymo eyes S.F. robotaxi expansion, personal vehicles after first-year ‘success’

[Saluki]

While Waymo is still by far the leader in total miles driven, it looks like Zook, by Amazon, is leading in "miles per disengagement."  That's the number of miles that you drive before a human has to touch the wheel. 

 

https://thelastdriverlicenseholder.com/2024/02/03/2023-disengagement-reports-from-california/

 

Is anyone familiar with Zook?  Are they testing on the highways (easier than a city like San Francisco) or are they racking up miles in a place like Arizona?  It seems odd that one company would be able to perform so much better than the others if it was working with a lot fewer cars, and thus fewer data points.  

[rogermunibond]

Waymo is definitely the leader from the US perspective but there are lots of others making progress in the space, but less known to US investors.

 

Wayve is a Autonomous startup in the UK that Uber signeed a partnership deal with.

 

Also, Uber is buying 100K BYD vehicles to be leased to global Uber drivers.  BYD has an Autonomy partnership with Huawei.

 

I think there are probably other Chinese Autonomy plays too like Baidu.

[Libs]

Highly recommend this Waymo discussion thread. Some really good insight IMO.

 

https://teslamotorsclub.com/tmc/threads/waymo.208830/page-229

 

BTW - took a Waymo ride in SF last month. It was great. It's pretty surreal to be driven around that way. 

Edited September 3 by Libs

[rogermunibond]

Good thread @Libs

 

[rogermunibond]

 

[jfan]

https://x.com/TaylorOgan/status/1833455617798750255

 

This is a video from Huawei's ADS. 

[Spekulatius]

1 hour ago, jfan said:

https://x.com/TaylorOgan/status/1833455617798750255

 

This is a video from Huawei's ADS. 

Very impressive. What is interesting is that Huawei‘s ADS doesn’t rely on HD mapping. HD mapping is of limited value and a crutch because things changeable quickly and the most dangerous changes are not reflected in HD maps most likely. This system has sophisticated sensor suites with 3 Lidar systems. Lidar is great because it scans the environment with an active laser or radar beam and immediately gives a picture of the environment including the distance of any object without relying on software interference.

 

Now Huawei ADS will never drive on US roads (and possible not European roads either) because the company is blacklisted and deemed government controlled. It would be the CCP‘s wet dream to have millions of Scanner vehicles driving through US and mapping out everything  with centimeter precision and beaming the data back to the CCP cyberintelligence headquarter.

 

I am invested in this sector through some recently acquired MBLY shares. I think they have their work cut out for to competence China. MBLY in their advanced systems also uses LIDAR. Looks like they dropped optical LiDAR in favor or Radar LiDAR. Radar LiDAR may be cheaper and has other advantages but is lower resolution.

 

The self driving future is slowly coming but it‘s clear to me that Tesla is not leading here, although what they have done with quite cheap camera only system is quite impressive.

Edited Thursday at 11:34 AM by Spekulatius

[rogermunibond]

 

[fareastwarriors]

6 hours ago, rogermunibond said:

 

 

Why does Waymo need to partner with Uber?  Seems like they can just bypass the likes of Uber/Lyft and do direct just fine.

[jfan]

On 9/12/2024 at 7:32 AM, Spekulatius said:

I am invested in this sector through some recently acquired MBLY shares

I will check this one out. I've been listen to Driving with Dunne podcast which had a number of good discussions on EVs, China, Batteries and Software Defined vehicles. He had John Wall, SVP and Head of engineering at QNX, discuss his views on autonomous driving. His opinion only but his thoughts are that the liability issue of autonomous vehicles is very much in the air and full driver acceptance may be a ways off. His prediction in 2014 was maybe 2035, but he thinks this is likely still too aggressive (in 2024). His thoughts are that Level 1 --> 5 progress will be incremental with OEMs specifically focused on safety features and a gradual consumer adoption over time.