Advancing Autonomy and Focusing on Profitability

This Week in The Autonomy Economy, The Road to Autonomy Index returned 0.70% advancing autonomy and focusing on profitability came into focus this quarter and China says a foreign company has conducted illegal mapping. This accusation comes one week after President Trump threatened to ban Chinese autonomous vehicles in America if he wins re-election. 

Could this be China gearing up to play politics and make autonomous vehicles a geo-political issue? We are unsure, but we are certain that China has global ambitions for exporting home-grown autonomous vehicle companies. Early signs of this strategy are beginning to emerge as both WeRide and Baidu are preparing to operate in the United Arab Emirates.

Then there is the public markets angle to this emerging trend. Both Horizon Robotics and Pony AI, two Chinese based autonomous vehicle companies, are preparing to go public. Alibaba and Baidu are both cornerstone investors in Horizon Robotics' forthcoming IPO in Hong Kong.

On Thursday, Pony AI filed for an IPO on NASDAQ to list under the ticker symbol PONY. Pony AI currently operates a fleet of over 250 robotaxis and counts Toyota as a strategic investor with a 16.7% stake in the company. Last month we visited with Pony AI in Fremont, CA and rode in one of their robotaxis. The robotaxi was impressive and handled challenging environments with no interventions. 

Could 2025 turn out to be the year of autonomy IPOs? Anything is possible and we will continue to track the autonomy markets and offer our insights weekly on Autonomy Markets.

WHAT’S MOVING THE MARKETS | AUTONOMY LEADERBOARD

Advancing Autonomy and Focusing on Profitability

AUTONOMY LEADERBOARD October 2024 Update

The last quarter in the autonomy economy has been full of both technical advancements and partnerships. Uber has continued to solidify their role in the autonomy economy as the company has emerged as the de facto platform for autonomy. For the second quarter in a row, Uber has retained the #1 ranking on the AUTONOMY LEADERBOARD with a bullish outlook in the software platforms category. 

On the autonomous vehicle side of the autonomy economy, Waymo has expanded in the Bay Area, ramped up operations in Los Angeles and began their early rider program in Austin. This quarter, Waymo remained the undisputed leader in the development and commercialization of robotaxis and retained their #1 ranking on the AUTONOMY LEADERBOARD with a bullish outlook in the autonomous vehicle category.

While Waymo remains the undisputed leader, Tesla is nipping at their heels. Waymo’s biggest weakness is Tesla’s greatest strength—manufacturing. While Waymo has manufacturing partnerships (Hyundai, Geely and Stellantis), the company does not have a solid long-term strategy for the development of bespoke robotaxi vehicles.

Put your emotions aside and the abundance of missed timelines, Tesla is going to build a robotaxi, and they are going to directly compete with Waymo, Cruise and Zoox. Tesla has the ambitions, balance sheet and drive to succeed. Even if they miss timelines and are misunderstood in the market from time to time, it is only a matter of time until they directly compete. 

We can envision a future where Waymo, Cruise and Tesla are the big three in robotaxis. Zoox continues to glide along with a series of vague statements until they have their TCI Fund Management moment that forces the hand of Amazon’s board. That time is coming and we believe that it will be soon. 

Amazon can only spend so much on Zoox without a clearly defined strategy until a large shareholder(s) (some of who are readers of this newsletter) question the outsized spending. Autonomy is no longer about who can build the best vehicle or the best autonomy stack, it is about being a business.

Being a business is where the autonomous trucking industry is thriving. Kodiak, led by Founder & CEO Don Burnette is focused on becoming a profitable business. Sometimes being a business means diversifying to achieve profitability and that is exactly what Mr. Burnette and the team at Kodiak have done with their expansions into defense and off-road. 

Later this year, all signs are pointing to Aurora going driver-out from Dallas to Houston carrying a commercial load brokered by Uber Freight. Once this moment happens, Aurora will enter the next phase—the business phase. When Aurora enters the business phase, it no longer becomes a question: can they do this question? It becomes how do they optimize and expand this question. 

As Aurora goes driver-out and Kodiak focuses on profitability, questions about strategy and economics continue to plague the rest of the autonomous trucking industry. Over the next 2+ years, questions will have to be answered and companies will have to demonstrate meaningful progress.

In 2027, Torc is aiming for driver-out operations, two years after both Aurora and Kodiak (off-road) have achieved that goal on a consistent basis. While the timeline is public, there is little to no insight into their commercialization strategy.

Will Stack AV and Waabi follow Torc’s timeline and also aim for driver-out operations in 2027? Even if all three companies are able to achieve driver-out operations in 2027, questions remain about their plans. When do they plan to commercialize their services? What will their business models ultimately be? Who will be the partners? Do they even need partners?

While little details are known about Torc’s, Stack AV’s and Waabi’s plans, Xiaodi Hou, Founder & CEO of Bot Auto has made his plans for Bot Auto’s commercialization strategy very clear. 

Dr. Hou joined us on The Road to Autonomy podcast for an in-depth conversation about the past, present and future. During the conversation he shared Bot Auto’s commercialization strategy and why he chose that model. The episode will be released on Tuesday, October 22nd. 

Could Bot Auto leapfrog Torc, Stack AV and Waabi to earn a slot on the AUTONOMY LEADERBOARD? Anything is possible as Bot Auto begins demos in late November. 

As we turn the calendar to the fall and winter months, we expect the autonomy economy to continue to progress, evolve and prosper. In the months ahead, we are expecting Waymo to open Atlanta to early riders in November, perhaps followed by an announcement or a new city or two by Q1 2025. 

While we do not know where the market is going to head tomorrow, we do know that the IPO market for autonomy has opened as Horizon Robotics is going public on the Hong Kong Exchange in what will be the largest IPO of the year in Hong Kong and Pony AI appears to be finally going public in the U.S. later this year. 

If Horizon Robotics and Pony AI raised a combined $1 billion, look for more investment dollars in the private markets to flow to autonomy.

The Future is Bright. The Future is Autonomous. The Future is Profitable Autonomy. 

Until next quarter.

October 20, 2024 AUTONOMY LEADERBOARD Updates

• May Mobility has been upgraded to Positive from Breakout

Outside of us upgrading May Mobility to Positive, there were no changes to the AUTONOMY LEADERBOARD this quarter.

The next AUTONOMY LEADERBOARD update is scheduled for January 19, 2025

WHAT’S MOVING THE MARKETS | AUTONOMOUS VEHICLE POLICY

Trump Threatens Chinese AV Ban, China Says a Foreign Company Conducted Illegal Mapping

On October 16th, China's state security ministry issued a statement stating that a foreign company in partnership with a licensed Chinese mapping firm “illegally conducted geographic mapping activities in the country under the guise of autonomous driving research”. 

Whether this activity was truly for developing autonomous driving maps or another matter entirely is up for debate. What is not up for debate is the fact that China’s Ministry of State Security has been cracking down on transportation data leaks to foreign companies.

The effort to crack down on data leaks (exports) is being conducted under the guise of Beijing’s Data Security law which went into effect in September 2021. Earlier this year, a foreign company with the help of a local vendor was found to have collected over 500 gigs of railway “core sensitive data”. That data was exported out of China and the local vendor was imprisoned. 

All of this is setting the stage for autonomous vehicles and China’s desire to have massive global influence over autonomous driving technology and how it’s deployed. 

China believes that autonomous vehicles are a national security issue. While under the Biden administration the United States has taken steps to secure autonomous vehicle infrastructure (hardware and connectivity), President Trump, if re-elected, wants to take it one step further and ban Chinese autonomous vehicles in America.

Whether or not President Trump wins re-election, autonomous vehicles are now a geopolitical issue and the United States must act accordingly. 

Our take: The writing is on the wall. Autonomous vehicles and autonomous vehicle technology exports are most likely going to occur in a similar manner to U.S. arms transfers. Autonomous vehicles have officially become a national security issue.

PIQUING OUR INTEREST

First, You Get Vetoes, Next You File an Ethics Complaint The Teamsters are back at it once again. In their never ending quest to ban autonomous vehicles and autonomous trucks, The Teamsters have filed an ethics complaint with the San Francisco Ethics Commission over Waymo’s lobbying efforts to enable Waymo pick-ups and drop-offs at SFO Airport. 

Autonomous Trucks Can Lower Insurance Costs In a presentation at the ATA MCE conference in Nashville, an Aurora executive stated that autonomous trucks can reduce the cost of claims because the trucks can provide real-time scenario data to authorities and insurance companies. More data, less guessing who is at fault. 

Largest IPO of The Year in Hong Kong? In a sign that the global markets appetite for autonomous vehicles is heating up, Horizon Robotics IPO is shaping up to be the largest IPO of the year in Hong Kong. As part of the IPO, Horizon Robotics plans to sell 1.36 billion shares, with a target of raising $696 million. 

We Ride to We Van On October 15th, Chinese autonomous vehicle developer We Ride unveiled their latest production ready robotaxi in China.

From Cybercab to Robotaxi Tesla has filed for Robotaxi trademarks with the USPTO (United States Patent and Trademark Office). You can read the Robotaxi fillings here and here.

Here Comes The Humanoid Robots Tesla’s Optimus robot looks like it is getting more friends, as the Toyota Research Institute (TRI) and Hyundai’s Boston Dynamics have joined forces to speed up the development of humanoid robots with artificial intelligence.

It’s All About The Experience Two San Francisco DJs ordered a Waymo, cranked up the volume and started spinning discs. Over the period of 50 minutes (22 miles), the two DJs spun tunes in the back of the Waymo as the vehicle autonomously drove around San Francisco.

SOCIAL BUZZ | AUTONOMOUS VEHICLES

1,300 Rides, Over 2,000 Guests

During Tesla’s We, Robot event on 10/10 on the Warner Bros. backlot, 2,000 guests (1,300 trips) were transported fully autonomously in both Cybercabs and Model Y’s powered by FSD 13 around an Autonomy Disneyland.

In an October 15th post on X, Ashok Elluswamy, Vice President - AI Software wrote:

Is FSD 13 the version that Tesla hopes to make unsupervised? We will soon find out as it appears that FSD 13 will be shipping soon.

Our take: FSD 12.5.4.1 is impressive, but it still needs to be supervised. Will FSD 13 be the big breakthrough? Unsure, but we remain steadfast in our belief that it is only a matter of time until Tesla cracks full self-driving (unsupervised). 

Tesla is currently ranked #1 with a bullish outlook on the AUTONOMY LEADERBOARD in the personally owned autonomous vehicle category. 

Tesla is a The Road to Autonomy Index component company

SOCIAL BUZZ | AUTONOMOUS VEHICLES

12 Companies, 452 Autonomous Vehicles

There are currently 12 companies testing autonomous vehicles in Nevada with a total of 452 active licenses. From the earliest days of autonomy, Nevada has always been a hotspot for testing and now hopefully soon commercialization.

Nevada was able to achieve this because of their regulatory environment and proximity to Silicon Valley. As California put regulation after regulation on autonomous vehicles, some companies simply jumped over the border to a more friendly regulatory environment.

Our take: The first autonomous vehicle license plate was granted to Navya in 2017. We were there with Andy Rogers when he received the plate on behalf of Navya. It was a great moment in the history of autonomy. As autonomy history has unfolded, we have had a front seat for most of it. Now we get it to share it with you along with our insights in this newsletter and on our podcasts.

THE ROAD TO AUTONOMY INDEX WEEKLY PERFORMANCE

The Road to Autonomy Index® is a high-definition lens into the emerging world of autonomous vehicles and trucks. It is the world’s first and only pure-play index designed to measure the performance of the autonomous vehicle/truck market.

For the week of October 14th, The Road to Autonomy Index returned 0.70%, the S&P 500 returned 0.85% and the NASDAQ 100 returned 0.26%. The Road to Autonomy Index underperformed the S&P 500 by 0.15% and outperformed the NASDAQ 100 by 0.44%.

Year to Date (YTD), The Road to Autonomy Index has returned 17.43%

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THE ROAD TO AUTONOMY PODCAST

Tesla's Cybercab, Waymo's Expansion and the Growth of Robotaxis

(October 15, 2024) Pete Bigelow, Senior Reporter, Automotive News joined Grayson Brulte on The Road to Autonomy podcast to discuss the latest developments in the autonomous vehicle industry including the introduction of Tesla’s Cybercab, Waymo’s expansion and the growth of robotaxis.

Watch on YouTube | Spotify | X

AUTONOMY MARKETS PODCAST

More Details Emerge on Tesla's FSD 13 Robotaxi Bet, Uber's Ambitions, Emerging Autonomy IPO Market

(October 19, 2024) As more details have emerged on Tesla's FSD 13 robotaxi strategy, Uber is not standing still as they are looking to potentially acquire Expedia. The markets for autonomy are heating up with two new autonomy IPOs on the horizon.

Watch on YouTube | Spotify | X