U.S. Proposes Banning Chinese Autonomous Vehicles

This Week in The Autonomy Economy, The Road to Autonomy Index returned 3.11%, the U.S. Commerce Department announced a notice of proposed rulemaking that would effetely ban Chinese autonomous vehicles in the U.S., Governor Newsom of California stood on the side of the autonomy economy, vetoed two anti-autonomous vehicle bills and Xiaodi Hou announced his new autonomous trucking startup—Bot Auto.

The idea of banning Chinese autonomous vehicles in the U.S. has been floated for years now, but the idea became a reality on Monday, September 23rd, the U.S. Commerce Department announced a notice of proposed rulemaking that would, if finalized as proposed, prohibit the sale or import of vehicles that have hardware and software integrated into the Vehicle Connectivity System (VCS) and software integrated into the Automated Driving System from China and Russia.

Autonomous vehicles contain a lot of trade secrets and intellectual property that are proprietary to the companies developing autonomous driving. This intellectual property could be stolen and sent to China if not carefully guarded as we have seen individuals in the past attempting to steal trade secrets and bring them to China.

In 2018, an individual on Apple’s Project Titan team was arrested at the San Jose airport and charged with stealing trade secrets and physical hardware from Apple. Then in 2019, another individual was arrested for trying to steal Apple Project Titan trade secrets and bring them to China as well. 

As autonomous driving has evolved and Apple scaled up their once hyped autonomous driving program, there were several houses in and around Cupertino engaged in corporate espionage. This was six years ago and unfortunately it’s probably still happening today. Whether or not the proposed rulemaking will help to put an end to this behavior has yet to be determined. 

On this week’s edition of Autonomy Markets, Grayson Brulte and Walter Piecyk discuss the U.S. Commerce Department's proposed ruling, Waymo's LA expansion and the investor hype leading up to Tesla’s We Robot event on 10/10. Please note, that we have moved up the release time of Autonomy Markets to 10am EST from 2pm EST on Sunday. 

Then on Tuesday, we are driving into the world of computer vision and releasing a The Road to Autonomy podcast with Vlad Voroninski, Co-Founder & CEO of Helm.ai. Followed by an Autonomy Economy podcast with Dean Foreman, Chief Economist of the Texas Oil & Gas Association on Wednesday about Hurricane Helene and the current state of the oil and natural gas markets. 

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WHAT’S MOVING THE MARKETS | AUTONOMOUS VEHICLE POLICY

U.S. Proposes Banning Chinese Autonomous Vehicles

On Monday, September 23rd, the U.S. Commerce Department announced a notice of proposed rulemaking that would, if finalized as proposed, prohibit the sale or import of vehicles that have hardware and software integrated into the Vehicle Connectivity System (VCS) and software integrated into the Automated Driving System from China and Russia.

In the proposed rulemaking, vehicles that are not used on public roads such as agricultural or mining vehicles would be excluded from the proposed rulemaking. We question, why? What are the benefits to this carveout as connectivity can travel for miles?

From an economic standpoint, we view the proposed rulemaking in its current form as having little to no economic impact at this time, as the U.S. only imported $14.4 billion worth of auto parts from China in 2023. 

But, potential economic impacts could already be brewing as Beijing is pressuring Chinese companies to buy locally produced artificial intelligence chips instead of NVIDIA. What lever will Beijing pull next and what could the potential economic impacts of that decision be? 

Over the last several years, it has become very clear that autonomous driving is becoming both a national security issue and an export issue. Both the United States and China want to control the market for autonomous driving.

While the U.S. is currently leading in the development of autonomous vehicles and trucks, China is currently leading in the commercialization of autonomous vehicles and trucks. 

If the market continues to evolve in its current form we see a scenario where autonomous driving is geographically segmented. Chinese autonomous vehicle companies will operate primarily in China with exports to Asia, Australia and pockets of Europe. 

U.S. autonomous driving companies will operate primarily in the U.S. with exports to Canada, UK, Europe and Japan. At this time we do not see a U.S. autonomous driving company gaining any significant market share in Asia, excluding Japan for the foreseeable future. 

We are still in the early days of the autonomous vehicle and truck industries. A lot of policies are still yet to be written and implemented. 

Our take: Word on the street is that there is a second proposed rulemaking coming down the pipe. The big question is what is in that proposed rulemaking and why break it into two during an election year?

WHAT’S MOVING THE MARKETS | AUTONOMOUS VEHICLE POLICY

Governor Newsom Continues to Embrace the Autonomy Economy

On Friday, September 27th, Governor Newsom of California vetoed Assembly Bill 3061 and Assembly Bill 2286 which would have put undue regulations on autonomous vehicles and banned autonomous trucks (weighing over 10,001 pounds). 

This is the second year in a row that Governor Newsom has vetoed bills that would have effectively banned autonomous vehicles and autonomous trucks in California. Last year, the Governor vetoed Assembly Bill 316 which would have prohibited the operation of an autonomous truck weighing over 10,001 pounds or more on public roads for testing purposes, transporting goods, or transporting passengers without a human safety operator physically present. 

AB 316 was not about safety, it was about politics and it would have harmed California’s economy as Dee Dee Myers, Senior Advisor to the Governor and Director, Governor’s Office of Business and Economic Development rightly pointed out in an August 15, 2023 letter to Assemblymember Aguiar-Curry.

Not happy last year with the veto, Assemblymember Aguiar-Curry re-introduced a similar bill, Assembly Bill 3061 to once again try and ban autonomous trucks weighing over 10,001 pounds. Why? Assemblymember Aguiar-Curry’s largest donor base is unions. 

Unions have been outspoken about their desire to ban autonomous trucks in California. They have even gone as far as making banning autonomous trucks an issue in determining who they will back for California Governor in 2026 when Governor Newsom is termed out. 

In his veto message for AB 2286, the Governor wrote the following:

Governor Newsom clearly understands California is lagging in the commercialization of the autonomous vehicle and trucking industries and risks being left behind as the autonomy economy begins to emerge and take shape.

Governor Newsom did the right thing by vetoing both Assembly Bill 3061 and Assembly Bill 2286. California’s economy will be stronger because of the vetoes. 

Our take: The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of tyranny. — James Madison, The Federalist No. 47. This time, tyranny did not prosper. The checks and balances of Government once again prospered.

WHAT’S MOVING THE MARKETS | AUTONOMOUS TRUCKS

Don’t Call It a Come Back

Xiaodi Hou is back and he is building autonomous trucks once again, this time with a new team, new attitude and a new company—Bot Auto. Just don’t call it a comeback as Dr. Hou is not holding back any punches, as he looks to reinvent himself with a new company and a new approach to autonomous trucking.

Can he do it again? Can he avoid the mistakes and pitfalls of the past? Investors seem to think so as Bot Auto came out of stealth with $20 million in seed funding.

Our take: Dr. Hou will be joining us on The Road to Autonomy podcast in October for in-depth conversation about the past, present and future.

PIQUING OUR INTEREST

I Robot to We Robot It will be 26,976 days since Isaac Asimov published I, Robot on December 2, 1950 when Elon Musk turns the world’s attention to We Robot on 10/10. At the event, we are expecting the following to be unveiled: a robotaxi with no steering wheel or pedals, a robotaxi with a steering wheel and pedals and an update on Optimus. Perhaps, Optimus even gets a friend (hence We Robot).

Uber Continues to be the Platform for Autonomy Dara Khosrowshahi continues to be the master dealmaker in autonomy. On Wednesday, September 25th, Uber announced a partnership that will bring WeRide’s autonomous vehicles onto the Uber platform in the UAE. 

Could FSD Be Coming to the UAE? On Friday, September 27th, Elon Musk met with HH Sheikh Tahnoun bin Zayed Al Nahyan, Deputy Ruler of Abu Dhabi at Giga Texas in Austin. In summarizing the meeting, HH Sheikh Tahnoun tweeted the following: “Today we discussed with Elon Musk the latest developments in the field of advanced technology and artificial intelligence and ways to enhance joint cooperation.” Perhaps FSD might be coming to the UAE in the future.

Scania and Fortescue Are Co-Developing an Autonomous Mining Road Train Scania and Australian mining company Fortescue have partnered to develop an autonomous trucking system for use at Fortescue’s iron ore operations in Christmas Creek, Queensland, Australia. 

Bad boys, bad boys, whatcha gonna do, Waymo is Going to Bust You! In another case of crime doesn't pay, but criminals never seem to learn, a group of individuals vandalized a Waymo in San Francisco. Little did they know, or perhaps they forgot, but Waymo vehicles have cameras and footage has gone viral. It’s only a matter of time until the vandals are caught and held responsible. 

SOCIAL BUZZ | AUTONOMOUS VEHICLES

May Mobility is Expanding to Georgia

May Mobility continues to be the little engine that could. On September 26th, May Mobility announced they are expanding operations to Peachtree Corners Georgia with public service beginning the week of October 7th. While the service area will be small, it’s another positive step for the company as they ramp up commercial operations.

If you are interested in learning more about May Mobility, we would recommend listening to the Driverless in Sun City, A Conversation with Edwin Olson, CEO & Co-Founder of May Mobility (January 16, 2024) podcast.

Our take: We believe that the ultimate market for May Mobility is Japan. The country’s aging population combined with the Japanese Government’s support of autonomy and May’s business model makes it the ideal market. Not to mention May Mobility’s two largest investors are NTT and Toyota. In our opinion it is only a matter of time until May Mobility expands to Japan.

May Mobility is currently ranked #5 with a breakout outlook on the AUTONOMY LEADERBOARD in the autonomous vehicle category. 

SOCIAL BUZZ | AUTONOMOUS VEHICLES

Waymo Ads Begin Popping Up Across San Francisco

Waymo has begun advertising in San Francisco, including inside of fortune cookies. Could this be a sign that Waymo is looking to gain market share from traditional rideshare services such as Uber and Lyft in the city? Or is the company merely trying to build the brand and garner public support, in case local elected officials try to ban autonomous vehicles in San Francisco or put undue regulations on them?

Our take:  On today’s edition of Autonomy Markets (22:18 minute mark), Grayson Brulte and Walter Piecyk discuss the importance of the autonomous vehicle industry developing a meaningful communications strategy that resonates with both riders and investors. Could this be the first potential step in Waymo (and hopefully others) beginning to tell their stories?

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

Waymo parent Alphabet is a The Road to Autonomy Index component company

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 September 23rd, The Road to Autonomy Index returned 3.11%, the S&P 500 returned 0.62% and the NASDAQ 100 returned 1.10%. The Road to Autonomy Index outperformed the S&P 500 by 2.49% and outperformed the NASDAQ 100 by 2.01%.

Year to Date (YTD), The Road to Autonomy Index has returned 17.50%

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THE ROAD TO AUTONOMY PODCAST

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(September 24, 2024) Aleksey Matyushev, Co-Founder & CEO, Natilus joined Grayson Brulte on The Road to Autonomy podcast to discuss optimizing air freight with autonomous blended wing body (BWB) aircraft.

Watch on YouTube | Spotify | X

AUTONOMY MARKETS PODCAST

Waymo’s Potential Pivot to Hyundai and Zoox’s Upcoming Launch

(September 22, 2024) In this episode of Autonomy Markets, Grayson Brulte and Walter Piecyk discuss Waymo’s potential pivot away from Zeekr to Hyundai, Zoox’s commercialization strategy and why Uber is the platform for autonomy.

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