Houston is Hot Tonight, Cruise is in Town
June 16, 2024
This Week in The Autonomy Economy is presented by Koop Insurance, a specialist insurance provider focused on robotics and autonomous vehicles.
This Week in The Autonomy Economy, The Road to Autonomy Index returned 0.40%, Cruise expanded manual driving to Houston, the peanut gallery of naysaying autonomy continues to trumpet their agenda and China is keeping their foot on the autonomy accelerator as BYD commits $14 billion to autonomous driving.
As the development of autonomous vehicles accelerates, the business models used to commercialize autonomy are going to evolve. We envision three models ultimately defining the marketplace: robotaxis, personally owned autonomous vehicles and licensing.
The leaders of today are not necessarily going to be the leaders of tomorrow. In the As Robotaxis Have Arrived, Business Models Are Changing section we shared our thoughts on how we see the market evolving over the next decade.
Autonomous vehicles are an emerging global market. The leading markets for the development and commercialization of autonomous vehicles are The United States, China, Japan and England.
How do you see the autonomous vehicle market evolving? Respond to this email with your thoughts and we will feature your responses in next week’s newsletter.
We are on the precipice of a market that will become an economy. An economy that we call the autonomy economy.
The Road to Autonomy is now offering market intelligence services. If you are interested in learning more, please kindly send a note to hello (at) roadtoautonomy.com.
Cruise parent GM and BYD investor Berkshire Hathaway are The Road to Autonomy Index component companies
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Autonomy Avenue Whispers
Scaling Autonomy in The Land of the Rising Sun There are whispers on Autonomy Avenue that a U.S. based autonomous vehicle company that counts several Japanese corporations as investors is preparing to expand in Japan and launch commercial service later in the year.
What’s Moving the Markets
Houston is Hot Tonight, Cruise is in Town
Bright lights, Houston is hot tonight, they’ve got a moon man on the telephone and Cruise autonomous vehicles on the roads. I do not mind, I have autonomy on my mind. The business of autonomy is clearly on the mind of both GM and Cruise as they continue to ramp up supervised autonomous driving with safety drivers behind the wheel.
On June 11th, Cruise announced Houston as the 3rd city behind Phoenix, AZ, and Dallas, TX where the company has resumed manual driving. On the same day in New York at the Deutsche Bank Global Auto Industry Conference, Paul Jacobson, CFO of GM said GM is going to invest an additional $850 million into Cruise as it works on a strategic review of the business.
What could happen at the end of that strategic review? It’s anyone’s guess at this time, but Mr. Jacobson did offer some clues during his presentation.
I think this is a really important R&D phase, not just for the notion of robotaxi, but ultimately for personal autonomy. It’s kind of a pay as you go, but this buys us time to continue to pursue our strategic review.
– Mr. Paul Jacobson, Executive VP & CFO, GM
Could GM be looking to accelerate their plans for personally owned autonomous vehicles? It’s a possibility and one that we would not rule out. When this could occur we are unsure, but are confident that GM remains all-in on autonomous vehicles.
At Bernstein’s 40th Annual Strategic Decisions Conference on May 30th, Mary Barra, Chair and CEO of GM announced autonomous vehicles are one of GM’s four business pillars.
[The] four pillars of our business. It’s ICE, it’s EV, it’s software and AV.
– Ms. Mary Barra, Chair & CEO, GM
Regardless of what direction GM ultimately takes with Cruise, one has to give credit to Ms. Mary Barra, Mr. Mark Reuss and Mr. Paul Jacobson for not folding like a cheap suit when Cruise faced its darkest hour. The decision made by GM’s leadership was gutsy and bold. It is a move that will reward GM shareholders over the long run.
Seven months ago, no one would have predicted that Cruise would be back and operating this quickly. After all, the company went through a dark period followed by an internal investigation, rebooted and came out stronger.
Several analysts counted Cruise out and wrote their valuation down to zero, we did not. We believed in the Cruise’s long-term potential and GM remained in The Road to Autonomy Index because of Cruise.
While we believed in the company, we did not foresee the rapid progress that the company has made over the last seven months. With the rapid progress Cruise has made, we are officially putting the company on upgrade watch for the AUTONOMY LEADERBOARD July update.
Our take: Cruise continues on their mission. Next step, fully autonomous operations.
Cruise parent GM is a The Road to Autonomy Index component company
12th Annual Florida Automated Vehicles Summit
The 12th Annual Florida Automated Vehicles (FAV) Summit will be held in Tampa, Florida, September 4-6, 2024. FAV assembles industry leaders from around the world to address technologies, operations, and policy issues.
FAV is focused on gaining insight into what Florida is doing to create the ideal climate for the implementation and deployment of autonomous and connected vehicle technologies.
Please contact Amy Maguire maguire@flpolicyproject.com for more details on speaking, sponsorship and attending.
Our take: FAV hosted by Former State Senator Jeff Brandes is one of our favorite conferences of the year.
This post is brought to you by the Florida Policy Project
As Autonomy Drives Forward, The Peanut Gallery’s Trumpet Blares Louder and Louder
It’s a shame that the peanut gallery of naysaying autonomy continues to attack the advancement of autonomous vehicles for their own self-righteous gain. The ever-intensifying trumpet blaring is advocating for unachievable standards for autonomy that simply do not apply to human drivers.
Why? It’s simple, there is no path for their own personal enrichment if the development and commercialization of autonomous vehicles continues down its current path. Autonomy is advancing for the benefit of humanity. Autonomy will make our roads safer and usher in economic prosperity.
Today, driving or riding in a vehicle is dangerous. So dangerous in fact that 40,990 individuals perished in a motor vehicle traffic crash in 2023. Frankly it’s more dangerous to drive your vehicle to the grocery store than it is to fly on a plane.
The big difference is that a plane is highly automated. Autopilot is engaged north of 90% of time during a commercial flight. Autopilot does not get distracted nor do autonomous vehicles, but human drivers do.
Distracted driving is a major problem that is only growing with the proliferation of smartphones. In 2022, 3,308 individuals perished in a motor vehicle traffic crash that involved a distracted driver. While these numbers are tragic, they do not take into account the millions of individuals that were injured in crashes.
How many of these crashes were caused by smartphones is unknown. What is known is that smartphone related crashes are a problem and they are underreported. These crashes are underreported because, unfortunately, they have become all too commonplace.
Being distracted has become an epidemic and one that is only set to grow because the smartphone has become an addiction. The biggest unfortunate beneficiary of this trend is children. Children are wired to their smartphones, a trend that began in early childhood when parents shared phones with their children.
Think it was nice to get a respite during dinner? Think again. Today that same child has been completely rewired for immediate euphoria and instant gratification. Then it was Mickey Mouse Clubhouse, today it’s TikTok, Instagram and texts. Mickey Mouse is innocent, TikTok, Instagram and texts are mentally anguishing.
Because of the way children are being raised on smartphones and devices, they crave the immediate euphoria instant gratification that comes with a post or a text.
This psychological behavior will not stop when they are behind the wheel of a vehicle. An addiction is an addiction and unfortunately children have become addicted to smartphones.
Children born in mid-2010’s who have smartphones and are unfortunately addicted to them will begin to drive over the next 3 to 6 years. Their smartphone addiction will not miraculously stop the moment that child sits behind the wheel of a vehicle and puts it in drive for the first time.
They are simply not wired for not being attached to their smartphones, which presents a dilemma — what to do? While some would argue to simply take away the phone, we know that is not a practical long-term solution.
The solution is autonomous vehicles. Autonomous vehicles do not drive distracted and those same children can use their phones in the vehicle without having to worry about concentrating on the road.
In 2023, zero individuals died in an autonomous vehicle traffic crash. Vision zero is achieved with autonomy, yet when presented with the facts members of peanut gallery hide behind obscure definitions and tout videos showing autonomous vehicles driving erratically to incite fear and sow discord.
Erratic driving happens every single day, yet there is no effort to film and promote this behavior. Why? It simply does not fit the narrative that autonomous vehicles are unsafe.
Autonomous vehicles offer a solution to make our roads safer by eliminating distracted driving. Facts are facts. Human drivers are stressed out and distracted.
Stress is being exasperated by a weakening economy and the need for instant gratification. Yet faced with the backdrop of this reality, the peanut gallery of naysaying autonomy continues their righteous march towards irrelevance for their own personal gain.
It’s time to usher in the future of autonomy for the benefit of society. Our children are counting on us to do the right thing.
Our take: As the old adage goes one man’s loss is another man’s gain. This is exactly what the peanut gallery of naysaying autonomy wants to happen. They want to benefit from the demise of autonomy, unless it’s done on their terms benefiting their wallets.
If you are interested in learning more about how bad children’s addictions to phones and screens have become and how much worse it could get, we would recommend reading The Anxious Generation by Jonathan Haidt.
It’s an eye-opening book that will make you question every time you see a child on a device.
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China Steps on the Autonomy Accelerator
China has stepped on the autonomy accelerator as the country has prioritized autonomous vehicles. The country’s vast acceleration of the development of autonomous vehicles was documented in a June 13th The New York Times article China is Testing More Driverless Cars Than Any Other Country.
Autonomous vehicles are a national priority for China. With the government providing significant help to ensure the development and commercialization of autonomous vehicles, China is pulling into the poll position.
The government is providing the companies significant help. In addition to cities designating on-road testing areas for robot taxis, censors are limiting online discussion of safety incidents and crashes to restrain public fears about the nascent technology.
– Keith Bradsher, Shanghai Bureau Chief, The New York Times
As China prioritizes commercializing autonomous vehicles, The United States risks falling behind if Congress cannot come together and usher in a National Autonomous Vehicle Framework.
The Sleeping Giant has been awake for decades diligently working on advancing their global tech agenda. First it was chips, then electrification and now it’s autonomy. The electric vehicle supply chain runs through China and the autonomous driving supply chain currently runs through Taiwan, but for how long?
Our take: A change is going to come, but how that change ultimately looks is still open for debate.
As Robotaxis Have Arrived, Business Models Are Changing
There are currently more than 280 million registered cars in the United States that are in operation roughly 5% of the time. The other 95% of time, they sit idle depreciating and running up bills.
Why pay for an asset that depreciates and costs money to operate (charging, gas, insurance, parking) when there is an alternative that provides the same benefits — autonomous vehicles.
We envision a not-so-distant future in which people become less dependent on personal vehicles because of the increased accessibility and convenience of [autonomous] ride-hailing.
– Chris Ludwick, Director of Product Management, Waymo, as told to Newsweek (June 13, 2024)
As autonomy advances, we envision three models ultimately defining the marketplace; robotaxis, personally owned autonomous vehicles and licensing. Today, the robotaxi market is currently dominated by Cruise, Waymo and Zoox with May Mobility bringing up the rear.
In the emerging personally owned autonomous vehicles market Tesla is at the forefront, followed by GM and their plans for leveraging Cruise’s technology to develop personally owned autonomous vehicles.
Then there is the licensing market that encompasses Tesla, Waymo and Wayve. As these markets collectively evolve we expect to see overlap with a handful of winners ultimately emerging and becoming “autonomous driving operating ecosystems”.
Who those winners ultimately will be has yet to be determined, but what has been determined is that Tesla is once again about to disrupt an entire market.
Our take: The next 12 months in the autonomous vehicle market will define the next decade.
Cruise parent GM, May Mobility investor Toyota, Tesla, Waymo parent Alphabet and Wayve investor Microsoft are The Road to Autonomy Index component companies
Social Buzz
#14 in The Motor City
On June 12th, May Mobility announced their 14th deployment to date. May Mobility has been the little engine that could as they continue to develop their technology in an economically sustainable manner.
Beginning June 20th and running through 2026, May Mobility will be operating an autonomous vehicle service six days a week, across 68 stops in 11 square miles of downtown Detroit
If you are interested in learning more about May Mobility, we would recommend the following podcast:
- Driverless in Sun City, A Conversation with Edwin Olson, CEO & Co-Founder of May Mobility (January 16, 2024)
Our take: With their continued progress, May Mobility is now being considered for inclusion on the AUTONOMY LEADERBOARD as part of the July update.
May Mobility investor Toyota is a The Road to Autonomy Index component company
BYD to Invest $14 Billion in Autonomous Driving
BYD is planning to invest $14 billion in developing autonomous driving technologies. While no timeline was given for the investment, it’s a clear sign that China and the Chinese automotive industry views the development of autonomous vehicles as a key component of their business moving forward.
Our take: China clearly has its sights set on autonomy. The time to pay attention is now.
BYD investor Berkshire Hathaway 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. 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 June 10th, The Road to Autonomy Index returned 0.40%, the S&P 500 returned 1.58% and the NASDAQ 100 returned 3.47%. The Road to Autonomy Index underperformed the S&P 500 by 1.18% and underperformed the NASDAQ 100 by 3.07%.
Year to Date (YTD), The Road to Autonomy Index has returned 12.10%
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The Road to Autonomy Index Component Companies
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The Road to Autonomy Podcast
The Road to Autonomy podcast features unconventional conversations about the future of mobility and the `Autonomy Economy features an insider’s perspective on the economics of autonomy. New episodes weekly.
Joanna Buttler, Head of the Global Autonomous Technology Group, Daimler Truck North America joined Grayson Brulte on The Road to Autonomy podcast to discuss the introduction of the autonomous battery electric Freightliner eCascadia demonstrator, Daimler’s 2027 autonomous truck commercial launch and the company’s vision for the future of autonomous trucking.
Listen on The Road to Autonomy | Apple Podcasts | Spotify | YouTube Music
Tuesday, June 11, 2024
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A weekly newsletter featuring insight and commentary on the autonomy economy™ and how the financial markets are viewing its emergence.
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