Prof G Markets
00:16:18 · Ed Elson, S6
[00:16:18] S5: After the break, the state of play in the autonomous vehicle race. And for even more markets insights, you can subscribe to my weekly newsletter. Simply put, go to edwardelson.substack.com. [00:16:34] S6: Are you tired of hearing about business, tech, and finance from the bros? We are the Tiger Sisters, a top business podcast with the Vox Media Podcast Network. Tiger Sisters releases every Monday, and we decode money, power, and love. And who doesn't love all those things? We are the Internet's Wall Street and Silicon Valley big sisters. Tune in every Monday for late night sister talk meets boardroom strategy. Check out Tiger Sisters on YouTube, Spotify, or wherever you get your podcasts. Welcome to the Tiger fam.
00:17:05 · S0
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00:18:15 · Ed Elson
[00:18:15] S5: We're back with Prof G Markets. Earlier this week, we discussed the future of Tesla and its foray into the lucrative autonomous robotaxi business. But while Tesla rolls out their robotaxis across the country, they face one major obstacle, and that is competition. Companies like Alphabet, Amazon, and Uber are also looking to capitalize on the future of transportation. So we would like to take a moment to attempt to answer the following question. Who is actually winning in autonomous vehicles, and what does the future of autonomous actually look like? Today, we're speaking with our very own research team associate, Dan Chiolan, who recently presented on this very topic on our Prof G plus Substack. It was a great presentation. I learned a lot, so that's why I wanted to get into it today. Dan, I see you every day, but thank you for joining me on the show. I just wanna start with a general question, which you started with in your presentation, which I thought was very helpful, which is how big of a problem are vehicle deaths today? In other words, make the case for us why autonomous is actually a good thing.
00:19:28 · Dan Chiolan, Ed Elson
[00:19:28] S4: It's sort of hard to conceptualize just how dangerous driving is because we, as Americans, do it so often. We spend on average about an hour a day behind the wheel. But every year, forty thousand Americans die in car crashes. Globally, that number is over a million. It's the leading killer of people ages five to 29. And I think why those numbers are relevant to autonomous vehicles is because ninety four percent of car crashes are due to human error. So really driving isn't dangerous because cars are dangerous or roads are dangerous. It's because humans are dangerous. So I think that's why autonomous vehicles are very... A very exciting technology because it can allow us as Americans, as people around the world to take something that we need to do every day and make it significantly safer. [00:20:14] S5: Looking at the players in this industry, obviously, Tesla is getting into robotaxis. The rollout has been... I don't even know what to say about it anymore. It's it's been, it's taken a while. Who are the actual players in this industry though, and how do they all stack up against each other?
00:20:33 · Dan Chiolan
[00:20:33] S4: Yeah. So I think we can start with Tesla. And to understand Tesla's autonomous business, you really have to split it into two. So the first is the consumer side, and that's FSD. That's the software that Tesla sells directly to Tesla owners, which allows Tesla drivers to have the car drive itself under supervision. Currently, about 1,700,000 people globally pay for it. But then there's the other side of their autonomous business, which is their Robotaxi business, which is their autonomous rideshare business that's in direct competition with Waymo and other players here in America. So here, they're doing well. They're scaling very quickly. They have a fully commercial service in six cities. And just last month, they started putting cybercabs on the road, which are their purpose built autonomous vehicles with no steering wheel. So despite the fact that they are they are moving very quickly, they're they're very clearly in second place to Waymo. Currently, Waymo does about seven times the amount of miles that Tesla does weekly. They're in 15 American cities. They're doing 500,000 paid rides weekly. So they're they're very far in the lead. I think there are two others worth mentioning. The first is Zoox, which is owned by Amazon. It's their self driving startup. They're currently in two American cities, and they have about a 100 vehicles on the road, so they're pretty they're pretty early stage. And then the last one is Uber, which actually doesn't have any vehicles or technology on its own. But through partnerships with other autonomous vehicle companies like like Zoox, like Waymo, it's able to facilitate autonomous rides in five American cities currently.
00:22:09 · Ed Elson, Dan Chiolan
[00:22:09] S5: I'm surprised to hear you say that the Tesla rollout has been quick because you say those number... Those Waymo numbers, which are phenomenal compared to Tesla. I guess what has been promising about the Tesla rollout of their robotaxi, specifically in contrast to Waymo, which on the outside, it seems like Waymo has been a lot more successful. [00:22:34] S4: Yeah. So I think the thing that that Tesla has really done well in these past few months is scale up very quickly. For a while, sort of in typical Elon Musk fashion, we were getting promises about an autonomous service rolling out in Austin and California. When in reality, you'd call a Tesla robotaxi, and there'd actually be a human safety monitor behind the In the past couple months, they've they've ditched the safety monitors in six cities. Like I said, they're they're fully commercial, fully autonomous. But the biggest advantage that Tesla has over Waymo is cost. So those Tesla Cybercabs cost about $25,000 to produce, whereas Waymo's cost upward of a $100,000. They have a a sort of much more thorough sensor load in the vehicles that they produce, which makes them more expensive. It makes them harder to build and take longer to build. So so Tesla has really ramped up. Now still, I don't mean that to say that Tesla is in first place in any sense. Tesla is still significantly behind. But just in the past couple months, they've gone from kind of not existing in terms of their robotaxi service to having something operational.