Specialist
VP at a developer of autonomous driving technology
Agenda
- North America AV (autonomous vehicle) commercialisation update, outlining unit economics and go-to-market strategies of major competitors
- Risk mitigation and market acceptance in the AV sector
- Infrastructure adaptation and implications of infrastructure adjustments for integrating AVs
- Impact on market positioning from innovations, especially sensors and V2V (vehicle-to-vehicle) and V2I (vehicle-to-infrastructure) communications
- Public trust and inclusivity outlook – rate of AV adoption and TAM opportunity
Questions
1.
How would you evaluate the recent regulatory development of the expansion of robotaxis to full 24-hour service in the San Francisco municipal region? What important factors are you considering following this regulatory development? What are the most important forward-looking implications?
2.
Could you talk about the regulatory developments and progress made in the past couple of years leading up to this decision by the CPUC [California Public Utilities Commission]? What has been done on the part of the operators, be it Waymo or Cruise, to finally sell municipalities, leaderships and consumers that this technology and industry is viable?
3.
Do you believe AV [autonomous vehicle] technology was at a sufficient maturity level to be approved for a full-hour service in a major municipality such as San Francisco? Outside of simply adhering to certain testing standards and trials, did you feel this was the right decision and they were ready to go to market here?
4.
What are your thoughts on the readiness of the infrastructure and overall approach for AV technology in the sense of how risky it is to go to market now? Regarding the concerns surrounding connectivity issues that led to a couple of traffic jams following the announcement of the regulatory approval for 24-hour service, where approximately 10 Cruise vehicles had sat within a busy intersection, how do you think about this? Is this an anomaly or is this indicative that the approval was too early and ambitious at this point?
5.
What are key factors to consider as players evaluate their fleet of AVs and try to ensure that the readiness and maturity of the technology and infrastructure is there?
6.
Who do you think is ready in terms of a first-to-market benchmark across the major players such as Waymo, Cruise and others in North America? Who are you most confident in to reach a full mass commercial market for robotaxis?
7.
What are tangible differences in terms of the ADAS [advanced driver-assistance systems] technology the players utilise or their respective supply chain networks? You mentioned that Waymo has been struggling particularly more vs Cruise. Why do you think that is?
8.
Can you describe how vertical integration is being used to access the leadership network that General Motors/Cruise would have? How do you see that fundamental difference between Waymo and Cruise playing out over the long term? Do you consider Cruise to be more fundamentally advantaged because of what it’s able to leverage through its OEM owner?
9.
What are the key differentiations in the integrations and retrofittings of the respective ADAS software? How would you differentiate between Waymo’s approach and technological capabilities and Cruise?
10.
What is the possibility of emerging competitors being able to replicate from a testing stage the maturity of the technology that Waymo and Cruise eventually launch with to commercial markets, and essentially waiting this out until the benchmarks are set and then coming along and following their lead, but catching more momentum? What is the risk of either Waymo or Cruise getting first to market and then having another competitor upend them? Do you consider this a very feasible possibility?
11.
Can you discuss the unit economics and what they currently look like from an industry standard benchmark point of view? For example, cost per miles or the typical revenue stream that we’re going to probably be seeing that’s charged to the consumer. What would you anticipate would be the norm over the next 6-12 months as they launch more heavily into San Francisco and potentially other cities?
12.
How are leaders thinking of the long-term margin profile of an AV business? What long-term profitability EBITDA margin goals do you think the Waymos and Cruises have in mind in a best-case scenario?
13.
Regarding the sensors and elements of the beginning portion of the value chain in terms of procurement and the relationship with the JVs, where is the most cost optimisation going to take place? How much cost can you bring down if we’re thinking about the current cost of procurement to source the technology needed to retrofit regular vehicles into robotaxis?
14.
What do you make of Tesla’s commentary on robotaxi software and development following its annual shareholders meeting in May 2023? What is its go-to-market strategy here and what is its competitive positioning?
15.
How confident are you in Tesla’s forward-looking implementation of robotaxis and its success? Would you wager that it comes out on top here vs Waymo and Cruise?
16.
What do you make of general OEM pull-outs from AVs following the shutdown of Argo by Ford and Volkswagen? Do you think there is a waning demand or interest from the OEMs as the market moves cyclically, they focus on other areas of the business and might return to robotaxis as a more future priority? What are your thoughts on the AV divergence and strategies of Ford and Volkswagen vs General Motors?
17.
The TCI Fund had communicated to Waymo’s parent company, Alphabet, in November 2022 of its concern around robotaxi losses. There seems to be speculation that the cost of these programmes is rising YoY. Do you see a shift in tide here following the good news coming out of San Francisco and the promising markets in Los Angeles and Austin? Do you think this will be enough to sell the shareholder community that this technology still has strong momentum and potential behind it to be profitable?
18.
A publicly disseminated report in September 2021 noted that the cost of robotaxis typically would range on a low end of USD 1.42-2.24 per mile for operators. Have you seen this figure increase significantly? What do you make of the range in the first place? What might a viable range look like in H2 2023 and into 2024?
19.
How have utilisation rates tracked over the last couple of years? How has utilisation increased in key markets such as San Francisco?
20.
Who do you think has stronger customer affinity between Waymo and Cruise in North America?
21.
A report from McKinsey suggested that per-mile cost of operators of robotaxis may see a 50% reduction between 2025 and 2030 as the elements of the cost structure overall improve across various points. Do you think this is overly optimistic or would you side with this general estimate?
22.
What is the difference in the technology maturity in North America vs EMEA vs APAC? Could you discuss the dynamics of international competition and how much bleed-over and knowledge-share exists among competitors in the space, using Pony.ai as an example? How would you compare the North American market vs EMEA and APAC?
23.
What robotaxi operators do you see coming out on top among Waymo, Cruise and other key players such as Mobileye over the next 3-5 years?
24.
What do you make of the pace that players such as Waymo and Cruise are taking right now, as many have commented and eyed the Dallas and Los Angeles areas as the next viable points? Are the companies being overly ambitious and too aggressive in their goals as they haven’t cost-optimised themselves in the San Francisco market as of yet?
25.
What would be a safe range that you would like to see in terms of the total number of vehicles in Dallas vs Los Angeles that would make the most sense for Waymo?
26.
With the rising cost environment we’ve seen from 2022 to 2023 and the impact on the technology sector in particular, we saw some heavy labour cost-cutting and pressure on Waymo in particular. Do you see any fundamental danger or a reason to be cautious of the company with considerations to labour cuts that it arguably wasn’t forced to make? Do you think it’s at a competitive disadvantage in terms of the buy-in it has from its primary backers?
27.
Regarding the UAW’s [United Autonomous Workers’] potential strike against the Detroit big three automakers, there is controversy surrounding the labour costs related to JVs. What implications could this have for Cruise if labour costs for JVs sees a significant increase as a result of these labour negotiations?
28.
What is your 6-12-month outlook for the AV and robotaxi space?
