Specialist
Former global leader at Waymo LLC
Agenda
- Autonomous vehicle industry competitive dynamics including state of technology in 2021
- Waymo’s (NASDAQ: GOOGL) equity funding efforts
- Commercialisation phases – level 4 and 5 autonomy
- Commercialisation timeline expectations including potential safety impediments
- Near-term risks and recent executive departure concerns
Questions
1.
Could you give an overview of the autonomous vehicle industry and the key trends and themes that you think the investment community should monitor right now?
2.
Could you estimate Waymo’s cash burn rates considering the two capital raises it has gone through since the start of 2020?
3.
Could you elaborate on the headcount aspects of cash burn? How could this change once Waymo starts to scale up a fleet into other cities and may have to hire more personnel in areas such as fleet operations and fleet management?
4.
Are there any easy levers for limiting cash burn? There’s public reporting dating back a couple of years on the cash burn rates in Uber’s autonomous vehicle business, and you mentioned the sell-off to Aurora. Do you think cash burn is inevitable until we reach commercialisation, potentially in the not-too-distant future?
5.
Do you consider Cruise and Aurora to be the most serious challengers to Waymo? How much of a lead do you think Waymo has on them technologically and operationally?
6.
Why hasn’t Waymo expanded its commercial fleet efforts past small areas in Phoenix and Chandler? Why not more urban areas of Phoenix?
7.
How long do you expect it to take for Waymo to be in all of the top 10 US cities? Does Phoenix count as a top 10 city to the company?
8.
Do you think fleet expansion will happen within the next 3-4 years, or even sooner, given Waymo already has 60,000 Fiats and 20,000 Jaguars on order from a couple of years ago?
9.
You touched on some of Waymo’s long-term rivals. How do you assess some of the other prominent autonomous vehicle players, including Argo AI and Japanese OEMs [original equipment manufacturers] such as Nissan and Honda?
10.
Do you think your opinion that this is a 2-3-player market is widely shared in the industry? Do you think most of the OEMs consider this to be inevitable?
11.
Level 4 autonomy seems to be the near-term solution for Waymo and other prominent players, but level 5 is obviously the longer-term goal. What is your expected timeline for this level?
12.
How should we frame the trucking-market revenue opportunity that Waymo and other players have referenced? How could Waymo think about this opportunity internally?
13.
Could you elaborate on why trucking may be more difficult to automate than ride-hailing? I’ve heard reporting that runs contrary to your thinking.
14.
Do you doubt there’s near-term value to enabling trucks to drive autonomously on the freeway before a driver pilots it to the end destination?
15.
Waymo’s cost per mile is only slightly cheaper than Uber’s currently. Do you think there’s a near term path to lowering this cost? Is having a driver the biggest cost? Is Waymo’s support operational labour cost significant?
16.
What costs and OPEX would the USD 1 per mile revenue figure you quoted include?
17.
What could be the unit economics on a USD 30 ride in 2025? How could those economics differ from Uber or Lyft’s current unit economics?
18.
How scalable is the machine learning and other software? Are there other variable costs we should be aware of? I know this software has a reputation for scaling cheaply and easily.
19.
Could you elaborate on the mapping process and its capital-intensiveness?
20.
What could be the size of the autonomous vehicle market in 2-3 decades when fewer individuals and households own vehicles? Recent Waymo CEO John Krafcik and the leadership teams at Cruise, Argo AI and Aurora have all talked about this, as have major OEM CEOs such as Jim Farley at Ford and Mary Barra at General Motors. How may these management teams assess the relationship between D2C autonomous vehicles and the fleet in a couple of decades?
21.
To what extent could the autonomous fleet be supplemental to car ownership vs a replacement? I know Krafcik has talked about this.
22.
Could you discuss lidar, which is the other big cost for the vehicles themselves? How could this cost decrease as Waymo scales?
23.
What are your thoughts on the difference between simulation and real-world miles, given Waymo and Krafcik’s comments on simulation? Is there any evidence that simulation miles are on par or even superior to real-world miles?
24.
How long could the launch process take in a new city, given the mapping and other operational groundwork involved?
25.
How helpful do you consider Waymo’s work in Chandler to future launch processes?
26.
How much may Waymo need to spend on marketing and advertising to build awareness of autonomous vehicles and break down public reluctance towards them?
27.
How could OPEX scale with revenues between launching in the second or third city and launching in the 10th city?
28.
You mentioned San Francisco as a logical next city for Waymo. Why do you think this is the right decision for the company, as Waymo seems to agree? My understanding is that San Francisco could be difficult given the challenging road network. When could a launch happen?
29.
I believe General Motors said in 2017 that it could get below USD 1 per mile for a ride by 2025. Do you doubt this? Is below USD 1 per mile even possible in the next decade?
30.
What gives you confidence that Waymo will succeed in the longer term, given Google’s spotty history of commercialising cutting-edge robotics and technology? I’ve heard comparisons to Netscape in the early internet days.
31.
Do you think Waymo doesn’t perceive Tesla as a viable competitor? The name has been conspicuously absent from our discussion. Does CEO Elon Musk’s premise that real-world data provides advantages in the autonomy race seem unrealistic to you?
32.
How do you assess Krafick and the Waymo leadership team’s relationship with CEO Sundar Pichai and the leadership at Alphabet/Google?
33.
You suggested that consolidation is inevitable in the industry. Could Waymo make an acquisition, given Alphabet’s strong balance sheet?
34.
What are your best- and worst-case scenarios for Waymo over the next 2-3 years?
35.
Do you have any closing comments on Waymo? Is there anything we didn’t get a chance to discuss?
