Trace the money and steps that have left the self-driving car industry.
independent vehicle Companies and suppliers have collectively spent about $75 billion developing self-driving technology, with scant indications of meaningful revenue arising from automated car services after all that cash burn.
This has spelled disaster for Aurora Innovation, TuSimple Holdings and Embark Technology, whose shares have each fallen at least 80% this year. no wonder Intel Corporation It just lowered its target valuation for its self-driving business Mobileye to about $16 billion, a fraction of the more than $50 billion it was considering 10 months ago. Cruz, owned by General motorsStarch money At a valuation of nearly $30 billion early last year. In March, General Motors bought SoftBank Vision Fund at a price indicating the value of the project is about $19 billion.
This is what happens when new long-term technology meets the short patience of public markets and the harsh reality of rising interest rates. Many of these companies raised tens of billions of dollars long before they demonstrated their technology or approached self-sufficiency.
The hype in the past decade or so and the recent collapse raises the question whether self-driving cars ever gonna work. Anthony Lewandowski, one of Google’s early independence pioneers, World Health Organization leave for Uber Technologies and later convicted of stealing trade secrets, she now runs a startup that develops autonomous trucks for industrial sites. In this month’s Businessweek cover story, he said that less complex use cases would be the way forward for the foreseeable future.
Morgan Stanley’s Adam Jonas, who seven years ago credited tremendous value to a Tesla A mobility service that still doesn’t exist anywhere, it was said in a recent note that autonomy could be a 10 or 20 year proposition.
Companies in the space are now being forced to consider drastic measures. Aurora CEO Chris Urmson sent an internal memo in September raising the possibility of cutting costs, making the company private, separating assets or even trying to sell the company to apple or Microsoft.
Others saw a high turnover rate. General Motors CEO Mary Barra fired her Cruise counterpart Dan Amann late last year. TuSimple replaced founder and CEO Cheng Lu in March, and its general counsel James Mullen resigned in September. owned by Alphabet Waymo Dan Chu lost chief production officer last month to 23andMe.
While CEOs and investors alike are in some cases heading for the exits, the well-capitalized companies in the space are turning to new markets and ventures. Cruise plans to replicate San Francisco’s automated taxi service in Phoenix and Austin, Texas. Waymo will begin offering tours of Los Angeles and also transport beer between Dallas and Houston.
Startup Kodiak Robotics raised $30 million in private capital this week and operated its freight trucks 8,000 miles from Texas to Florida. While there was a test driver at the wheel, the human surrendered to Robot 94% of the time, Kodiak CEO and Founder Don Burnett told me in an interview. The company started moving Ikea furniture.
Burnette asked if Kodiak would be willing to part with the safety driver anytime soon.
“We are very close,” he said. “It seems we always say this. It’s been two years.”
It may take longer, but the market’s misunderstanding of the timing of autonomy doesn’t mean it will never work. The lesson is that technology as radical as automated driving has always fared better in the incubators of venture capitalists, not the wallets of impulsive stock traders.
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