Topic: Cars
Tesla is now worth more than Ford after delivering a record number of cars for the quarter – Recode (Apr 3, 2017)
There are two things here: firstly, Tesla’s Q1 delivery number, and secondly what’s happened to its share price since it was announced. Stock valuations are interesting, but far from definitive as indications of what companies are worth or who’s “winning” in any meaningful sense. Tesla’s stock price is all about trajectory, and an unusual (perhaps even unwarranted) amount of investor confidence and enthusiasm that the company which is currently very small and unprofitable compared to its legacy peers will quickly catch up on both fronts. That, in turn, requires believing in Tesla’s manufacturing projections, which require a massive increase in its growth rate, from 56% annual growth in the past year to something much faster to hit its 500k target for 2018, which would be a six-fold increase over its 2016 numbers. Long-term, it seems very likely Tesla will reach that kind of scale, but given its track record, there’s every reason to believe it will hit this and other related targets later than it has projected. On that basis, then, the valuation seems that much less justifiable on the basis of any near-to-medium-term results.
via Recode
Ford leads self-driving tech pack, outpacing Waymo, Tesla, Uber: study – USA Today (Apr 3, 2017)
This article is based on a study by a company called Navigant Research, and it seems to be an evaluating of companies’ strategic assets rather than any actual capabilities today, so it’s worth noting that context for their rankings of companies here. Notably, they rank traditional carmakers in the first six spots, with Waymo apparently the first non-traditional / tech company in the rankings. That’s notable, because all the numbers suggest Waymo is out in front in testing of autonomous driving technology in California by a long way, and although we don’t have equivalent data for Michigan, where Ford does much of its testing, I’d be surprised if it had done many more miles. So this is mostly an evaluation of the benefits the big automakers derive from their existing massive scale and capabilities in building vehicles and bringing them to market, something none of the pure tech companies has (Tesla, of course, has some small-scale manufacturing capability and is looking to ramp fast, but comes in 12th in the rankings nonetheless). This jives with my perception that, even as these tech companies do increasingly well in developing their own technology, they’re very unlikely in most cases to build the cars, and as such the traditional car companies are still in a position of strength and potential leadership when it comes to actually building and deploying the technology.
via USA Today
Uber Crash Shows Human Traits in Self-Driving Software – Bloomberg (Mar 29, 2017)
I think the headline here would more appropriately read “Uber crash shows bystanders see human traits in self-driving software” because there’s no evidence that the car actually gunned a light turning yellow in this case, but that’s how witnesses perceived it. (I joked on Twitter earlier that perhaps Uber’s autonomy software had been taught the company’s values, one of which is “always be hustlin'”.) The reality is that self-driving cars are often taught to emulate human behavior rather than driving in some idealized perfect way, because that’s what makes human passengers feel comfortable and ultimately trust the technology. But I very much doubt that Uber’s cars are taught to accelerate through lights in the process of turning yellow or red. It appears that police concluded Uber’s technology was not at fault in this crash, and after a brief break over the weekend, its cars are back on the roads in the various cities where they’re operating. But given Uber’s failure rates relative to Waymo’s, and the fact that Uber cars are carrying paying customers, there’s certainly potential for a lot more crashes, some of them actually Uber’s fault.
via Bloomberg
Lyft tests Shuttle, a commuter service that’s basically a bus – Mashable (Mar 29, 2017)
Though I think we tend to think of services like Uber and Lyft as disrupting the status quo in transportation, it’s sometimes amusing to watch them instead recreate existing models, as in this case, where Lyft appears to be creating what’s essentially a bus service. Now, it’s still different in that it’s not tied to set routes, the drivers aren’t professionals or employed by any municipality as most bus services are, and the pricing is unpredictable, so there may be both pros and cons to this approach. But the more adoption of ride sharing services grows, the more they’re going to emulate existing modes of mass transportation like buses, because those continue to be the most efficient and cost effective ways to get people from A to B, especially during commuting times. Whether they end up being better than traditional mass transit in the same way as the original ride sharing services were better than traditional taxis remains to be seen.
via Mashable
China’s Tencent Buys 5% Stake in Tesla – WSJ (Mar 28, 2017)
Tencent has been one of the most active Chinese investors in the US tech industry, and here’s another investment. It already has stakes in both Uber and Lyft, and although Baidu has been making bigger direct investments in autonomous driving in the US, Tencent’s indirect investments in transportation in the US are growing. This is a nice vote of confidence in Tesla at a time when it’s trying to raise money to fund the Model 3 manufacturing ramp, and it also gives Tencent decent exposure to what has been a nice growth stock so far this year.
via WSJ
Microsoft Licenses Patents to Toyota In Bid For Bigger Car-Tech Role – WSJ (Mar 23, 2017)
What’s interesting here is that Microsoft is licensing patents rather than selling technology to Toyota – in other words, Toyota gets the right to use ideas patented by Microsoft, but not products or services built on top of them. That suggests that, while Microsoft has an impressive patent portfolio, it hasn’t necessarily built with those patents technology carmakers consider valuable. And that remains a big challenge for Microsoft in the connected car space – Windows and related technologies have been used in cars in the past, and Azure is being used as a cloud service behind some connected car services today, but Microsoft continues to struggle to build technologies carmakers actually want to use in cars, while other players continue to make headway in the space. I could certainly see Microsoft doing more deals like this – indeed, it describes this as a first for a new auto licensing program – but that doesn’t mean Microsoft is any closer to a stronger role in in-car technology.
via WSJ
Uber’s autonomous cars drove 20,354 miles and had to be taken over at every mile, according to documents – Recode (Mar 16, 2017)
One of the great things about autonomous driving technology is that regulators require companies to keep track of how those cars are performing, and in the case of California that data is published annually, providing a great insight into how each company’s technology is advancing. However, occasionally, internal documents on testing emerge that provide lots of detail too, and such documents have apparently been leaked to Recode (and BuzzFeed). There’s lots of interesting data here, and it suggests progress is being made and Uber is driving lots of miles in its various cars. It’s worth comparing some of the numbers here for Uber with those reported by other companies in California by way of putting them in context: Uber says its rate of disengagements per mile is 0.8, for example, whereas Waymo’s cars in California are now at a rate of 0.2 per 1000 miles, or some 4,000 times better. Now, Waymo’s cars have been driving in the state for much longer than Uber’s, but that’s still a massive discrepancy in performance. And it’s also worse than Tesla’s rate of 182 disengagements over 550 miles driven in 2016. So it appears Uber has a long way still to go in autonomous driving, and it’s therefore remarkable that it’s already using these cars to ferry real passengers around Pittsburgh.
via Recode
Uber says trade theft case is between Otto chief and Google – USA Today (Mar 16, 2017)
This feels like something of a slime ball move on Uber’s part on two fronts: firstly, trying to move the court case with Waymo out of open court and behind closed doors; and secondly, essentially trying to push the case off its back and onto Levandowski’s. I had said previously that the course was going to be fascinating for the details it would provide about how Uber developed technologies and how it would defend against what look like fairly solid allegations, but if it gets its wish here we won’t get to see any of that. But I think it’s the attempt to make this a case about an employee rather than the company that seems particularly sleazy – if the allegations are indeed true, then Uber and not Levandowski benefited the most, and making this seem like a dispute between an employee and former employer feels like a total misrepresentation.
via USA Today
Nvidia Partners with Bosch and Truck Maker Around Autonomy (Mar 16, 2017)
Here are two partnership announcements from Nvidia, the first a deal with automotive component maker Bosch to incorporate Nvidia chips in self-driving solutions, and the second with truck maker PACCAR for self-driving truck technology. Nvidia continues to be one of the biggest names in autonomous driving, and certainly one of the most successful chip vendors (hence Intel’s Mobileye deal). These deals come on top of lots of existing ones, but trucks are a particularly interesting area – it feels like that’s a segment of the market that could actually see real-world adoption of autonomy much sooner than cars.
via The Verge (Bosch) and Techcrunch (trucks)
Musk Goes Back to Wall Street to Bring the Model 3 to Market – Bloomberg (Mar 15, 2017)
I think it’s safe to say that Tesla’s plans for Model 3 manufacturing represent the biggest test the company and Elon Musk have faced by a long way. The ramp contemplated is so rapid and takes the company so far beyond its historical production rate that it seems almost impossible for it to meet its targets. And yet here it is raising more money to fund what’s going to be a massive capital spend in the first half of the year to prepare for that production run that’s scheduled to begin in July. In the first half of last year, the company spent around half a billion dollars on capex, and it plans to spend $2-2.5 billion in the first half of 2017, which gives some sense of just how big the leap is from anything the company has done in the past. That’s going to cause a massive cash drain, hence the new funding. Musk continues to execute extremely well on his long-term plans eventually, but hitting short-term targets continues to be his big weakness, and it feels like the Model 3 is either going to be the worst example of that flaw or the biggest possible exception to the pattern. I’m betting it’s the former.
via Bloomberg
Key Sensor for Self-Driving Cars is in Short Supply — The Information (Mar 13, 2017)
For all the hyberbolic references to monopolies that sometimes afflict the tech industry, here’s a case where one company really does have what appears to be a monopoly, and on a critical component for autonomous vehicles: LIDAR. LIDAR is the same visual radar technology at the heart of the Waymo-Uber lawsuit, because they’re two of only a very small number of companies currently attempting to make their own, while everyone else buys them from Velodyne at $30-40,000 a pop. The global market for LIDAR is currently in the thousands, and the company expects to ship around ten thousand this year, but it and others would obviously have to ramp to tens of millions a year to supply the global automotive industry in the longer term. And those prices will come down massively – Waymo has supposedly reduced the cost dramatically for its own units.
via The Information
Self-driving car numbers double on California roads – Financial Times (Mar 9, 2017)
California and Michigan have to be the two states where the most testing of autonomous vehicle technology is being done, with the former home to most of the tech companies in the space and the latter the home of several legacy automakers. The FT is here citing data from the California DMV, which you can see in its raw form here. What’s fascinating is the mix of companies here, as I’ve said before – there are several traditional carmakers (VW, Mercedes, Nissan, BMW, Honda, Ford, and Subaru), several big names from the tech world (Waymo, Tesla, Uber, Baidu, Faraday Future, and Cruise [now part of GM]), and a variety of other smaller companies. But Waymo has by far the largest number of cars and miles driven (and most accidents). But the California DMV is certainly the source of some of the most interesting data on self-driving testing anywhere in the world right now.
via Financial Times
This Insurance Startup Wants to Cover Tomorrow’s Self-Driving Cars – Backchannel (Mar 9, 2017)
Pay-as-you-drive insurance isn’t a brand new concept – indeed, I remember a colleague writing a report on this about five years ago when I was at Ovum. The basic concept is that the insurance company finds a way to measure actual driving behavior and then offers lower rates to those drivers who drive most safely. There are a number of pilots and active programs underway already, and this Tesla program just takes it a step further by focusing on drivers who turn on the Autopilot feature. Outside of this program, Root measures actual driving behavior through an app, but with Autopilot-enabled Teslas, there’s apparently no such hurdle to overcome. That’s great validation for Tesla (especially given the recent worries over its latest software), and also for autonomous driving technology as a whole – a key argument made by essentially all of its proponents is that it will be safer than human drivers. I’ll be curious to see if this program eventually gets expanded to cover other ADAS systems (since Autopilot is technically ADAS rather than autonomous technology), and whether Root’s data backs up Tesla’s claims about safety over time.
via Backchannel
Twitter’s former head engineer Alex Roetter lands at Larry Page’s flying car startup Kitty Hawk – Business Insider (Mar 7, 2017)
The details of this story aren’t all that interesting unless flying cars are a particular obsession. What’s most interesting here is actually that Larry Page is now doing in separate (often secretive) entities things which in the past might well have been done by divisions of Google. I’ve often said that a lot of what now sits in the Other Bets segment at Alphabet began life as a twinkle in Larry or Sergey’s eye, or as a passion project of sorts, and that’s always struck me as a rather inappropriate use of shareholders’ money. So, it’s interesting to see that not only is Alphabet paring back the Other Bets and exercising greater financial discipline around them in general, but the Google founders are also starting to make those bets with their own money. Both feel like progress.
via Business Insider
Self-driving cars are watching us and recording our data whether or not we’re watching the road — Quartz (Mar 7, 2017)
This article is part good reporting, part opinion, and comes with a clear point of view (which I’d articulate as “carmakers are collecting too much data on us and our driving behavior with insufficient transparency and opt-outs”). But the reporting is well worth reading whether or not you agree with that point of view: the piece does a good job of spelling out all the data that’s being collected by various automakers old and new, and what it’s being used for. And indeed, this data is critical for developing both ADAS and autonomous driving systems, because it’s only by measuring real-world human driver behavior at massive scale that cars can be taught both how to drive like human beings (which is important for trust and comfort) and how to drive better than human beings (which is important for safety). The legacy carmakers obviously have a big advantage here because they have many more cars on the road and hitting the road each year than newcomers like Tesla, let alone non-carmakers like Uber and Google. But it’s how that data is collected and used that makes all the difference here – putting advanced sensors in cars is critical to getting the rich data needed, but it also raises big privacy concerns which I suspect we’re going to hear a lot more about in the coming years.
via Quartz
Tesla Drivers Are Paying Big Bucks to Test Flawed Self-Driving Software – Backchannel (Mar 7, 2017)
It’s impossible to imagine any major car manufacturer putting out an ADAS system or autonomous driving technology that was as unready (and as apparently unsafe) as Tesla’s Autopilot software currently appears to be – it would be catastrophic for their brands and reputations. That’s probably the single biggest difference between Tesla and the major legacy automakers at this point, and it’s simultaneously what allows Tesla to move so much faster and what may end up causing major image, safety, and regulatory problems for the company as well. Moving fast and breaking things may be a fine motto for a social network, but it’s clearly not the right approach for a car. The very fact that the current feature set is said to be in beta feels like completely the wrong model for this environment. Tesla seems to be being helped by the fact that many of its drivers are early adopter types and eager to test even technology that isn’t completely ready, but I’m guessing they will feel differently if they or family members are hurt or killed in an accident because of this faulty steering and other erratic behavior. Tesla really ought to pull these updates and roll cars back to previous versions until it fixes the problems.
via Backchannel
Toyota’s billion-dollar AI research center has a new self-driving car – The Verge (Mar 6, 2017)
Toyota’s approach to autonomous driving strikes me as exactly the right one – as this article briefly explains, it’s approaching the problem from two different perspectives, one of which is about improving existing ADAS systems within the cars we’re driving today and in the near future, with the other being focused on Level 4 and 5 autonomy. I continue to be very skeptical that any car company is going to work its way incrementally and smoothly through the levels from 2 to 3 to 4, and believe much more strongly that we’re going to see a Big Bang shift from Level 2 to Level 4, which means that transition is likely to take quite some time. That doesn’t mean things like cruise control, self parking and so on aren’t going to get a lot smarter in the meantime, and that’s a good thing, but it does mean that true autonomy is both a long way away and likely to arrive all at once rather than incrementally. And of course because companies like Toyota have tens of millions of cars on the road already, they’re able to capture lots of data that will help with both the incremental ADAS and eventually autonomous technologies.
via The Verge
General Motors’ Maven launches monthly car plan – VentureBeat (Mar 3, 2017)
I’ve argued that the big car companies are actually participating pretty actively in the three big shifts occurring in their industry at this point, rather than just sitting idly by, and GM’s Maven business is a good example of some of that engagement, albeit on a fairly small scale. This new model doesn’t seem all that compelling – at over $1000 per month (including insurance, gas, and parking) it’s a little steep for a month’s Volt rental, which would cost you a fraction of that on a longer-term basis. But at least the company is experimenting. Other Maven services are a lot more interesting, and I had an interesting conversation with some of the team at the Detroit Auto Show in January. Maven Home is designed for high-end apartment complexes, for example, where owners get access to cars on an on-demand basis through their building, and GM is also doing interesting things with both Uber and Lyft separately.
via VentureBeat
GM First to Offer Unlimited Data Option for Car Owners – DSLReports (Mar 3, 2017)
This is an interesting but not altogether unexpected step. There’s an analogy here to Amazon’s discounted Echo-only music service, which takes advantage of the same limitations to offer a lower price for something that would normally cost more. GM is now offering $20 for unlimited data, which is the same as it used to charge for 2GB of in-car WiFi data. AT&T continues to sell in-car connectivity to carmakers at a rapid rate – about a million subs per quarter – but these subs are mostly extremely basic at the outset, covering just in-car telematics for a few dollars a month. Only if subscribers actually start buying the additional features such as OnStar and this kind of in-car WiFi does AT&T start to generate a more meaningful revenue per user, so being more aggressive about the pricing, especially as AT&T reintroduces unlimited plans for its own services, makes a lot of sense. And of course since GM gets a cut, it’s strongly incentivized to sell these services too.
via DSLReports
Tesla Reports Q4 2016 Financial Results (Feb 22, 2017)
The last in our trio of financial results today comes from Tesla. This Wall Street Journal piece from this morning does a great job highlighting some of the investor enthusiasm about Tesla in the face of its continued failure to hit expectations and deliver on its own production and other promises. In the end, today’s results were a mixed bag – both production and deliveries in Q4 were down slightly on Q3 but well up on Q4 last year, revenue was up almost double year on year, and the Solar City business looks to be breaking even on gross margin. But overall, the company had big net losses, ate massive amounts of cash in the quarter, and continues to be a long way from its production targets for the Model 3 which is supposed to start shipping in July. It’s also about to embark on a huge increase in battery production, with three additional Gigafactories being planned for construction starting later this year. Meanwhile, the company’s valuation is now ahead of Nissan’s, despite producing losses and massively fewer cars – the power of trajectory and belief in a disruptive business model.
via Tesla (PDF)