Mar. 2022 is a busy month of Self-Driving capital games. A few $B are changing hands, and the mid. game of Self-Driving consumer adoption unfolds. Which is hitting what the beginning of the end can be.
Self-Driving capital reload
This spring seems to be a great time for cashing out from Self-Driving. A new chapter of Self-Driving is unfolding because a venture capital has a better appetite on risk than a “bank loan officer”.
- On Mar. 7, Intel filed an IPO for Mobileye. Intel acquired Mobileye for $15B in 2017 and now may exit with a $50B valuation. [Reuters]
- On Mar. 18, SoftBank cashed out $2.1B from its Cruise $900M investment in 2018. Cruise is fully under GM’s will.[Robotics247]
- On Mar. 17, TuSimple is looking to sell its China business for $1B to reduce regulatory risk & focus on the U.S. market. Two top regions of SD are on their separated ways. [Reuters]
So what? tl;dr each type of capital has its expectation on return of capital. Which will guide a venture toward certain choices. So, founders choose wisely on who’s money to take 😉.
Waterfall — the same old love
To be fair, carmakers have been making good progress on self-driving. Arguably, some of them even “beat” Tesla by getting their Level 3 self-driving approved. Whereas, Tesla FSD is still “Level 2”.
- On Mar. 5, 2021, Honda announced the leasing plan in Japan of Honda Legend EX with its SENSING Elite, a Level 3 self-driving system. [Reuters]
- In the first half of 2022, Mercedes-Benz customers may buy an S-Class with DRIVE PILOT, a Level 3 system/conditionally automated mode on suitable motorways in Germany in heavy traffic at a speed under 60 km/h (37 ml/h). [Mercedes-Benz]
- BMW plans to launch a Level 3 in the second half of 2022 powered by Mobileye. In the meanwhile, BMW, Qualcomm & Arriver are working on a new system. Which should be ready in 2025. [Forbes]
They may be good achievements. But, there is a fundamental problem: carmakers still treat Self-Driving as a fixed feature to sell cars. Just like the cruise control feature, carmakers may take ~2 years to develop & test a new model & features. Before the launch of the new model, the development is properly done & validated. This is fine for a well-defined feature & working in predictable environments. Only, self-driving is much more complicated, and the real world is very dynamic.
Iterate fast at scale — the only path to success
From late 2020, Tesla has been building FSD capability & adaptivity by frequent SW updates. FSD beta users grows from ~2k in Mar. 2021 to 60k in Q4 2021. Tesla Safety Score is a criterion to qualify beta users, which reduces the risk & encourages good driving behaviors. Will Tesla FSD be safer than human drivers in 2022? The answer may still be debatable later. But, Tesla is pretty ahead of others a few years. So, if Apple Cars will hit the road in 2025, Apple needs to put a new dream team together soon. Only, Tesla will not standstill.
Full Disclosure
The opinions stated here are my own, not those of my company. They are mostly extrapolations from public information. I don’t have insider knowledge of those companies, nor a whatever expert.
