Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.

Tag: autonomous vehicles

  • The Derek Zoolander autonomous vehicle problem

    According to McKinsey, something like $100 billion has been invested in trying to get autonomous vehicles to work and yet the industry remains stuck with problems like this one here:

    State-of-the-art robot cars also struggle with construction, animals, traffic cones, crossing guards, and what the industry calls “unprotected left turns,” which most of us would call “left turns.”

    The industry says its Derek Zoolander problem applies only to lefts that require navigating oncoming traffic. (Great.) It’s devoted enormous resources to figuring out left turns, but the work continues.

    Right now certainly feels like an autonomous vehicle winter (we have many winters going on at the moment). The industry has spent a lot of time and money getting maybe 90% of the way there, but this last bit has proven to be a lot more challenging than I think most people anticipated.

    This has a lot of people thinking that it’s going to be many decades before we finally get full autonomy (if ever) and that, in the interim, all we will have are very specific use cases: trucks on highways, mining machines (the above article writes about this), and so on.

    This may very well be the case. Frankly, I don’t know. But it’s perhaps important to remember two things: (1) pessimists aren’t usually the ones who change the world and (2) there is something known as the Gartner hype cycle, which is a graphical representation of how new innovations typically get adopted.

    The Gartner hype cycle has five phases. The important ones for this discussion are the first three. First there is a technology trigger. Second there is an inflation of expectations (until it hits a peak). And then third, there is a trough of disillusionment. This is the moment where interest wanes and people begin to think it’ll never happen (until it does happen).

    That might be what we’re living through right now, or it might not be. But my gut tells me that it’s the former.

  • Autonomous trucks are coming

    I hate driving. So I’m looking forward to the day when autonomous vehicles will be able to take me where I need to go, such as out for a late-night poutine.

    But as we all know, autonomy has proven to be a trickier problem to solve than most people initially anticipated. Though I do believe that we’re getting there, especially for certain use cases.

    The WSJ recently published an interesting article talking about why autonomy is likely to reach the trucking industry well before it reaches general consumers. And that feels right to me:

    Here’s the promise of robot trucks: While full self-driving in all conditions is still a pipe dream, engineers seem to be close to achieving it in limited circumstances, such as on highways on clear days. And highway driving, in good weather, happens to be exactly the context in which long-haul trucks operate for a substantial portion of the time.

    The article also gets into some of the economic benefits of figuring this all out:

    Adding even $20,000 of hardware, in the form of additional sensors and powerful computers, to a long-haul truck is quickly offset by the elimination of labor costs, which typically represent 15% to 20% of the cost of operating a truck. Another big economic impact is that by law a human driving a truck must stop and rest. That means every truck, which can cost between $100,000 and $200,000, is only being used about 30% to 40% of the time. Just running them 24 hours, stopping only for fuel and maintenance, increases their utilization by a factor of two or more.

    For the full article, click here (paywall).

  • San Francisco now has autonomous vehicle taxis

    These are two short videos of autonomous Cruise vehicles driving around San Francisco. Cruise, which is owned by General Motors, received a permit from the state of California to operate autonomous vehicles — without a safety driver — in September of last year. In November 2021, one of the cofounders of Cruise took the first ever driverless taxi ride in the company’s history. And on February 1, 2022, Cruise announced that it was opening up to the public.

    If you read the comments on Twitter you’ll see that some people have found these vehicles to be hyper reactive to traffic lights and to do oddly long pauses at stop signs. So I guess they’re not perfect. But oddly long pauses are certainly better than not stopping at all. Either way, this is a big deal. I’m not sure if these are the first unsupervised autonomous vehicles out in the wild, but they are easily some of the first.

    There has been a lot of discussion over the last few years about autonomy being a hugely tricky technical problem to solve. One that is perhaps more difficult than a lot of people thought it would be at the outset. I’m assuming that this is at least one of the reasons why ridesharing companies like Uber and Lyft ended up selling off their AV divisions while searching for profitability.

    But the market never gave up and it’s pretty exciting to see this coming to fruition. Oliver Cameron is VP, Product at Cruise and the former CEO of Voyage (which was acquired by Cruise last year). If his tweets (above) are any indication, San Francisco is going to be seeing many more autonomous vehicles in the coming months.

    This is going to have a profound impact on the unit economics for ride sharing companies like Uber, but more importantly it is likely to have a profound impact on our cities. Mobility innovations have a way of doing that. Some of the impacts might be negative, but I believe that many of the impacts can and will be positive.

    As most of you will know, I am a believer in dense and walkable cities. I do not believe in planning cities around cars. And so that is not what I am advocating for here. My view is simply that I think autonomy grants us the ability to rethink our definition of a “vehicle.” And maybe it becomes something that more closely resembles public transit. That could be a positive thing for our cities and something that draws people away from private vehicle ownership.

    So I remain both optimistic and excited about what’s to come.

    Have any of you had a chance to ride in an autonomous vehicle? If so, leave a comment below or on Twitter.

  • The century of gasoline vehicles is coming to an end

    Chrysler announced last week that it will become an all-electric vehicle company by 2028. This is a pretty big deal and, as I understand it, a first for the legacy US automakers. At this point, it now feels difficult to argue that this shift isn’t going to happen. Though I remember lots of people in the past asserting that the masses would never ever switch over to electric.

    I guess that’s the status quo bias at work. Because if you flip the script and assume that the status quo is already electric (that is, we all come home after work, plug in our cars, and charge them up at low rates), it would be pretty hard to argue for a switch to gasoline-powered cars. Here, try this new thing. It’ll cost you more to fill up and you get to pollute the environment more. But hey, it sounds cool when you do a cold start.

    Do we have Tesla to thank for exposing this?

    Here’s some further evidence from the Exponential View.

    In the UK last month (December 2021), 41% of new car registrations were electric or some kind of plug-in electric hybrid. That is up from 29% for the same period in 2020 (see above). Pure EVs also make up about 2/3 of these registrations and look to be picking up momentum. That’s certainly what I would expect to see when we revisit these numbers next year. The century of gasoline vehicles is coming to an end and it’s going to happen well inside of this decade.

    When I was buying a new car back in 2018, I wanted to buy an electric vehicle. I don’t have a charging station in my parking garage, but I would have gotten one. The problem is that I couldn’t find the kind of car that I wanted in an electric version. And the ones that were available were pretty expensive. That has changed and is no longer the case. If I were buying today, it would certainly be an EV. The car would also have to change colors at the push of a button.

    But, of course, the other element of change here is autonomy. And if/when that arrives, it will be far more disruptive than this shift to electric.

  • Luminar announces vision for autonomous vehicle future

    Luminar Technologies, which is an autonomous vehicle technology company that I have written about before, just hosted its first ever “Studio Day” in New York City this week. And at the event they announced two new technologies.

    The first is called Iris, which is a small lidar device that is intended to be integrated into regular consumer production vehicles — on the roof just above the windshield. And supposedly the company is on track to have these into full production and available to their OEM partners by the end of next year (2022).

    The second technology is something that they are calling Blade, which is a lidar system that can offer a 360 degree field of vision and is intended for use in robo-taxis, trucks, and other consumer vehicles. It’s called Blade because it’s kind of like a blade that wraps around the tops of these vehicles.

    We’ve been talking about autonomous vehicles for what seems like a long time. And it is now clear that this is not an easy problem to solve. But from what I have read, lidar seems like the promising technology and something that will become necessary for full autonomy. So I am now long $LAZR. Whether this is the right move is still to be determined.

    The full Studio Day video is embedded at the top of this post. If you’re reading via email subscription and can’t see it, click here.

    I liked the bit (just after the 9 minute mark) about how headlights were first introduced and how it took some time before they were fully absorbed and integrated into the design of cars. Today they are now a signature design element for most car brands. It’s a clever parallel for what Luminar is trying to do with Iris and Blade.

  • More drivers, more supply

    This week, Lyft announced that it is going to be selling its autonomous vehicle division to Toyota for some $550 million. (Apparently $200 million of this will be paid upfront, with the remaining $350 million paid out over a five year period.) This is notable because Uber did the exact same thing last year when it sold its autonomous vehicle business to Aurora (which happens to be working with Toyota), and because the reasons for selling seem clear: getting to full autonomy is going to cost a bunch more money and both Uber and Lyft are determined to reach profitability sooner rather than later.

    The other thing that you might be able to glean from these announcements is that neither company seemingly feels like they need to fully own/control the autonomous piece. Presumably the thinking is that someone else can spend the money on developing full autonomy and they’ll just stick to building out their ride-hailing network. Once we have autonomous taxis, they’ll need a network to run on anyway, right? I guess. But wouldn’t this dramatically undermine the network effects of Uber and Lyft?

    If you go back to Uber’s S-1, there was a diagram that explained Uber’s “liquidity network effect.” See above. It starts with more drivers and more supply (1), because more cars driving around means that wait times and fares are lower (2) and so more people are likely to use Uber (3). Network size matters. But if you no longer have drivers — only autonomous vehicles — isn’t it relatively easy to add more supply to any network? I suppose this partially depends on how the ownership structure will end up working for these autonomous taxis. Still, I wonder about the barriers to entry under this scenario.

  • The future of self-driving cars (and LIDAR)

    Here is an interesting podcast with Austin Russell, who is CEO of Luminar Technologies. Luminar specializes in LIDAR vision systems for autonomous vehicles and has already cut deals with carmakers such as a Volvo. Starting as early as next year, Volvo hopes to start rolling out “fully autonomous highway driving” using LIDAR. And, supposedly, Luminar makes the best kind of LIDAR with ranges of up to 250m. But not everyone believes that LIDAR will be a necessary component of autonomy going forward. Tesla instead relies on vision (lots of cameras and fancy AI software), and Elon Musk has famously said that anyone relying on LIDAR will ultimately be doomed. Time will tell, though I am in the LIDAR camp because of the recency bias that this podcast has created. And in the interim, Luminar going public at the end of last year has made Austin Russell the youngest self-made billionaire in America.

  • Twelve climate technologies

    This is an excellent blog post by entrepreneur and venture capitalist Vinod Khosla about some of the “instigators” that are working to help solve our climate crisis and some of the areas in which we probably should be focusing on next. One of the things that’s noteworthy about the post is that he distills it all down into 12 areas of focus that — if solved and if scaled — could have a material impact on carbon emissions. They are (verbatim):

    1. Electric vehicles & automotive batteries
    2. Food & agriculture, especially meat
    3. Low carbon transportation: Air transportation (jet fuel), shipping (electrofuels, biofuels?)
    4. Cement or substitute construction material
    5. Low carbon dispatchable electricity generation (fusion, geothermal, nuclear)
    6. Public transit
    7. Grid storage (long duration battery storage)
    8. HVAC
    9. Industrial processes (hydrogen?)
    10. Fertilizer (hydrogen)
    11. Water
    12. Steel

    Looking at this list, it is clear that some of these things are already happening (and some aren’t). I currently own an ICE vehicle, but I’m fairly certain it will be the last non-electric vehicle I ever own. It’s also not clear whether I will want to continue owning a car. Dynamic mass transit and overall autonomy are things that we’ve talked a lot about on this blog.

    But here’s the other idea put forward in Khosla’s post. If these are in fact the 12 most impactful and important categories, then we may only be 12 or so companies away from real solutions. We only be 12 or so entrepreneurs away from meaningful societal change. When you look at it this way, the climate crisis should hopefully feel a lot less daunting.

  • Amazon might be buying Zoox

    This week the FT reported that Amazon is in “advanced talks” to acquire the self-driving startup Zoox. This would be Amazon’s first acquisition in the space, though it did lead a $530M funding round in Aurora in early 2019.

    Zoox last raised two years ago and was valued at $3.2 billion. Rumor has it that its valuation will be less than that today. Some of its investors, according to FT, include Breyer Capital and the Canadian Pension Plan Investment Board.

    The move seems reasonable. Amazon wants to build out its (driverless) logistics capabilities. It’s also in keeping with what we have been seeing from big tech. Companies that can are using this environment to be acquisitive, invest in the future and, hopefully, gain market share. It’s probably also inevitable that the self-driving space will see some consolidation going forward.

    If you go back to this post from earlier this year, Zoox and Aurora weren’t near the top in terms of R&D spending on autonomy. And it has become increasingly clear that this a giant problem/opportunity requiring giant funding capabilities. It’s going to take time.

    I recently heard Chamath Palihapitiya refer to Jeff Bezos as the greatest investor of our time — even more so than Warren Buffet. Why? Because he is consistently, and sometimes exclusively, investing in the future. Is this one of those moments?

  • Who is spending on developing autonomous vehicles

    The Information estimates that around $16 billion has been spent over the last few years on developing autonomous vehicles. This is across some 30 companies. But about half of this spending has come from just three companies: Waymo (Alphabet), Cruise (GM), and Uber.

    Waymo has been working on AVs for about a decade and the industry seems to believe that they are the furthest ahead. Still, the technology is not yet there and their AVs — which are operating in Phoenix — require lots of human supervision.

    The sentiment right now is that self-driving cars are going to take much longer than initially anticipated and many more billions in R&D spending. Last year, Waymo was looking for financing from outside investors. Morgan Stanley said the business was worth about $105 billion.

    Graph: The Information