The Sun is Shining, The Ride is Autonomous
December 24, 2023
This week in the autonomy economy, The Road to Autonomy Index returned 0.71%, May Mobility announced fully autonomous operations in Sun City, Arizona, Waymo released a report documenting the performance of the Waymo Driver and the U.S. Military continues to invest in autonomous technologies.
As we prepare for 2024 and the uncertainty that comes with turning the page to a new year, the autonomy economy continues to show strength. Even as the global economy is brimming with uncertainties around inflation, employment, recessions and rate cuts.
On March 13th, The DARPA Grand Challenge turns 20. Twenty years ago in a desert on the outskirts of Barstow, California the seeds of the autonomy economy were planted.
To quote Bruce Springsteen, “you can’t start a fire without a spark” and that’s exactly what The DARPA Grand Challenge did. We collectively took that spark and made it into a fire. Now over the next twenty years, we are going to make it an economy — the autonomy economy.
May Mobility investor, Toyota Motor Corp and Alphabet are The Road to Autonomy Index component companies
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What’s Moving the Markets
The Sun is Shining, The Ride is Autonomous
On December 18th, May Mobility announced rider-only operations in Sun City, Arizona, a master planned community. This is a major milestone for May Mobility as they continue to build a business that is focused on complementing transit and enhancing mobility options in regions such as Grand Rapids, Minnesota, Ann Arbor, Michigan, Arlington, Texas and Sun City, Arizona.
With the expansion to into master planned communities, May Mobility is taking a page out of the Voyage playbook. Voyage in our opinion had one of the best early business models for operating a profitable robo-taxi service with their The Villages contract and deployment.
When Voyage was acquired by Cruise on March 15, 2021, The Villages business was shutdown and the contract with The Villages was nullified as part of the acquisition.
Could May Mobility look to possibly build upon their Sun City deployment and expand to The Villages? It’s possible as Co-Founder & CEO Edwin Olson has a strong focus on building a sustainable business that generates free-cash flow.
Edwin recently joined Grayson Brulte on The Road to Autonomy podcast where they discussed May Mobility’s business and why Edwin believes that May Mobility will win. The episode will be released on Tuesday, January 16th.
The business case for May Mobility to expand to The Villages is simply too strong to ignore. The Villages spanning 32 square miles comprised of 145,000 residents, with a median age of 72.7 and financial resources. In fact 39% of residents have a net-worth of $1 million or greater.
EvrISI Take – big steps from when we first met May (thank you Reilly / Trucks VC) in Menlo way back in ’18 where they highlighted full AV as a “later” objective.
EVERCORE ISI – First Look, December 20, 2023
Indeed going rider-only was a big step for May Mobility.
Our take: The economics of May Mobility’s business model might just proven right, if May can continue to scale, grow revenue and eventually have that revenue translate into free-cash flow in the back half of this decade.
May Mobility investor, Toyota Motor Corp is a The Road to Autonomy Index component company
U.S. Army Continues to Invest in Autonomy
The U.S. Army and the Defense Innovation Unit continues to invest in autonomy as a way to reduce potential harm to soldiers on the battlefield.
On December 14th, the U.S. Army announced that Neya Systems, Robotic Research and Carnegie Robotics were awarded a $14.8 million contract to develop and test heavy-duty vehicles capable of independently navigating rugged terrain and restocking soldiers in the field.
Commercial industry has revolutionized autonomous vehicle technology over the past 5-10 years. Incorporating these sophisticated systems into military contexts not only bolsters our tactical strengths but also paves the way for innovative strategies and operational efficiencies that save lives, reduce cognitive burdens, and free up Soldiers to execute more complex missions.
– Major Will Ryan, Autonomy Project Manager at the Defense Innovation
Interested in learning more about RRAI’s defense business? Listen to our conversation with Gabe Sganga, Head of Commercial Growth on The Road to Autonomy podcast.
Robots Do Not Bleed, Autonomy for Defense (October 17, 2023)
Our take: It’s all coming full circle. Autonomy for ground vehicles was born 20 years ago as part of The DARPA Grand Challenge and now it’s being used to increase the U.S. Army’s tactical strengths.
DeepSea Autonomy
On December 20th, Boeing announced that they delivered the first Orca underwater autonomous submarine to the U.S. Navy having the capability to change underwater warfare creating an entirely new industry.
This is the culmination of more than a decade of pioneering work, developing a long-range, fully autonomous undersea vehicle with a large payload capacity that can operate completely independently of a host vehicle.
– Ann Stevens, Boeing Maritime and Intelligence Systems Vice President
Our take: Autonomy comes in all shapes and sizes. The opportunity to deploy autonomous solutions in the maritime industry is in its infancy. If the global pirate industry that preys on the shipping industry has taught us anything, it’s that autonomy solves a real problem in maritime. No more holding crews hostage for a ransom. No crew, no ransom.
Going Down The Tracks Autonomously
On December 20th, Parallel Systems successfully demonstrated their automated platooning operations for the first time. Parallel’s approach to autonomy is unique and one that has a lot of financial upside as the market for autonomous rail freight has yet to fully develop and mature.
Matt Soule, CEO and Co-Founder, Parallel Systems has joined us on The Road to Autonomy podcast several times over the years. If you are interested in learning more about their approach to autonomy and what the business model is, we would recommend listening to one the following episodes:
- Rail Industry: On the Rails of Economic Growth (October 31, 2023)
- Electric, Autonomous Freight Rail (January 24, 2023)
Our take: Parallel Systems has the ability to disrupt the truck freight market by shifting a percentage of that freight to rail. We view Parallel Systems as complimenting the traditional freight rail industry. Question for 2024; What Class-1 Railroad publicly announces a partnership with Parallel Systems?
Social Buzz
Better Than a Human Driver
On December 13th, Waymo (Alphabet) published two papers that clearly demonstrate that the Waymo Driver is safer than a human driver. An 85% reduction in injury-causing crash rates and a 59% reduction in police-reported crash rates as compared to a human driver.
On an episode of The Road to Autonomy podcast, Francesca Favarò, Safety Best Practices Lead joined us to discuss Waymo’s layered approach to safety.
Waymo’s Layered Approach to Safety (October 25, 2022)
Our take: Waymo is the clear leader in autonomous vehicle market and their approach towards transparency and safety will only enhance that lead as it builds trust with the public, regulators and policymakers.
Alphabet is a The Road to Autonomy Index component company
Autonomous Vehicles Generative AI Moment?
Wayve ($250 million raised to date) is an ambitious company with a goal of being the first company to deploy autonomous vehicles in over 100 cities around the world. Wayve CEO Alex Kendall believes that Wayve can achieve this because of what Mr. Kendall calls their AV 2.0 — an AI approach to self-driving using large language models (LLMs).
Self-driving is an AI problem. That hasn’t been the consensus view. In fact it’s been the contrarian view for many years. Everything has changed this year owing to ChatGPT. When we founded Wayve the thesis we had was the rules and mapping-based approaches of the autonomous vehicles in operation today wouldn’t let this tech scale. In order to bring it to everyone anywhere you need a system that has onboard intelligence to understand and make its own decisions.
– Alex Kendall, CEO, Wayve at Bank of America’s Transforming World 2023 : The Future is Now, December 6, 2023
To capitalize on this approach to autonomous driving, Wayve is going to purse a licensing model for their technology that can be deployed on any compute platform.
Our take: It will be interesting to watch as Wayve scales and how their ability to scale and develop their LLM approach compares to that of Waabi. Another company taking an AI first approach to autonomous driving.
Wayve investor, Microsoft is a The Road to Autonomy Index component company
Kodiak’s Growing Diversified Business
Kodiak has come a long way since the company was founded in 2018. From a pure-play autonomous trucking company to a diversified business with a defense unit, Kodiak is clearly preparing for the next step and Wall Street is taking notice.
Autonomous isn’t the future, it’s here today. Kodiak runs the largest autonomous freight network in the world at about 18,000 miles (1/5th of US Interstate System). The company has logged 3 million miles and runs 65,000/miles and 200 loads a month across the US interstate system (I10, I20 and I40) with no at-fault accidents to date. Kodiak will conduct its first fully autonomous freight runs in 2024, where it will remove the safety driver from the truck
Bank of America Research – STAARS 2023: by Land, Sea, Air & Space – The Future is Now report, December 14, 2023
Operating the largest autonomous freight network in the world is an impressive feat. One that is even more impressive when you factor in the ability to grow profitable revenue when fully autonomous freight operations are achieved. Fully autonomous freight operations at scale has the potential to reduce overall operational costs by 30% – 40%.
Then there are Kodiak’s proprietary sensor pods which could become an entire business into themselves as they are highly scalable and relatively easy to maintain.
Kodiak’ s adaptability and mapping are key differentiators in scaling. Kodiak’s modular design and patented sensor pods were purposely built to be added to any OEM platform and vehicle type, serving as a unique differentiator among autonomous trucking developers.
Components can be removed or replaced in 10 minutes, providing advantages in maintenance. Kodiak’s mapping technology allows it to scale and add new lanes faster than peer methods, both by leveraging public routing networks and its immediate vicinity sensors (lidar/radar/high resolution cameras).
Bank of America Research – STAARS 2023: by Land, Sea, Air & Space – The Future is Now report, December 14, 2023
Listen to Kodiak Founder & CEO Don Burnette discuss building an autonomous trucking business on The Road to Autonomy podcast.
Building an Autonomous Trucking Business (March 14, 2023)
Our take: A diversified approach to revenue is the right approach. In the future, Kodiak could license their sensor pods creating yet another revenue stream.
The Road to Autonomy Index® / Weekly Performance
The Road to Autonomy Index® is a high-definition lens into the emerging world of autonomous vehicles. It is the world’s first and only pure-play index designed to measure the performance of the autonomous vehicle/truck market.
For the week of December 18, 2023, The Road to Autonomy Index returned 0.71%, the S&P 500 returned 0.43% and the NASDAQ 100 returned 0.63%.
The Road to Autonomy Index outperformed by the S&P 500 by 0.28% and outperformed the Nasdaq 100 by 0.08%.
The top performing stocks in The Road to Autonomy Index this week were:
- Alphabet returned 6.70%
- Micron Technology returned 6.24%
- Ryder System returned 5.78%
Follow The Road to Autonomy Index on Google Finance
The Road to Autonomy Index Component Companies
Latest The Road to Autonomy Podcasts
The Road to Autonomy podcast hosted by Grayson Brulte is a podcast featuring unconventional conversations about the future of mobility and the emerging autonomy economy. New episodes every Tuesday.
What if we Electrified the Trailer?
Ali Javidan, Founder & CEO, Range Energy joined The Road to Autonomy podcast to discuss electrified trailers and the impact that these trailers will have on truck fleets.
Listen on The Road to Autonomy | Apple Podcasts | Spotify
Tuesday, December 19, 2023
Future of In-Car Experiences
Jana Breitkopf, Managing Director, Mercedes pay USA recently joined The Road to Autonomy podcast where she discussed how Mercedes pay is enabling the future of in-car experiences.
Listen on The Road to Autonomy | Apple Podcasts | Spotify
Thursday, December 14, 2023
Uber Freight: $18 Billion of Freight Under Management and Growing
Olivia Hu, Head of Autonomous Trucking, Uber Freight recently joined The Road to Autonomy podcast where she discussed how autonomous trucking is going to complement and accelerate the growth of Uber Freight’s $18 billion of freight under management platform.
Listen on The Road to Autonomy | Apple Podcasts | Spotify
Tuesday, December 5, 2023
Uber is a The Road to Autonomy Index component company
Subscribe to This Week in The Autonomy Economy™
A weekly newsletter featuring insight and analysis on the autonomy economy™ and how the financial markets are viewing its emergence.
All price references and market forecasts are as of the date that this newsletter has been sent. The Road to Autonomy is not providing any financial, economic, legal, accounting, or tax advice or recommendations in this newsletter. The information contained in this newsletter does not constitute investment advice and should not be relied upon to evaluate any potential transaction.
Inclusion of a security within The Road to Autonomy Index® is not a recommendation by The Road to Autonomy Indices LLC to buy, sell, or hold such security, nor is it considered to be investment advice.
