Waymo Via Shutdown: The End of the Universal Driver?
The conversation begins with Chuck sharing his thoughts on the current state of the autonomous trucking industry.
We are going through change. What we’re seeing is the early phase of this development which was largely science doing science, now moving to doing engineering and commercialization. Some of the companies that have been involved in this thought ahead for that and are prepared and others are struggling or have struggled.
What we are seeing is a consolidation and some changes in strategy that I think are normal and healthy for an industry as complex as this.– Chuck Price
The consolidation currently occurring in the autonomous trucking industry is healthy — the market is functioning properly. On Wednesday, July 26th, Alphabet announced Waymo will be shutting down their autonomous trucking division — Waymo Via. While this may have come as a surprise to many, there were rumors in the market and public statements by Alphabet on earnings calls that laid the foundation for this announcement.
Waymo did the right thing for a lot of reasons.– Chuck Price
By shutting down Waymo Via, Waymo is now going to focus exclusively on their robotaxi business — Waymo One. As Mr. Price stated, this is indeed the right thing for Waymo to do as they are in a head-to-head competition with Cruise. Cruise is a formidable opponent with the resources to compete. Not to mention, Cruise is currently expanding at a much more rapid pace than Waymo. Cruise is in the driver’s seat, while Waymo follows behind.
From a technical perspective, was this an admission by Waymo that the Universal Driver did not work as they expected? Or is this more inancial discipline coming from Waymo as the division will have a new de facto CEO on September 1st — Ruth Porat, President & Chief Investment Officer of Alphabet. In her new role Ms. Porat will be responsible for investments in Alphabet’s “Other Bets”.
To further streamline the business and appease Wall Street, could Ms. Porat look to license the Waymo driver to global OEMs? Or raise additional capital outside by collateralizing Waymo’s IP? Aurora Innovation with 1,450 patents related to autonomy recently raised $820 million in new capital.
I am confident that the formal IP developed by Aurora gave them a huge advantage when they went to raise money, and without that they probably would not have been able to raise.– Chuck Price
Even though Aurora recently raised $820 million in new capital, the company has a cash burn rate of $45.3 million a month. It’s expensive to operate, Aurora. With Waymo signaling that the Universal Driver did not work, Aurora continues ahead with developing their version of the Universal Driver.
Would Aurora be wise to shut down their passenger car business and focus solely on autonomous trucking? This decision would allow Aurora to streamline their business and lower their cash burn rate — the economics point the way forward. But the question remains, what path will Aurora choose as the company matures and grows?
I haven’t seen a Universal Virtual Driver yet, but I have seen focused drivers come to fruition. We’ve seen cars that are now self-driving without safety drivers. We’ve seen trucks that are self-driving without safety drivers. Both have been achieved. The science is done for those specific use cases.– Chuck Price
To scale an autonomous trucking startup, the startup has to have a production relationship with a truck OEM. To achieve this relationship, the autonomous trucking startup will have to commit $50 to $100 million to the relationship.
Wrapping up the conversation, Chuck shares his thoughts on how he sees the autonomous trucking industry evolving over the next five years.
Recorded on Tuesday, August 1, 2023