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There are four waves of innovation sweeping through the automotive industry that will disrupt vehicles more in the next 10 years than they've changed in the last 100.

Each week, we explore connected cars, electrification, changing ownership models, and autonomous self-driving vehicles, as we seek to understand and prepare you for the future of transportation.

Mar 13, 2019

EP001 - Welcome to the Future of Vehicles

http://www.vehicle2.getspiffy.com

Episode 1 is primarily news-focused, with a concrete definition of what we will refer to as the “Vehicle 2.0 framework”; recorded on March 8th, 2019. Scot discusses a variety of topics, including:

  • Defining “connectivity”, “changing ownership models”, “electrification”, and “automation”
  • Several OEMs and even countries have announced plans to move to 100% EV by timeframes like 2025/2030
  • LIDAR and the levels of autonomy
  • Lyft files for an IPO -- read the S1 here -- and what that can mean for the future of vehicle ownership
  • Daimler AG and BMW AG announce jointly-owned car-sharing and ride-hailing business called SHARE NOW
  • China’s leading EV car company in sBYD - just announced they sold 43k in the first 2 months of 2019 - up 175% y/y
  • Waymo continues to lead the autonomous vehicle push, but CEO John Krafcik continues to temper expectations
  • Waymo to start selling LIDAR technology in stand-alone format

If you enjoyed this episode, please write us a review on iTunes!

The four pillars of Vehicle 2.0 are electrification, connectivity, autonomy, and changing ownership models. In the Vehicle 2.0 Podcast, we will look at the future of the auto industry through guest expert interviews, deep dives into specific topics, news coverage, and hot takes with instant analysis on what the latest breaking news means for today and in time to come.

This episode was produced and sound engineered by Jackson Balling, and hosted by Scot Wingo.

 

Transcript:

 

Scot:                               

[01:00] Welcome to the Vehicle 2.0 podcast. This is our first episode and it's being recorded Friday, March 8th, 2019 to kick off the podcast, we're going to catch everyone up on some breaking industry news. But first, we want to take a minute and walk everyone through the vehicle 2.0 framework and some of the terminology that we'll be covering on this podcast in the coming weeks and months and hopefully years. As we talk about future car, there's gonna be a lot of new vocabulary and we will make sure everyone has this reference podcast to go back to so I won't have to cover it every single time.

Scot:

[01:32] Let's kick it off by looking at the vehicle 2.0 framework. There's four pillars to the framework. The first is connectivity. Most new cars are include a connection to the Internet and then also that enables a lot of cool in cabin functionality. And then also interesting conductivity of the car. I don't want to say too much about that because one of our episodes coming up here soon is going to feature the CEO of Smartcar and we're going to talk about that one a lot.

Scot:

[02:00] The second pillar is ownership. Car ownership is changing in dramatic ways. There's a lot of innovative companies. We all are familiar with the ride-sharing companies, Lyft, an Uber. And then we have a lot of new models out there, their subscription models. Uh, there's micro rentals, and a lot of things like that. So some of the companies we'll talk about, our Turo, Fair Getaround, and companies like that. A lot of people are also familiar with Zipcar. The third pillar is electrification or electric vehicles or EVs as we commonly refer to it in the industry. You'll hear another acronym that we hear a lot as we talk about this topic is ICE or internal combustion engines.

Scot:                             

[02:41] We have hybrids, plug-in hybrids. So all those are kind of in this topic of an electrical vehicle. One of the industry trends here is many of the car makers, uh, which we call OEMs, uh, and even countries have announced plans to really get to 100% EV and timeframes like 2025, 20, 30. So it's still early days in the cycle. But as we look at the larger green movement, um, and, and taking care of our environment and climate concerns, EVs are a top topic there. The fourth and final pillar is autonomy or autonomous vehicles or AVs. Uh, it's easy to confuse AVs and EVs. So EVs or electric vehicles AAVs are autonomous right now. None of the AVs are EVs, but down the road, I think we'll have AVs that are EVs. So I say all this. So you guys get used to hearing and saying, Eh, yourselves, this terminology.

Scot:                                

[03:38] A big thing that you'll hear about when we talk about autonomous vehicles is LIDAR and that's essentially, it's like radar with light. Um, so it's a shooting out a beam of light. These vehicles are able to build a 3D map of their environment and use that to navigate. Lidar is an acronym that stands for light detection and ranging. So we're going to be talking a lot on this podcast, not only about autonomous vehicles or AVs, but also LIDAR. Uh, another thing that comes up a lot when you talk about autonomous vehicles is there are several quote unquote levels of autonomy out there. Um, and uh, so this was first proposed, I believe by the Society of automotive engineers and then as now been adopted by the national highway traffic safety admin or the NHTSA. So, so the level started zero and they go up to five.

Scot:                          

[04:30] And I'll just briefly walk you through those levels. Zero is essentially no autonomy. The control, the human, the driver controls everything. Um, including the steering, the brakes, the throttle, the power. Uh, it's what we've been doing all along. You have some assistance from things like cruise control, uh, and now some cars are having light radar, uh, but generally that the human is 100% in control. Level one takes us up with a driver assistance. Uh, and that means most levels are controlled. Most pieces are controlled by the driver, but a specific function, one function like steering or accelerating is down, done automatically by the car. So some of the kind of advanced cruise control systems fall into level one. Then we move up to level two and level two, at least one driver assistance system of both steering and acceleration, uh, is automated. So here the driver is disengaging from physically operating the vehicle and but does not take hands off the steering wheel, hands off the steering wheel or foot off the pedals at the same time.

Scot:                               

[05:34] Level three, you're now, uh, the vehicle is driving and accelerating on its own with a driver, an interruption. So the driver is still engaged and can take over at any time and frequently the vehicle will detect when it's gotten into this situation and say, Hey, I need you to take over. Um, and this is called level three. This is kind of where Tesla is right now. Uh, with their, their autonomous vehicles. They are by far the largest manufacturer out there with this, uh, ab type functionality and they're at level three. Then we step up to level four. And this is called fully autonomous. And, uh, the definition is they're designed to perform all safety-critical driving functions and monitor roadway conditions for an entire trip. Um, this, uh, so this is close to full autonomy that the one layer that's out there is it does allow for very specific domains.

Scot:                              

[06:32] So, for example, if a truck went from a highway from one location to another, maybe in a specified lane, that's level four, because you've put some constraints around that, uh, the constraints being either a lane, a designated lane, or you're on a highway, you're not going, you know, do a complete ride journey. And that's level five. Level five is full autonomy anywhere, any place in the environment, uh, the driver can kind of essentially disengaging a spin around and play cards, uh, whatever, take a nap, uh, et cetera. So, so those are, we'll, we'll probably be referring to those over the life of the podcast and I just wanted to get that definitionally out there. We'll refer back to it here in episode one when appropriate. Uh, another interesting debate we're going to explore on the show is I talked about LIDAR. So some of the more advanced companies, uh, out there, uh, I have obviously used light are the one that seems to be ahead is Waymo and then you have Uber, etc.

Scot:                            

[07:32] Um, and you know, they're definitely kind of full-on having the vehicle build a 3D map of its world and navigate that and understand everything going on. the, uh, the counter-story to that a w which is kind of the minority point is, you know, as humans when we drive, we don't have LIDAR, we essentially have, our eyes are effectively two cameras that are offset to give us a 3D view of the world that we then make a lot of inferences about. And that's how we drive. Um, so this is the system that Tesla uses and a couple of the other vendors out there, uh, are, are using this. Um, so it's going to be interesting to kind of see who wins that debate because obviously if you can use cameras, it's much less expensive and complicated than using LIDARs. So, so, you know, right now the one, you know, I think the Tesla folks would argue they're ahead because they've got many more vehicles out there actually driving a at level three with cameras than the LIDAR guys do.

Scot:                                  

[08:30] So, so that's going to be something we'll talk a lot about on the show. Another area that's interesting, kind of outside of this vehicle 2.0 framework is the lifecycle of the car. So there's a lot of trends, uh, in addition to vehicle two o that, that are also changing how we buy, sell, ensure finance and maintain vehicles. Uh, this is an area near and dear to our hearts here at spiffy because you know, we believe the whole maintenance of part of the lifecycle is, is not optimized for today's consumer. Um, the other day I rarely watch linear TV, but I was watching I think a basketball game and uh, you know, I haven't seen a commercial in a long time and every commercial on TV I was shocked was for Carvana and vroom. Those are two examples of companies that are really turning the auto industry on its head as far as how you buy a vehicle.

Scot:                               

[09:19] So what they're doing is the vehicles coming to you. You have an online shopping like experience. They've gotten rid of the test drive by bringing the vehicle to you and giving you a return policy. So we hope to have in future episodes, uh, several companies in, in analysts looking at this part of the market as well. So the goal of this podcast is really to take you, the listener on a journey with us because we're learning a lot about this as well. And we want to explore this vehicle to a framework. Um, we want to understand what's going on, when did the best minds in the industry think it's going to happen, uh, and then how are these changing ownership models, uh, and the way that you, you buy, sell and maintain and insure cars. How is all that adding up and what's it mean for the future of automobiles?

Scot:                           

[10:06] So with all that foundational kind of definitions and, and the frameworks in place, let's pivot and look at some of the big news items that have come out so far this year. Uh, I think the biggest news item, uh, to come out this year so far and the vehicle to 2.0 world is the lift IPO. So, uh, this is pretty exciting. So Lyft has filed for an initial public offering. Uh, and uh, during the Obama presidency, he put in place what's called the jobs act. The jobs act allows you to file an IPO confidentially, uh, and then, uh, reveal the IPO after you've had decided you are going to go public and you've had your communications with sec prior to that, everything was transparent. Um, which is, you know, the downside of that is many times you would want to test the waters of the market and then pull the IPO without getting a black eye.

Scot:                                

[10:56] And you couldn't do that. So this, this allows you to have confidential communications with the sec and get everything done. So, um, a little background on me, I took my last company, ChannelAdvisor public, so I've got a lot of experience with this whole IPO process. What the one thing that you need to know is when you file to go public, the SEC, the Securities Exchange Commission, they want the consumer that that could be buying the, you know, the public investor. They want them to understand everything about your company. So they make you really kind of create this pretty comprehensive document that's called an S1. And we've lived, we've linked it to the Lyft S1 in the show notes. And I strongly recommend, if you are interested in this topic, which you by definition are because you're listening to this, uh, take a peek at that.

Scot:                    

[11:44] Now. It's kind of daunting. So, um, the weird thing about the IPO process is because there's so many lawyers and lawsuits out there, taking a public is a very risky proposition. It's very easy for people to sue you and say you misled them. So you end up with this kind of weird thing in theS1 where you have this 250-page document where you're trying to convince people to buy your company and own equity in it. But essentially the first third of it is essentially you telling everyone how your business is terrible. So, uh, just because what you want to do is really lead and make sure everyone knows all the risk factors, all the things that can go wrong, uh, et cetera. Then after you get that out of the way, you have this kind of 20 or 30 part, uh, page part and it's Kinda like, you know, it's like a sandwich, right?

Scot:                            

[12:32] So you've got this kind of wasted, this kind of exterior part that you have to kind of slog through. And then you get to the really juicy middle part there about the business and that's called the management discussion and analysis. So for the lift IPO, this section is really, really a fascinating. Uh, it starts on page 76, uh, if you want to pull up the pdf we've put out there in the show notes and I think it's a must-read for everyone. Uh, even, I'm going to kind of say in the, not only the vehicle world, but the e-commerce world too, because essentially Lyft is a marketplace, um, between drivers and riders. I'm and, and it's really fascinating how they talk about that. And I found there was, there was a lot of connective tissue to my previous e-commerce world. So, um, uh, another interesting output of this as the news kind of ramps up around the IPO.

Scot:                             

[13:20] What happens is a lot of reporters start reading this one, right? And their natural inclination is, this is terrible. Oh, you know, why would anyone ever invest in this company? Because again, the first 100 pages are about how Lyft is a terrible business. Um, so I saw several articles come out that, you know, Lyft is $1 billion business, but as hemorrhaging cash and we'll never get profitable. Um, and you know, lift in there and in the risk factors, you list all these things that could potentially go wrong. Um, so, uh, I would, uh, I would recommend everyone listening not believed that hype. Uh, it's just part of this process and I think people are misreading it. So I want to spend time today walking you through the positives. So here's some of the highlights. Lyft has 1.9 million drivers. I think that's, that's pretty amazing that, you know, there's effectively 2 million people.

Scot:                           

[14:10] Uh, that just on the lift system, um, that are, are getting, uh, you know, part-time or even full-time employment from this marketplace. And they have 31 million riders, Lyft’s revenue in 2018 was $2.2 billion. So this is a multibillion-dollar business that has been created from ride-sharing very, very rapidly. Um, a couple of other trends. So, so, uh, I'm not going to spend the whole podcast on this, but there were kind of, in the spirit of this podcast I wanted to tease out a Lyft does kind of add some, some meat on the bones around some of the trends I've already introduced here with the vehicle 2.0 framework. Um, the first one, they, they pontificate on his car ownership. So, so I'm going to read directly from this one here. Quote, car ownership has also economically burdened consumers. US households spend more on transportation than on any other expenditure other than housing.

Scot:                               

[15:02] In the United States alone, consumers spend over one point $2 trillion annually on transportation on a per household basis. The average annual spend on transportation is over $9,500 with the majority spent on car ownership and operation. Yet the agile, the average car is utilized only a 5% of the time in his parked for the other 95%. So, so a couple of data points there. Um, you know, the average household is spending about $10,000 on, on vehicles and transportation and it's only you're putting that into an asset. You're only using 5% of the time. Uh, and then continuing, we believe that the world is at the beginning of a shift away from car ownership to transportation as a service. So this is really interesting and they call it, uh, you know, t a s. Uh, so in the soccer world we have Sass, you have software as a service platform as a service.

Scot:                          

[15:51] Now, Lyft has introduced this transportation as a service, um, kind of platform. Uh, they continue lift is at the forefront of the massive societal change. Our ride-sharing marketplace connects drivers with riders and we estimate it is available to over 95% of the US population as well. In select cities in Canada. So, so another thing to know about Lyft versus Uber is Lyft has decided to really stay in North America, whereas Uber went international. Um, and subsequently is going to end up being larger than lift. Once we see their numbers, uh, continuing on in 2018, almost half of our writers reported that they use their cars less because of lift. 22% reported owning a car becomes less important. And as this evolution continues, we believe there's a massive opportunity for us to improve the lives of our riders. Uh, essentially lift to saying here that they're going to decrease car ownership.

Scot:                                 

[16:40] And, and, um, you know, when you're starting to read these articles coming out now, um, many of them will highlight one or two consumers that have decided to get rid of their car in favor of using a rideshare. Uh, another kind of common vocabulary that was new to me, I want to point out is, uh, we're most, most people are familiar with the ride sharing networks and obviously cars, um, most of them have are, are experimenting with what they call multimodal solutions. Many of them have either invested or bought some of the bike and scooter sharing programs. Um, and then, uh, the way lift says it is as follows, quote to meet these needs, lift his, created a multimodal solution with four components. Number one, ride sharing. And that's what we're familiar with. Number two, bikes and scooters. Number three, public transit, and then number four autonomous vehicles.

Scot:                               

[17:30] So, so this is really interesting and you know, they kind of envision a world where they'll piece this together for you. So let's, let's come up with a use case where you're in Boston and you are taking a flight to silicon valley, um, to this SFO airport. So they're envisioning, you know, maybe you scooter to a public transport, you that you get to the Boston airport, you fly to Sfo, you ride share, then you take the Bart, uh, and then you take a scooter. So they want a piece, all of that together in one centralized way. Oh, and maybe somewhere in there you take on autonomous vehicle from SFO to, to the public transport. Um, another really interesting tidbit here is, you know, kind of anticipating people wondering should I invest in Lyft or Uber? They talk about how they're going to win, which implies how are they going to beat Uber?

Scot:                               

[18:18] Um, and they talk about being very driver centric, uh, as one of their attributes. Um, so here's a quote. We focus on providing drivers with a best in class experience. From day one, we offer inapt tipping to help drivers maximize earnings. Uh, drivers have access to 24, seven support and earnings tools as well as career coaches, education resources in flexible car rental programs. We're also making significant investments in driver hubs, driver centric services, service centers, and community spaces to cis drivers on and off the road. They've also got several different programs. They talk about them. So this is a really interesting, one of the collision points in this future of vehicles is who's going to own vehicles going forward? Are they going to be kind of fleet type vehicles? Then the subsequent question is who's going to service them? So we have, everyone is kind of got a role in this and we're going to explore this topic on the podcast going forward.

Scot:                       

[19:11] So, uh, so that's just a tidbit of what's in that liftS1 a again, I strongly recommend you read it and we'll talk a little bit more about it as we go on. Oh yeah. One other area I wanted to highlight was they do talk about autonomous vehicles and there's two sections there. They say, quote, we're investing in autonomous technology employing a two pronged strategy to bring AVs to market. Our open platform provides market leading developers of autonomous vehicles, technology access to our network to enable their vehicles to fulfill rides on our platform. So what they're saying there is any ab company can effectively plug in and say, hey, here's some available vehicles, uh, if anyone wants a ride on them. Uh, simultaneously we're building our own worldclass AB systems at level five that they're level five engineering center, uh, with the goal of ensuring access to affordable and reliable AAVs.

Scot:                            

[20:00] Uh, Yep. So they're, they're kind of doing a two prong strategy then later in the document. They do say that they've got several people on the platform and they say active has enabled the commercial deployment of a fleet of Avs in Las Vegas, and they've facilitated over 35,000 rides on that platform, uh, since January of 2018. So, so Lyft is partnered with a company in Las Vegas. Uh, and it's interesting to hear them talk about that. Okay. Now, outside of lift, um, we're going to skip over connectivity. We're going to use the vehicle to a framework as we talk about news to kind of bucketize it. Uh, so, uh, there is a lot going on with connectivity. I'm not going to go into it, uh, in this show because we do have the smart car, a CEO coming up here in a couple of episodes. Um, so let's kick it over to ownership.

Scot:                                 

[20:49] So this, in addition to kind of the negative and positive views of Lyft generally coming out of the IPO, it's kind of shaken loose a whole bunch of articles now about, um, you know, ownership. Uh, also another interesting reaction is on February 22nd, uh, Daimler and BMW out of Europe announced that they're going to invest over a billion pounds into a new joint owned a car ride hailing business called share now. So the auto makers are looking at, uh, what's going on here with ride sharing and, you know, uh, I think you could kind of talk yourself into a doomsday scenario where, you know, there's the cars become these commodities and if someone's else driving it, what do you care, what car you have, et cetera. Um, so they're, they've thrown their hat in the ring and kind of, you know, made interesting bedfellows. These are very competitive companies, but they're kind of doing a JV here to create their own ride sharing network effectively.

Scot:                              

[21:47] So, so that's interesting. Um, another point is there's a lot of articles out now kind of talking about, uh, you know, the end of car ownership. I think this is really, really early, but it is kind of interesting to read the articles and kind of read some of the stats in there. Um, one of my favorite ones came out here just in the last couple of days from business week, which is now owned by Bloomberg. So Bloomberg Business Week. And it was called, is this what peak car looks like? And the subtitle is car trouble. So, so a couple of stats I wanted to share with you from that. Um, so, uh, one of the premises of the article is effectively young folks, uh, driving less. So it says, quote young people continue to turn away from cars with only 26% of us, 16 year olds earning a driver's license and 2017.

Scot:                             

[22:34] And that was a rite of passage that previously, uh, just 36 years ago was more like a 50 to 60%. Um, so their premise there is it's down by half. Now I can kind of speak from personal experience. I think people are just waiting a little bit longer to get their driver's license. So I think if you looked a little bit broader than kind of like when people are 16, they get their driver's license, um, that, that the trend is they kind of end up at the same place after a couple of years. But it is an interesting data point. The same, they echo the same data point in the UK where the number of 17 year olds taking the driving test there is down 30%. Now, uh, you know, I don't know the UK market as well as I do the yes. So we'll have to kind of keep an eye on that.

Scot:                                  

[23:15] Um, so, so another data point they use to support this fact that we're at peak car ownership is they say quote 10 years ago, so that'd be 2008. The auto industry predicted annual global vehicle sales with top 100 million by now, but instead they've stalled and we seem to be stuck kind of around 94 million. Uh, and, and, uh, that was in 2018, which is actually down a million from 2017. So kind of using this trend here to, to illustrate that they believe we're at peak vehicle now, that that could be what's going on. Um, but at the same time, you know, what you're finding is people are just owning their cars longer and I think, you know, cars have gotten more reliable and, and, and people are holding onto them longer. Um, to that point they do talk about, uh, you know, prices of cars are increasing. So, uh, here's a quote, automakers have been loading cars with extras and high tech touches, which pushes the average price of a new car in the u s to a record, 37,000, $777. So that's a, that's kind of a high point in that has increased the average age of vehicles. They're now owned about 12 years, uh, w which is kind of a pretty dramatic increase. It was around six, about 15 years ago.

Scot:                                  

[24:27] So, uh, then the final kind of point from this article I thought was interesting kind of in this topic of, of where, where are the dollars going? Kind of where's the puck going? Um, they have a quote from Accenture that says by 2030, $634 billion of the auto industry is actually going to be in mobility services. So, so kind of going from buying and selling cars to consumers to more of a services industry. So it's gonna be interesting to see some of these projections are out so far. It's hard to tell. Uh, you know, again, I come from the ecommerce industry and we're just at 15% of ecommerce as digital. Uh, which, you know, 10 years ago everyone was projecting 30, 40, 50%. So these things take a lot longer, uh, and we'll be tracking them here on the podcast and electrification news. Um, the market I kind of keep a close eye on is China because they're actually pretty far ahead of us as it comes to electric vehicles.

Scot:                                  

[25:22] Now, um, you know, I'm not saying that's bad for the US. China has a government, this act will be involved in is really got incentives, heavily aligned, ongoing electric, uh, and they're also building out infrastructure at the government level, which we don't have here in the US at this point. Um, so there was an article out this week, the, um, uh, it will put a link to it in the show notes as with the Bloomberg article I mentioned earlier, um, and it says China is China's leading EVO are Evie company is called BYD. Uh, and they just announced their results and they sold 43,000 electric cars and the first two months of 2019 and that represents a 175% year over year increase. So that alone is more than all the electric cars sold in the u s I believe, or are pretty close to it.

Scot:                                  

[26:06] I think there's about 50,000 sold last year. So you have one company that's kind of in two months selling more than the entire us. Um, so that, that's really interesting. Uh, and we'll be tracking and having some guests on to help educate us all about the China Evie market. Because I think that's a really good harbinger of things to come into other markets. Another key part of the market share and viability of electric vehicles is the battery cost. So the industry has standardized on lithium ion batteries and you know, a Elon Musk at Tesla, he's built a one factory that that really is kind of working to drive down the cost of batteries. Uh, and then, uh, it's called a Giga factory and then they're building another one in China that they have announced. Um, so another thing we're going to be talking about on the podcast a lot is what's going on around the battery technology because that's going to be the key driver.

Scot:                                  

[26:56] One of the measures that we look at in the battery technology is the dollars per kilowatt hour. Um, so there was an article out from Bloomberg this week, um, the, that really started to kind of dial in on that this, and what they found is the prices fallen 85%. If you look at the last eight years, so from 2010 to 2018, the focus on EVs has driven down the battery cost. Uh, and now we're sitting at a battery cost of $175 per kilowatt hour that was closer to $1,000, eight, just eight years ago. So you know, as that continues down is going to lower the cost to get into the market. Uh, also this week Tesla has announced a couple of interesting things. They finally have come out with the $35,000 model three, and then they also, um, because there's capacity challenges at their charging stations there supercharging network, they've come out with supercharging 3.0 so you can now charge vehicles faster and improve the throughput of the charging network.

Scot:                                  

[27:53] Uh, so those are all some really interesting topics. We'll keep tracking the news for you on around EVs. Uh, and then last but not least around autonomy. Most of the car companies there, there's a lot of these pilots I mentioned Lyft is working with a company in Las Vegas. Waymo is active in, uh, I think Phoenix, Arizona as well as the California silicon valley or the bay area. So, um, the state of California does this interesting thing where you have to get a license to operate autonomous vehicles and they're actually publishing the data out of the DMV. Um, so we've been tracking this pretty closely and we'll do a blog post on this to give you all the data and we'll link to it and show notes, but just some highlights. Um, so what you see is Waymo and again, Waymo is a division of Google.

Scot:                                  

[28:42] So Google has a parent company called Alphabet. Uh, and Google is one of the sub-companies in there. Uh, and then you have nest and a bunch of others companies. Waymo is one of those. Um, and I think Google has set that up so eventually they can kind of spin Waymo out as its own company. Um, so as we look at the annual data coming out of California a, it indicates that 2018 Waymo vehicles, Dru drove 1.2 million miles, uh, and they have 2.6 total driven over at the time. The other interesting thing about AVs that blows my mind is, so these vehicles are out there driving these physical miles. Um, and then they pull all that data and uploaded up into the cloud and they can run the simulated miles. So, um, you know, I've heard folks in industry say for every real mile they simulate another 10 to a hundred miles.

Scot:                                  

[29:32] So, so that's where the car can kind of in simulation land, you can kind of do a lot of interesting things, right? So at this point you're kind of in the matrix. So, uh, let's say these physical are, are gated to only go 35 miles an hour and simulated land. Maybe they could crank them up to a hundred miles an hour. And that forces the software. It really kind of helps you in a very safe environment because you're just simulated right to figure out what's going to happen. Or You could throw a bunch of bad acting cars at, at the automated car. Uh, so it's really interesting to think about that aspect, but continuing with this data. The second is GM. Uh, their subdivision is for autonomy is called cruise. Um, that one, um, so if we, if we kind of look at 2018, uh, again, we had Waymo at 1.2 million cruise a second at 500,000 miles and number three is apple.

Scot:                                  

[30:22 ] So Apple has an autonomous vehicle pilot going on. Uh, I think they call it tightened internally. Um, it's very secretive. It only drove 80,000 miles. Then you have a couple of books, Aurora, neuro, auto x, Baidu has is in there. And all those are in kind of like the 30,000-mile range. So a, if miles driven is important and with machine learning it, it is, uh, a kind of a big and mapping, uh, miles driven is, is kind of a proxy for how far ahead you are, you know, some of these companies. So there, so, so Google Waymo is essential. Eighth, four x ahead of Cruz and you know, oh, let's see, what does this like 50 x ahead of Apple? So it looks like they're pulling away. Um, when we use this one metric as a way of measuring what's going on there.

Scot:                                  

[31:07] Uh, another popular, uh, autonomous vehicle company is called drive.ai and they are in Dallas. Uh, and full disclosure, there are spiffy customer. So we, we help them maintain that fleet of autonomous vehicles and it's almost like public transport. So it has a very designated routes and they're timed and, and you can kind of, you know, it's almost like a bus schedule, you know, when they're going to come by. Um, there's an article out there that, uh, that company is for sale. So, uh, it's gonna be interesting to see if there's some consolidation in this space here or not.

Scot:                                  

[31:38] Kind of pivoting back to Waymo. Uh, as we talk and news on the podcast, we're going to be tracking Waymo probably the closest when it comes to autonomy there. They're kind of like the Amazon of autonomy. Um, their CEO, uh, hopefully, I can get his last name right here. His name is John Craft Kick, and in November at a Wall Street Journal conference. He kinda surprised folks by saying, you know, uh, by really tamping down expectations and saying, hey, you know, while it's true, we have these, you know, level five ab vehicles out there today, there's going to be a lot of constraints. Um, so he mentioned the light are really has a hard time, uh, in bad weather. Uh, so snow obviously, so these, these LIDARs and cameras are looking at the streets for cues on where to go.

Scot:                                  

[32:25] So if they can't see the lines in the street very clearly, uh, then they run off the road, which is obviously scary. I've also read articles that, uh, things that don't hurt confused the human eye can, can view light LIDAR. So they'll look at like, uh, trees with, with leafs, and that'll kind of, they'll think that's a big blob of something and they'll kind of steer out of the way of it when it could just simply be a couple of leaves that would brush up against the car kind of a thing. So, so there's, we're still early days and he effectively said, I don't see a day when we'll be at 100%. So that was interesting. Uh, but at the same time he did kind of talk about more of this level four stuff where he said, you know, I do see a day pretty soon where we're trucks is where there's the biggest problem.

Scot:                                  

[33:04] There's a shortage of truckers out there. Um, so you know, uh, I think where we're going to see a lot of activity, and we'll cover this on the podcast, is trucks carrying goods where you have a big part of the trip is kind of a highway driving. Maybe at some point we even have a lanes, but you could see a situation where a driver gets a truck to a certain area. Um, hit some kind of AAV technology probably stays in the cab for the first phase of this. But, uh, but um, you know, is, is there an emergency situation but then the trucks do the long haul without the human involved. And then there's the kind of downgrade back into level one, level zero more current news out of Waymo. Just this week they announced that they are actually going to sell their LIDAR technology in a standalone format.

Scot:                                  

[33:49] Um, so it's kind of funny. They're calling it laser bear honeycomb. I don't know where they came up with that name. Uh, and, uh, in a blog post they announced that they are going to actually sell these units to third parties. Uh, you could say, wow, you know, that, that's crazy. Why would they do that? There's going to be competition. Well, really the bulk of the innovation here is in software. And I think what they're looking for is people to do, you know, when you open these things up to an army of entrepreneurs, crazy things come out of the other side. Um, they also, uh, disclosed this same breath that the cost of LIDAR units has come down substantially. So, so effectively one 10th. So these units, uh, as much as two years ago used to cost $75,000, and now they're down to 7,000, 500 per.

Scot:                                  

[34:35] So we're, we're going to see, um, it's gonna be interesting to see what kind of innovations come out of Waymo licensing their LIDAR units to other folks. And we'll put a link to that in show notes in case any of you want to get a LIDAR and dote on your roof and do some experimentation. So that's the foundation of what we're gonna be talking about on the podcast. Hopefully you've gotten a little flavor of it as we went to the news. Um, and we look forward to, to really kind of digging into these topics and going really deep, uh, but also at the same time going broad. With that, it looks like we are out of our available time. We appreciate you joining us for the first podcast. If you enjoyed what we talked about and where we're going here, please go to iTunes or your favorite podcast app and leave us a five-star rating. Also, thanks to our audio engineer and editor Jackson Balling.