Who will win the self-driving race? Here are eight possibilities

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black German car drives through a modern tunnel

The self-driving technology industry is in a strange state right now. A number of companies have been pouring millions of dollars into self-driving technology for years, and many of them have prototype self-driving vehicles that seem to work.

Yet I know of only one company—Waymo—that has launched a fully driverless commercial taxi service. And I only know of one company—Nuro—that’s running a driverless commercial delivery service on public roads. You’d expect these companies to be capitalizing on their early leads by expanding rapidly, but neither seems to be doing that.

Meanwhile, several other players, including Cruise and Mobileye, say they’re planning to launch large-scale commercial services by 2023. But plenty of self-driving companies have blown past self-imposed launch deadlines in the past, so it’s not clear if that will actually happen.

In short, predicting what the next couple of years will bring is a challenge. So rather than offering a single prediction, here are eight: I’ve broken down the future into eight possible scenarios, each with a rough probability. Hopefully, breaking things down this way offers a good overview of the many different strategies being pursued by self-driving companies today. A decade from now, we’ll be able to look back and say which companies or approaches were on the right track. For now, we can only guess.

1. Waymo wins (20 percent)

Waymo

Waymo has been viewed as the self-driving industry’s technology leader ever since it started as the Google self-driving car program more than a decade ago.

In the optimistic scenario, Waymo will maintain and expand its current lead. It will grow its current taxi service from one corner of the Phoenix metro area to all of Greater Phoenix, then steadily expand to other metro areas. Running the largest driverless taxi service could give Waymo access to more real-world driving data and operational experience than any other company has, which could allow it to further improve its software and maintain its lead.

So why do I only give Waymo a 20 percent chance? While Waymo still seems to be the technology leader, it hasn’t capitalized on its lead as well as many people—apparently including Waymo’s own leadership—expected a few years ago.

In 2018, Waymo announced deals to purchase “up to” 82,000 vehicles for use in its taxi fleet, suggesting the company thought it was on the verge of large-scale commercial launch. Yet today its fleet still numbers in the hundreds of vehicles.

I don’t know why Waymo is moving slowly. Maybe its software has become excessively optimized for suburban Phoenix. Maybe its hardware or back-end support costs are too high to operate profitably. Maybe there are lingering safety or reliability concerns that Waymo wants to squash before expanding in a big way.

But whatever the issue, it may not go away any time soon. Which could leave an opening for other companies.

2. Another robotaxi company wins (25 percent)

Argo

Plenty of other companies are pursuing the same basic strategy as Waymo—building and operating a robotaxi fleet. These include:

  • Cruise (owned by GM, Honda, and others)
  • Argo (owned by Ford and Volkswagen)
  • Motional (owned by Hyundai and auto-parts supplier Aptiv)
  • Zoox (a startup that was recently acquired by Amazon)
  • Aurora (a startup that recently acquired Uber’s self-driving program)

If Waymo falters, I think it’s most likely to be on business execution: Waymo continues to have industry-leading technology but fails to expand rapidly enough to take full advantage of it. Running a taxi service with a few hundred vehicles in one metro area (as Waymo is doing now) is a very different proposition from running a taxi service with hundreds of thousands of vehicles in dozens of cities.

Automaker-backed companies like Cruise, Argo, and Motional might have a greater ability to rapidly scale up production of self-driving vehicles. Amazon obviously has a lot of experience with large-scale logistical problems. And Aurora has a close relationship with Uber, which might provide Aurora with preferential access to its ride-hailing network.

3. Tesla (and Comma.ai) wins (5 percent)

This will make Tesla fans mad, but I think it’s true: Tesla is a long shot.

The bullish case for Tesla is that it has access to a vast trove of real-world driving data harvested from customers’ vehicles. If you think limited training data is a major bottleneck for improving self-driving algorithms, then this might be a significant advantage. Tesla CEO Elon Musk also has a bigger appetite for risk than most of the other companies working on self-driving technology. Musk’s willingness to put unproven technology on public roads may accelerate Tesla’s progress even as it creates a greater risk of fatal accidents.

On the other hand, Tesla has significant disadvantages. The company’s business model—selling cars to end users—puts lidar sensors and high-density maps financially out of reach. Elon Musk has tried to spin this as a positive, calling lidar a “crutch.” But the fact remains that almost every other company is using lidar and HD maps because it believes they are helpful.

More fundamentally, it’s hard to watch videos of Tesla’s software in action and conclude that Tesla is in a leading position—or even that it is catching up to the leaders. Tesla’s unfortunately named “full self-driving beta” software routinely flubs scenarios that Waymo’s cars have been able to handle for years.

One of those Tesla self-driving videos referenced above.

If I’m wrong and Tesla’s strategy does succeed, that would be very good news for Comma.ai, a self-driving startup founded by legendary hacker George Hotz. Comma is building an open source self-driving system designed to run on a smartphone. Comma’s strategy is to enable early adopters to modify their own cars to take steering inputs from Comma’s smartphone-based software—and then use the data harvested from those early customers to further improve the software in much the same way as Tesla. Like Tesla, Comma has eschewed lidar, arguing that it can achieve adequate performance with smartphone-grade cameras.

Hotz’s ultimate goal is for Comma to be the Android to Tesla’s Apple. That is, if Tesla emerges as a clear leader in self-driving technology, other automakers will need to license their own self-driving technology to compete with Tesla. Hotz hopes that Comma’s software will become an industry standard among automakers, much as Android is an industry standard for smartphones not made by Apple.

4. Mobileye (and its partners) wins (10 percent)

A self-driving vehicle from Mobileye's autonomous test fleet navigates the streets of Detroit.
Enlarge / A self-driving vehicle from Mobileye’s autonomous test fleet navigates the streets of Detroit.

Mobileye, an Israeli company acquired by Intel in 2017, has some big advantages. As the leading provider of advanced driver-assistance systems (ADAS), Mobileye has relationships with a bunch of automakers. The company has leveraged those relationships to get data from numerous customer cars, giving Mobileye access to a king’s ransom in real-world road data. Mobileye’s dominant position in the ADAS market also gives it a deep bench of engineering talent.

Like Tesla (and unlike Waymo and some other companies in the space), Mobileye believes that full autonomy can be achieved through incremental improvements to ADAS. Mobileye is hoping to gradually deliver better and better ADAS until, at some point, customers can take their hands off the wheel and take a nap in the driver’s seat.

At the same time, Mobileye isn’t as hemmed in by financial constraints as Tesla. With Intel as its parent company, Mobileye has the resources to explore multiple technological approaches simultaneously. Like Waymo, Mobileye is experimenting with lidar and testing fully self-driving technology on public streets with safety drivers behind the wheel.

Mobileye’s plan is to license its chips, sensors, and software to a range of customers. So if Mobileye’s technology works, it could allow smaller companies to ride Mobileye’s coattails. The delivery startup Udelv, for example, recently announced plans to use Mobileye’s technology in at least 35,000 delivery robots between 2023 and 2028. Mobileye is hoping to have dozens of customers like Udelv in a few years.

An industry favorite?

A Mobileye victory would also be pretty good news for other automakers, because it would mean they’re unlikely to get disrupted by Waymo, Tesla, or other upstarts. Mobileye’s main business is licensing technology to automakers, so if Mobileye develops a leading self-driving stack, carmakers should be able to easily integrate it into their existing product lines.

Mobileye has released some impressive videos of its technology in action. However, it’s hard to judge self-driving technology based on a few videos. Lots of companies have released impressive videos, but most of them haven’t been confident enough in their technology to launch driverless commercial services.

There’s also a risk that Mobileye’s business model—licensing its technology to a wide variety of customers, from automakers to companies running delivery fleets—could hamper the company’s progress. Developing self-driving technology for one specific application is hard enough. Mobileye is hoping to develop a single technology stack that will perform well in a wide range of applications. That might not be realistic.

5. China wins (15 percent)

Autonomous vehicles from Pony.ai in Beijing in April 2021.
Enlarge / Autonomous vehicles from Pony.ai in Beijing in April 2021.

There’s a lot of international collaboration on self-driving projects, with overseas companies like Honda and Volkswagen investing in American self-driving projects and Intel buying the Israeli Mobileye. But China is mostly in a world of its own.

China has its own stable of self-driving companies that have largely developed independently from Western nations. Leading self-driving companies in China include AutoX, Pony.ai, WeRide, search giant Baidu, and ride-hailing firm Didi Chuxing.

Last December AutoX became the first company to test fully driverless vehicles on public roads in China—though this was merely a test of its technology, not the launch of a commercial driverless service.

I haven’t done very much reporting on these companies, so I can’t talk at length about their prospects. But what seems clear is that, if American self-driving companies face serious overseas competition, it’s most likely to come from China. (The most formidable company without American or Chinese ties is probably Russia’s Yandex.) China’s authoritarian but relatively competent government could theoretically find ways to speed the development of Chinese self-driving technology, whether that’s by building supportive infrastructure or shielding companies from liability concerns.

But so far, Chinese companies don’t seem to be dramatically ahead of their American counterparts, so I don’t rate this an extremely likely possibility.

6. Self-driving trucks win (5 percent)

Kodiak Robotics

Self-driving cars get the most attention, but a substantial minority of self-driving companies believe that trucks, not cars, will be the first application for self-driving technology.

Companies like Kodiak, Embark, and TuSimple focus on automating long-haul trucking routes. A couple of other companies—Waymo and Aurora—are hedging their bets, simultaneously working on trucking and taxi projects. Nuro, a delivery startup I’ll discuss more below, is also working on long-haul trucking via its acquisition of Ike last year.

Some of these companies are designing their systems to work autonomously only on freeways. Under this model, a human driver will drive the truck to a transfer point near the freeway. The trailer will then be transferred to an autonomous truck that will haul it on the freeway to another city. Then the trailer will be switched to another human-driven truck to navigate the last few miles of tricky urban driving to get the truck to its final destination.

This model has a number of advantages. Freeways are controlled environments that are generally free of pedestrians, cyclists, and other obstacles. They are generally well-marked and lack complex intersections. These factors could make the task of automating freeway driving relatively simple.

And in theory, a company could parlay the data and experience garnered from early success with self-driving trucks to other markets, growing to eventually be a major player in a range of self-driving applications.

However, I remain a skeptic of self-driving trucks for a simple reason: while freeways are easier to navigate in some ways, the potential costs of failure are extremely high. If a fully loaded semi truck loses control at 70 miles per hour, it could cause real damage. And there’s no obvious way to test this technology incrementally. At some point, each of these companies is going to have to push a button and send a truck driving on its own at freeway speeds. I’m skeptical anyone is going to feel confident enough to take that risk any time soon—or that regulators in many jurisdictions will feel comfortable enough to allow it.

7. Delivery robots win (10 percent)

Nuro recently announced a pilot project to deliver Domino's pizzas in Houston.
Enlarge / Nuro recently announced a pilot project to deliver Domino’s pizzas in Houston.
Domino’s

Nuro is another company that’s planning to haul stuff instead of people. But instead of automating large, high-speed trucks on the highway, Nuro is building small, low-speed delivery robots optimized for streets in residential neighborhoods (Nuro’s vehicles are bigger and faster than sidewalk robots). This is an attractive initial application for self-driving vehicles because a smaller robot traveling at a top speed of 25 miles per hour (40 km/h) is less likely to kill someone.

Two years ago, I made the argument that startups like Nuro that focused on low-speed applications could disrupt Waymo. The other startup I pointed to in that piece was Voyage, which was building a low-speed taxi service at a retirement community in Florida. I argued that focusing on low-speed operations in a controlled environment would greatly simplify the technology challenge, allowing these companies to enter the market much sooner than companies trying to build full-speed taxi services serving entire metro areas.

I then argued that once these companies had mastered these simpler applications of self-driving technology, they might be able to use the data and operational experience they glean to move upmarket and eventually beat companies (like Waymo) focused on more challenging driving tasks.

This prediction hasn’t held up well. It’s true that Waymo has struggled to bring its own technology to market at scale. But it’s not clear that startups like Nuro and Voyage are doing better. Voyage was acquired by Cruise earlier this year.

Nuro is still an independent company and appears to be going strong. However, Nuro seems to be in a similar holding pattern as Waymo. Earlier this week, for example, Nuro announced a pilot project delivering pizza for Domino’s—a partnership Nuro first announced way back in 2019. Like Waymo, Nuro has seemed to be on the verge of large-scale commercial operations for two or three years.

This doesn’t necessarily mean Nuro is doing anything wrong—it might just inherently take years of practice to get an autonomous delivery vehicle running. But this pace does suggest that focusing on low-speed delivery robots isn’t much of a shortcut to commercialization.

Still, the fact remains that Nuro is one of the few companies actually running a commercial self-driving service. And it may be gaining experience that will allow it to expand rapidly in the next few years. If Nuro does succeed, that could be good news for Zoox. While Zoox is primarily focused on building a taxi service, it could easily pivot to building driverless delivery vehicles for its parent company, Amazon.  Also, if Nuro succeeds we can expect a lot of other companies building self-driving stacks to court Udelv as a potential partner or acquisition target.

8. Somebody else wins (10 percent)

Technology markets have a way of surprising us. It’s possible that some startup I haven’t noticed yet is destined to embarrass the well-funded companies mentioned above.

Another possibility is an “everyone wins” scenario. Maybe self-driving isn’t one problem but a bunch of individual problems, each requiring its own carefully designed technology stack. Maybe driverless taxis, driverless vehicles, and driverless trucks are three distinctive markets that will each be dominated by its own group of companies. And maybe early versions of the technology will require so much human supervision that we’ll have a slow and gradual transition from human-driven vehicles to driverless ones. I don’t think this is a likely outcome, but it’s possible.

Another possibility is that nobody wins: maybe self-driving is an even harder problem than people appreciate, even after years of setbacks, and it will take decades, rather than years, to get working. In that case, we could have yet another “AI winter” where a lot of companies scale back their research in this area. Again, I don’t think this is likely, but it’s a possibility.

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