“We're building the world's most experienced driver” ~ Waymo
Google began its self-driving initiative as a project almost a decade ago in 2009. In 2016, this project became a legal entity by the name of Waymo, within the umbrella of Alphabet, Inc. (GOOG, GOOGL). Today, Waymo is the only company in the world with a fleet of fully autonomous cars on public roads. Here’s a look at its journey so far.
Focus Areas
Waymo is focusing on four areas, “creating a ride-hailing service, developing self-driving trucks for logistics, licensing with OEMs for personally-owned vehicles, and connecting people to public transportation.” It has made considerable advancement in each of these four areas.
Waymo isn’t building cars but developing the brain that can seamlessly be adopted by existing OEMs. Waymo’s initial tie-ups reveal that it will use vehicles made by Fiat Chrysler (FCA) and Jaguar Land Rover in its autonomous fleet in the U.S.
Jaguar Land Rover and Waymo are collaborating to develop the world’s first premium self-driving electric vehicle. Jaguar I-PACE will be the first premium self-driving electric vehicle in Waymo’s fleet and tests will start later this year to make it fully equipped to become a part of Waymo’s driverless fleet from 2020. It is estimated that up to 20,000 vehicles to join Waymo’s fleet in the first two years of production.
Building upon the discussion held in January 2018 to deliver thousands of vehicles to Waymo's driverless transportation service, Fiat Chrysler Automobiles N.V. and Waymo announced the addition of 62,000 Chrysler Pacifica Hybrid minivans to Waymo's self-driving fleet. The delivery of vehicles is expected to begin in late 2018. The two companies first announced their partnership in May 2016 integrate Waymo's self-driving capabilities into the Chrysler Pacifica Hybrid minivan. In 2016 and 2017, a total of 600 Pacifica Hybrid minivans were adapted to autonomous driving system.
Waymo has recently partnered with Valley Metro, the Phoenix area’s regional public transportation authority for self-driving mobility solution for better connectivity. The world’s first driverless transportation service is expected to roll out in 2018 and will be launched in two phases.
Waymo is currently testing its self-driving technology on Class 8 trucks. After conducting some tests in California and Atlanta, Waymo launched a pilot in March in Atlanta with its autonomous trucks carrying freight bound between Google’s warehouses and other logistic facilities. Google had plans to work on autonomous delivery trucks as is evident from a 2016 patent filing for a “package delivery platform.” One of its recent filings pertains to “engaging and disengaging for autonomous driving.” During 2017, Google was awarded 2,457 patents, seventh highest on the list.
Waymo’s vehicles have set a record of going furthest without human intervention, clocking more than 8 million miles on roads across 25 U.S. cities, and over 5 billion miles in simulation. On its private test track, Waymo ran as many as 25,000 individual simulation tests navigating difficult and unusual situations. To ensure utmost safety, Waymo is applying complementary sensors and software to negate the dependence on a single type of data for driving decisions.
Market Size & Valuation
Annually, more than 1.25 million people globally die in road traffic accidents. In the U.S. alone, figures for fatal traffic crash released in end 2017 showed that 37,461 lives were lost in 2016, an increase of 5.6% from the calendar year 2015. It is estimated that 94% of these serious crashes involved human error or choice. NHTSA is committed to “promote vehicle technologies that hold the potential to reduce the number of crashes and save thousands of lives every year and may eventually help reduce or eliminate human error and the mistakes that drivers make behind the wheel.”
The annual sales of fully autonomous vehicles (AVs) in the U.S.is projected to reach 5 million by 2026 vis-à-vis 20 million new AVs globally. The market for global advanced driver assistance system (ADAS) is estimated to reach $67.43 billion by 2025 in the wake of increasing government initiatives for mandating driver assistance system in order to lower road accidents is expected to enhance market growth.
UBS estimates that the global revenue from autonomous driving technology will be $2.8 trillion by 2030 with Waymo dominating 60% of the market share. Overall, there is a very bullish outlook for Waymo among Wall Street analysts. Morgan Stanley has recently valued Waymo at $175 billion, $100 billion higher than its previous valuation of $75 billion, based on the three key business areas, including autonomous taxis ($80 billion), logistics ($90 billion) and software ($7 billion). The valuation by Morgan Stanley is higher than $119 billion and $135 billion by analysts at RBC Capital Markets and UBS, respectively.
Autonomous vehicles are an inevitable part of the future of automobile industry and with Waymo’s technology, miles tested and entry into public transportation and trucking, it sure is way ahead on this journey.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
