Think about how much capital will be required to put a million Waymo vehicles on the road. How many zeros are there on that number? Who is going to be paying that bill?
Given this, even if Waymo are first to driving 100% perfectly, I expect that Tesla will eventually leapfrog them.
But where did you get a million cars from? To equal Tesla's existing fleet?
Uber has 3 million active drivers globally. If you assume that they're working in 8 hour shifts, 1 million Waymo cars is a rollout sized to replace Uber.
Coming at the math from another direction, Uber does 1.6 billion rides a quarter. A million cars would mean 18 rides per car per day. Totally doable.
But Waymo would surely focus on countries with high wages - US, Canada, UK, Australia, most of Western Europe. Replacing Uber in only those countries would only need perhaps 500,000 cars.
Of course they're going to ramp up towards those numbers, but once the tech works and it's just a matter of cash, it's going to happen very quickly.
If Waymo can get a 60% gross margin instead of a 20% gross margin, their profits could be an order of magnitude higher.
This is a trillion dollar opportunity, and its the first thing Alphabet is seriously pursuing that can rival search.
Aftermarket conversion kits are a rounding error and there's no long term moat. And that's before you start to get in to issues like improper installation and use, aftermarket modification, accidents causing bad PR when the gear isn't even running etc.
Remember that AEB demo a decade back where the car just slammed in to the object it was meant to stop for and it turned out they hadn't turned it on? Nightmare.
The beauty of the Tesla model is that they've already made tonnes of the cars that should eventually be able to do this. Furthermore, instead of each vehicles being a cost for them, the vehicles are a source of revenue.
I acknowledge that it does all hinge upon Tesla reaching a point with their autonomy where it can be unsupervised. Some people say they will never get there, but I think that's pretty shortsighted. The data collected by their existing fleet is a massive advantage. Let's not forget that it's been more than 11 years since the first video of what became Waymo, and they can pretty much only drive a small area in Phoenix, with high likelihood of needing to train extensively for every new location as they're now doing in California. Tesla are doing most of the world in (more or less) one go.
The problem with Tesla is that while they've sold cars with that as marketing claim, there is very little reason to believe that its true.
And cars don't have an infinite shelf life; sure, they've sold lots of vehicles with that claim, but even if it were true, a whole bunch of those are already 1/4 of the way through an average US vehicle lifespan, and Tesla may end up with lower lifespan given its rock-bottom initial quality.
Yes, they definitely have the lead in outsourcing costs.
> Think about how much capital will be required to put a million Waymo vehicles on the road.
Actual deployment, not counting developing the technology, maybe, what, $100 billion or so at the outside, given a generous guess at the unit cost of the cars and a generous multiplier to cover other deployment capital costs.
> How many zeros are there on that number?
8
> Who is going to be paying that bill?
Well, I mean, if they couldn't convince outside investors, Alphabet could do it with cash on hand and still have money left over, but if they can demonstrate the technology, investors will be falling all over themselves to jump on board.
*: I don't know the actual number.
Waymo can just license the tech and sensor suite to manufacturers and make money off that. They don't need to actually build and sell a million Waymo vehicles.
