Autonomous fleets create opportunities beyond vehicle makers

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 25:45

   like oh i want to bet on this thing or invest in this i shouldn't say bet uh how would you do it what are the trades uh or the investments that you would look at it's pretty early days for autonomous vehicles um but as the technology progresses i think there's going to be a couple places you can look for winners um the places where i'm going to be looking is first in the sort of picks and shovels play, which are companies that are actually making the components that go into these vehicles. I think the first opportunity here are going to be companies that make LiDAR sensors. And those are those expensive sensors that are in Waymos and Zoox's and pretty much every autonomous vehicle. And I think the reason why there's an opportunity there is because currently 95% of passenger car LiDAR sensors, which are in these autonomous vehicles, are made

2. 26:32

   in China. And obviously, that's a huge national security risk. Those Chinese-made sensors are already banned for military use. And there's actually bills in Congress that would ban them for civilian use as well. So if that happens, there would be a huge opportunity for American companies to come in and manufacture those sensors. So there's going to be some winners there. The second is going to be in the maintenance and upkeep of autonomous vehicles, right? Because unlike Uber and Lyft, where drivers themselves are maintaining their vehicles, these companies are going to have to maintain thousands of vehicles at scale across the country.

3. 27:08

   You know, they need to charge the vehicles. They need to park them. They need to clean them. Currently, there are a few startups that are looking to do this as a service for those companies. But there is an industry here in America that I think is going to see a huge windfall from this need, which is the car rental industry. You know, if you think about car rental companies, they already have these facilities around the country sort of ready to go.

4. 27:30

   And just last week, actually, Hertz announced that they're standing up a new leg of their business to do exactly that, to service autonomous vehicles. So I think we're going to see more car rental companies sort of pivot in that direction as well. And then I think the last winner is going to be the trucking industry. Because if you look at trucking, about 44% of trucking's marginal costs come from driver compensation and benefits. So if you can automate those costs, you know, it's obviously very lucrative. There's currently a company called Aurora that's testing self-driving on American roads.

5. 28:02

   And then Tesla also produces a semi-truck, which they say will eventually have full self-driving capabilities, although it doesn't quite yet. Dan Jelan is our research associate at Prof G Media.