Autonomy Isn’t Software: Safety First, Hype Later
I think investors' misunderstanding of the autonomy market (valuing $Tesla Motors(TSLA)$ $Lucid Group Inc(LCID)$ $Rivian Automotive, Inc.(RIVN)$ etc like tech companies) comes down to software vs hardware.
In software, you can ship something that's not perfect. But you build a user base and make it better over time, which is a flywheel of users and resources and distribution...ohh my!
In hardware, you get one shot to get it right. If you design a plane that costs $1 per mile, but it crashes 5% of the time, you have no customers. A plane that costs $100 per mile but never crashes wins the market.
In autonomy, safety is first. Pass that safety bar, and we can start talking about costs and features. But you have to prove out safety BEFORE anyone will get in your vehicle!
Tesla hasn't even passed this basic bar a decade into being an autonomy play.
Waymo and zoox are the only two (maybe I'm missing one) in the U.S. that have passed the safety bar to operate with NO safety driver. Zoox in a limited area and Waymo in a growing portion of urban centers.
What investors need to understand is companies need to pass that safety bar and THEN the hard part begins. Then you have to build a ride-sharing network, having financing partners, develop demand, how do you do maintenance, and on and on. This is a manufacturing business at its heart. It's not software. There are marginal costs. Reliability is life and death. They're very different industries.
Fisker designed a great car. He failed because he couldn't make the damn thing.
I'm tired of investors arguing about autonomy plans. Unless a company PROVES it can drive autonomously with no safety driver in the car and meets an appropriate safety threshold (~zero accidents), I'm calling BS on your valuation.
Prove it! Until then, don't talk about your ambitious plans. A plan means nothing when the real world punches you in the face. - Probably Mike Tyson
For SG users only, welcome to open a CBA today and enjoy access to a trading limit of up to SGD 20,000 with upcoming 0-commission, unlimited trading on SG, HK, and US stocks, as well as ETFs. Find out more here.
Complete your first Cash Boost Account trade with a trade amount of ≥ SGD 5000* to get SGD 688 stock vouchers*! The trade can be executed using any payment type available under the Cash Boost Account: Cash, CPF, SRS, or CDP.
Other helpful links:
💰Join the TB Contra Telegram Group to Get $10 Trading Vouchers Now🎉
How to open a CBA. How to link your CDP account. Other FAQs on CBA. Cash Boost Account Website.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
