WEBVTT - Self-Driving Vehicles Navigate Funding Speed Bumps 0:00:00.320 --> 0:00:03.240 This is Dana Perkins and you're listening to Switched on 0:00:03.560 --> 0:00:07.440 the BNF podcast. Autonomous vehicles might be the cars of 0:00:07.440 --> 0:00:10.680 the future, but following a flurry of venture capital and 0:00:10.720 --> 0:00:13.840 private equity funding about a decade ago, investment in the 0:00:13.840 --> 0:00:17.439 technology is looking a little more tempered this last year, 0:00:17.600 --> 0:00:20.400 failing to reach four billion US dollars for the first 0:00:20.480 --> 0:00:23.880 time since twenty seventeen. While Apple has taken a step back, 0:00:24.000 --> 0:00:27.480 green shoots have come in the form of Tesla's Robotaxi announcement. 0:00:27.760 --> 0:00:31.600 In such a cash intensive industry, what autonomous vehicle strategies 0:00:31.600 --> 0:00:35.440 and technologies are appealing to car manufacturers well? To tell 0:00:35.520 --> 0:00:37.760 us more about this, on today's show, I get to 0:00:37.800 --> 0:00:41.559 speak with bnaf's head of Intelligent Mobility, Andrew Grant. We 0:00:41.600 --> 0:00:45.040 talk about the adoption of autonomous vehicles across different regions, 0:00:45.159 --> 0:00:48.320 such as robotaxis in China. We also review the different 0:00:48.440 --> 0:00:51.120 levels of automation that are available on the market and 0:00:51.360 --> 0:00:55.360 discuss Tesla's potentially controversial decision to continue with cameras as 0:00:55.400 --> 0:00:58.000 sensors while other parts of the market are embracing the 0:00:58.080 --> 0:01:02.160 more expensive light our technology. B ANDAF subscribers can find 0:01:02.240 --> 0:01:05.400 Andrew's recent research note at BNAF dot com or at 0:01:05.400 --> 0:01:08.640 BNF on the Bloomberg terminal. It's titled driving the next 0:01:08.680 --> 0:01:11.560 phase of electric Mobility in Europe. If you want to 0:01:11.600 --> 0:01:13.959 receive an update when we publish a future episode of 0:01:14.000 --> 0:01:16.880 Switched On, make sure to subscribe on Apple Podcasts or 0:01:16.920 --> 0:01:19.640 Spotify or wherever you get your podcasts and give us 0:01:19.680 --> 0:01:21.720 a review to share us with others. But right now, 0:01:21.800 --> 0:01:24.600 let's jump right into our conversation with Andrew about the 0:01:24.640 --> 0:01:37.400 outlook for the automated vehicle sector. Andrew, thank you for 0:01:37.480 --> 0:01:38.480 joining on the show today. 0:01:38.720 --> 0:01:39.840 Nice to be here, Thanks Stanna. 0:01:40.200 --> 0:01:43.320 We are here to talk about autonomous or automated vehicles, 0:01:43.360 --> 0:01:45.560 depending upon how you want to refer to them, and 0:01:45.840 --> 0:01:48.520 some of the developments in that space. Now, before we 0:01:48.560 --> 0:01:52.040 get to the Jetson's Cars of the future and where 0:01:52.040 --> 0:01:54.440 everybody's head kind of immediately goes when we think of 0:01:54.480 --> 0:01:57.960 autonomous vehicles, let's talk about those kind of at the 0:01:58.200 --> 0:02:02.840 lower level of the computer intervention here. So let's go 0:02:02.880 --> 0:02:05.960 through level zero through five. Can you give me a 0:02:06.000 --> 0:02:09.080 bit of a definition first of all, what an autonomous 0:02:09.120 --> 0:02:13.360 vehicle is and then go through those different numbers of autonomousness. 0:02:14.520 --> 0:02:16.840 Great way, of putting it down and thanks. Yeah, So 0:02:17.000 --> 0:02:19.960 definitions are very important in this space. Consumers need to 0:02:20.040 --> 0:02:22.679 know who's in charge of the vehicle as it's operating 0:02:22.720 --> 0:02:26.440 on the road. So there's various levels of automated driving 0:02:26.480 --> 0:02:30.240 that are defined by SAE International. That is the institution 0:02:30.360 --> 0:02:33.200 that used to be known as the Society for Automotive Engineers, 0:02:33.360 --> 0:02:36.640 and they have what essentially are six levels of driving automation. 0:02:36.880 --> 0:02:39.519 I'll simplify that a little bit just for our purposes 0:02:39.560 --> 0:02:43.000 because it's useful to just bundle these into different categories. 0:02:43.040 --> 0:02:45.560 So you have your level zero and level one, where 0:02:45.560 --> 0:02:50.040 there's either no assisted driving or just partially assisted driving 0:02:50.080 --> 0:02:51.880 that will help the human driver on the road. 0:02:52.040 --> 0:02:54.720 So is this the old school cruise control that's been 0:02:54.760 --> 0:02:57.000 around since my mother was driving me around? 0:02:57.080 --> 0:02:59.240 Yeah, exactly. Get up to a certain speed, lock it 0:02:59.240 --> 0:03:01.120 in and you should be should be fine. Then you 0:03:01.160 --> 0:03:05.160 get to your sort of more sophisticated driving, your advanced 0:03:05.200 --> 0:03:07.640 driver assistant systems that start to come in at what 0:03:08.360 --> 0:03:11.120 is known as level two and level three partial and 0:03:11.160 --> 0:03:15.320 conditional automated driving. So in these circumstances, the human driver 0:03:15.440 --> 0:03:17.800 is still the one that is in control of the vehicle. 0:03:17.960 --> 0:03:21.919 The computer and the self driving system are really an 0:03:21.960 --> 0:03:24.520 extension of that human driver. They are meant to help 0:03:24.520 --> 0:03:27.959 out make the driving a lot safer, but ultimately the 0:03:28.240 --> 0:03:31.680 onus is on the human driver to be in control. Now, 0:03:31.800 --> 0:03:36.400 at level three conditional automation, that means at certain stages 0:03:36.480 --> 0:03:41.000 and in very specific conditions which hopefully the vehicle manufacturer 0:03:41.080 --> 0:03:44.120 makes very very clear to the human driver, the computer 0:03:44.200 --> 0:03:46.680 is able to take over and do the self driving 0:03:47.080 --> 0:03:48.240 or drive the vehicle itself. 0:03:48.360 --> 0:03:50.720 So what's an example of this is the self parking 0:03:50.800 --> 0:03:52.600 or is this if you're about to get in an accident, 0:03:52.600 --> 0:03:53.480 it breaks for you. 0:03:54.240 --> 0:03:58.200 Yeah, so that parking is part of this, or automating 0:03:58.200 --> 0:04:00.160 parking where you don't actually have to do anything and 0:04:00.240 --> 0:04:02.640 the vehicle is going to do the parking for itself. 0:04:02.680 --> 0:04:05.880 But also it's specific location, so say on a controlled 0:04:05.880 --> 0:04:09.120 section of highway that's been mapped very thoroughly. Mercedes Benz 0:04:09.160 --> 0:04:11.320 has come out with a product where it is marketed 0:04:11.360 --> 0:04:15.400 as a level three self driving system and under those conditions, 0:04:15.520 --> 0:04:18.359 it's the computer that is under control of the vehicle, 0:04:18.480 --> 0:04:21.520 but it can still notify the human driver that it 0:04:21.560 --> 0:04:23.719 needs to come back in and take control of the vehicle. 0:04:24.080 --> 0:04:26.720 Okay, so I've got an idea of here we are 0:04:26.960 --> 0:04:29.839 zero to three. Now as we get up to four 0:04:29.880 --> 0:04:31.920 and five, what starts happening Now. 0:04:31.800 --> 0:04:35.240 You're talking about a different approach to the automation of 0:04:35.560 --> 0:04:38.360 the vehicle. What you have here is highly and fully 0:04:38.360 --> 0:04:41.159 self driving vehicles, and we just tend to bundle four 0:04:41.200 --> 0:04:44.520 and five together. That's really where it gets really sophisticated 0:04:44.600 --> 0:04:47.760 self driving technology. The computer is in control, it's doing 0:04:47.760 --> 0:04:50.680 the driving, and the human can do other things while 0:04:50.720 --> 0:04:51.360 in the vehicle. 0:04:51.600 --> 0:04:53.760 And what are some examples of cars on the road 0:04:53.839 --> 0:04:55.760 right now that are at that level four or five. 0:04:56.000 --> 0:04:59.600 Well, there's a few cases of this, so probably most prominently, 0:05:00.920 --> 0:05:04.400 which is the spin off from Alphabet Google their self 0:05:04.440 --> 0:05:08.880 driving car project. So weimo's operating in Phoenix, Arizona, in 0:05:08.920 --> 0:05:11.560 San Francisco and testing in a few other places throughout 0:05:11.560 --> 0:05:15.839 the US. These are level four highly autonomous vehicles that 0:05:16.000 --> 0:05:19.520 are capable of operating without any human in the vehicle. 0:05:19.680 --> 0:05:22.880 They have a bunch of sensors, very sophisticated computing under 0:05:22.880 --> 0:05:25.599 the hood of the car, and they do self driving 0:05:25.600 --> 0:05:27.760 on their own. There's a few other companies that are 0:05:27.839 --> 0:05:32.800 kind of pushing towards this space cruise. GM owned company 0:05:33.240 --> 0:05:36.000 was operating at the sort of level before an incident 0:05:36.240 --> 0:05:39.000 last year. And then there's a variety of companies throughout 0:05:39.120 --> 0:05:41.719 China that are operating at this level. So companies like 0:05:41.760 --> 0:05:45.440 Ponyai by do Or also operating these sorts of level 0:05:45.440 --> 0:05:49.240 four highly autonomous robotaxis that are available for public use. 0:05:49.400 --> 0:05:51.240 Okay, so we have a lot of different topics to 0:05:51.279 --> 0:05:53.960 get through today, and everyone hold on to that zero 0:05:54.080 --> 0:05:56.800 through five. Zero being low, five being high, and the 0:05:56.839 --> 0:06:00.919 different levels of autonomous vehicle that working to talk about today. 0:06:00.960 --> 0:06:03.040 But if it helps to simplify it a little bit, 0:06:03.120 --> 0:06:05.000 we just like to think of it as you've got 0:06:05.000 --> 0:06:08.040 your partially andconditional automated, that's your aid ass and then 0:06:08.040 --> 0:06:10.920 you've got your highly and fully automated that's your robotaxi. 0:06:11.120 --> 0:06:13.720 So those kind of two simple buckets of self driving. 0:06:13.800 --> 0:06:17.560 They're very different implications. They have different use cases, different 0:06:18.120 --> 0:06:22.480 financial opportunities. So we kind of simplified into those those buckets. 0:06:22.560 --> 0:06:24.360 That does simplify it quite a bit. So we've got 0:06:24.360 --> 0:06:26.920 it in these two categories. Let's talk about the money 0:06:26.920 --> 0:06:29.440 for a second though. So about a decade ago, there 0:06:29.480 --> 0:06:34.000 was a flurry of activity and the VC space, and 0:06:34.040 --> 0:06:37.159 some of the PE companies were as well investing in this, 0:06:37.279 --> 0:06:39.400 And what I want to know is where does it 0:06:39.440 --> 0:06:41.760 stand now in terms of investment and kind of have 0:06:41.880 --> 0:06:46.520 those original VC investments turned into bigger investments. Have they 0:06:46.600 --> 0:06:49.000 gone through the startup value of death? That sounds like 0:06:49.000 --> 0:06:51.720 there are a lot of fairly established companies that are 0:06:51.760 --> 0:06:55.080 actually trialing a lot of this technology right now in 0:06:55.080 --> 0:06:58.039 different parts of the world. But is it as much 0:06:58.160 --> 0:07:01.120 in the investor's i as it was, say a decade ago. 0:07:01.480 --> 0:07:04.479 Well, the simple answer is no. So a lot of 0:07:04.480 --> 0:07:08.080 money's flowed into this space. You're talking about seventy five 0:07:08.120 --> 0:07:11.040 billion in private equity and bention capital investment that we've 0:07:11.080 --> 0:07:14.240 tracked over the last ten years up to the start 0:07:14.280 --> 0:07:16.800 of twenty twenty four. And that really peaked in sort 0:07:16.800 --> 0:07:20.320 of twenty nineteen when a lot of investors were getting 0:07:20.320 --> 0:07:23.840 on the idea of a general self driving computer that 0:07:23.880 --> 0:07:27.480 could operate multiple applications. It could do a robotaxi and 0:07:27.520 --> 0:07:30.800 transport people. It could ultimately be applied to trucking. This 0:07:31.000 --> 0:07:33.560 driver could go anywhere and do anything. And then what 0:07:33.600 --> 0:07:36.720 we sort of had for the years since then is 0:07:36.920 --> 0:07:40.360 as there's been slightly less money flowing into the space, 0:07:40.440 --> 0:07:42.600 companies have had to come up with more specific use 0:07:42.640 --> 0:07:46.360 cases for their technology. They were pitching for very specific 0:07:46.400 --> 0:07:50.640 applications of their technology. So while them was less investment 0:07:50.640 --> 0:07:53.640 flowing into the space in general, it was more targeted 0:07:53.720 --> 0:07:56.520 and more directed towards companies that actually were developing a 0:07:56.560 --> 0:07:59.400 business model. They weren't just going to solve self driving 0:07:59.440 --> 0:08:01.800 in general, they were going to solve a specific pain 0:08:01.840 --> 0:08:06.000 point for consumers or businesses. So funding's dropped off. It 0:08:06.040 --> 0:08:08.040 was about four billion dollars that we tracked that went 0:08:08.080 --> 0:08:11.679 into the space last year. That's not small by any means, 0:08:11.680 --> 0:08:15.280 but significantly down from what we've seen previously. However, there's 0:08:15.320 --> 0:08:18.560 been some big announcements this year. Tesla's gone all in 0:08:18.600 --> 0:08:21.560 on this space. This obviously doesn't count towards venture capital 0:08:21.600 --> 0:08:24.560 investment because Tesla's are one of the biggest companies in 0:08:24.600 --> 0:08:27.280 the world, but they're spending about ten billion dollars this 0:08:27.360 --> 0:08:30.840 year just building out the self driving compute systems to 0:08:30.920 --> 0:08:34.440 try solve their self driving algorithms. Well, recently there's been 0:08:34.440 --> 0:08:37.840 some decent sized funding deals. So Applied Intuition raised two 0:08:37.880 --> 0:08:40.640 hundred and fifty million dollars through one of its funding rounds, 0:08:40.640 --> 0:08:44.480 and then quite recently Waive their British owned companies raised 0:08:44.480 --> 0:08:47.120 one billion dollars, which is a funding amount that at 0:08:47.120 --> 0:08:49.200 a Series C stage is something we haven't seen in 0:08:49.240 --> 0:08:51.520 this space in a little while. So nice to see 0:08:51.520 --> 0:08:53.440 those big billion dollar deals coming back. 0:08:53.640 --> 0:08:56.640 I can certainly see how from the end user standpoint, 0:08:56.679 --> 0:08:58.240 whether it's in a taxi or in a car you're 0:08:58.320 --> 0:09:01.920 driving yourself, that if this technology is working effectively, it's 0:09:01.920 --> 0:09:05.240 safer and you're ultimately in a vehicle that will you know, 0:09:05.480 --> 0:09:09.240 make fewer human errors assuming all goes right. Some companies 0:09:09.320 --> 0:09:12.080 have been decreasing their activity, while others have really been 0:09:12.120 --> 0:09:15.840 dialing up how their focus is on autonomous driving. You'd 0:09:15.840 --> 0:09:18.040 mentioned Tesla was one of them. Can you talk about 0:09:18.080 --> 0:09:20.480 some of the other automakers that are in this space 0:09:20.520 --> 0:09:23.760 who are adopting this technology and really what their strategy 0:09:23.840 --> 0:09:25.439 is and what the use cases and why they think 0:09:25.440 --> 0:09:27.120 it's going to give them a competitive edge. 0:09:27.400 --> 0:09:30.720 Yeah, definitely. So what's really interesting, maybe if I tie 0:09:30.720 --> 0:09:34.000 this back to why we actually are talking about self 0:09:34.040 --> 0:09:37.600 driving vehicles in what the listeners are are, we'll well 0:09:37.640 --> 0:09:41.120 know is very a Decarbonization Focus podcast and all the 0:09:41.120 --> 0:09:43.760 work we do at B and F is very decarbonization focused. 0:09:43.960 --> 0:09:48.080 Self driving vehicle technology is key to many automakers strategies. 0:09:48.240 --> 0:09:50.920 If you are investing in self driving vehicle development, that 0:09:51.000 --> 0:09:53.000 means you may not be investing in some of the 0:09:53.040 --> 0:09:55.560 other things that you need to do to become an 0:09:55.559 --> 0:09:58.800 automaker of the future. In Tessa's case, they have laid 0:09:58.800 --> 0:10:01.600 off a big chunk of this supercharger division and are 0:10:01.640 --> 0:10:05.239 devoting more of their resources towards self driving vehicle developments. 0:10:05.320 --> 0:10:08.320 Other automakers have gone the other way, where they have 0:10:08.559 --> 0:10:10.199 kind of cooled it a bit on some of their 0:10:10.200 --> 0:10:13.840 self driving vehicle ambitions and are focusing more on, say, 0:10:14.000 --> 0:10:17.920 operating more connectivity services. Maybe they are focusing more on 0:10:18.120 --> 0:10:20.880 aid asas and developing technologies that they can actually sell 0:10:20.920 --> 0:10:24.040 to consumers these days. Where this becomes really interesting is 0:10:24.120 --> 0:10:26.240 are you holding out for kind of a long term 0:10:26.400 --> 0:10:29.200 revenue and profit potential of some of your highly automated 0:10:29.280 --> 0:10:31.480 vehicle systems, or are you going to try make most 0:10:31.520 --> 0:10:34.120 of your money from aid asas and selling partially in 0:10:34.200 --> 0:10:37.760 traditional automation to consumers today. So I would say the 0:10:37.800 --> 0:10:41.720 majority of traditional automakers are tending to focus on those 0:10:41.840 --> 0:10:44.400 level two level three self driving systems and selling the 0:10:44.440 --> 0:10:47.160 host to consumers because as some of the modeling that 0:10:47.200 --> 0:10:50.200 we've done shows, that is a big potential revenue driver. 0:10:50.640 --> 0:10:52.880 How much do these systems cost and are they only 0:10:52.880 --> 0:10:55.480 found in luxury vehicles, because you know, if it sounds 0:10:55.480 --> 0:10:57.600 like it's the technology of the future, I'm going to 0:10:57.640 --> 0:10:59.920 guess that it's actually going to be a real premium 0:11:00.040 --> 0:11:01.440 and you're actually thinking about a vehicle. 0:11:01.840 --> 0:11:04.520 I mean, it's a definite added cost. It can be 0:11:04.640 --> 0:11:07.240 ranging from a couple hundred dollars for your level two 0:11:07.320 --> 0:11:10.320 systems up to a few thousand dollars for your more 0:11:10.360 --> 0:11:13.440 sophisticated level two what we can sometimes refer to as 0:11:13.480 --> 0:11:17.040 level two plus and level three systems. So that's a 0:11:17.160 --> 0:11:21.480 cost that sometimes the automaker will want to incorporate into 0:11:21.520 --> 0:11:23.960 the purchase price of their vehicle and sell it to 0:11:24.120 --> 0:11:26.440 the consumer with that price baked in, and sometimes they'll 0:11:26.440 --> 0:11:28.720 want to charge a separate amount for that. And we 0:11:28.800 --> 0:11:31.439 keep talking about Tessa, but there's a really good example 0:11:31.440 --> 0:11:34.280 of this with the autopilot and the full self driving 0:11:34.400 --> 0:11:37.160 software package which I'm using inverted commas. There for full 0:11:37.200 --> 0:11:39.560 self driving because it is not in fact a full 0:11:39.559 --> 0:11:42.959 self driving software package. It is a level two partial 0:11:43.000 --> 0:11:46.280 automation package, and they charge between eight and ten thousand 0:11:46.320 --> 0:11:48.720 dollars for that to purchase that package and use it 0:11:48.720 --> 0:11:51.199 within their vehicle. They have recently just cut the price 0:11:51.200 --> 0:11:53.079 on that down to eight thousand dollars, but it's a 0:11:53.120 --> 0:11:56.160 significant chunk that's added on top of the vehicle that's 0:11:56.240 --> 0:11:58.400 kind of depending on which type of test that you're buying, 0:11:58.440 --> 0:12:01.000 that's three to twenty percent of the cost of the vehicle. 0:12:01.400 --> 0:12:03.319 Given that this is a show that focuses on how 0:12:03.320 --> 0:12:06.680 decarbonization is changing the industries that we cover, to what 0:12:06.840 --> 0:12:11.719 extent do you find that autonomous driving is included in 0:12:11.760 --> 0:12:13.760 with a car that is an electric vehicle? Do you 0:12:13.800 --> 0:12:17.040 tend to find these together or really is autonomous driving 0:12:17.360 --> 0:12:20.480 across any number of cars and there's no strong correlation. 0:12:20.320 --> 0:12:23.480 Or there's definitely a very strong correlation between vehicles that 0:12:23.520 --> 0:12:26.720 are electric and vehicles that are self driving. So, first off, 0:12:26.800 --> 0:12:29.160 at the aid as level, a lot of the new 0:12:29.240 --> 0:12:33.079 vehicles that are being designed and packaged together, those tend 0:12:33.080 --> 0:12:35.720 to be electric vehicles. And while you're designing a new vehicle, 0:12:35.720 --> 0:12:38.880 it's much easier to add new technologies to that vehicle 0:12:39.040 --> 0:12:41.040 than it is to take an existing vehicle and then 0:12:41.160 --> 0:12:43.559 kind of pile this new tech on top of it. 0:12:43.720 --> 0:12:48.240 So inherently the newer vehicles out there, the electric vehicles 0:12:48.280 --> 0:12:51.600 also tend to have aid AAS and partially automated features 0:12:51.640 --> 0:12:53.800 as well. But then what we've observed with some of 0:12:53.800 --> 0:12:57.200 the robotaxis there and the testing data that's out there, 0:12:57.280 --> 0:13:00.160 a really high share of those vehicles are electric, to 0:13:00.200 --> 0:13:03.480 the degree of about ninety percent of the kilometers traveled 0:13:03.640 --> 0:13:07.520 in autonomous mode in California. Amongst all the companies that 0:13:07.520 --> 0:13:10.520 are operating there, and there's a list of about forty 0:13:10.800 --> 0:13:14.000 companies that are permitted to operate in California, ninety percent 0:13:14.000 --> 0:13:16.720 of those cometss were done now with electric drive trains. 0:13:16.920 --> 0:13:17.800 Why do you think that is? 0:13:18.360 --> 0:13:21.360 I mean a few different pressures. So one, you are 0:13:21.400 --> 0:13:23.840 going to be bringing in well a taxi service into 0:13:23.880 --> 0:13:26.320 an urban area, So it kind of makes sense if 0:13:26.320 --> 0:13:28.920 you are bringing it vehicle into an urban space, you 0:13:29.000 --> 0:13:31.200 might have some regulators that are looking at you with 0:13:31.280 --> 0:13:33.360 a close eye. Probably helps a little bit to have 0:13:33.360 --> 0:13:35.640 an electric vehicle as part of that. There are just 0:13:35.679 --> 0:13:38.360 going to be a lot more electric vehicles in the future. 0:13:38.760 --> 0:13:40.840 It makes sense to build on a drive train that's 0:13:40.840 --> 0:13:43.120 going to be more prevalent. And then there are some 0:13:43.240 --> 0:13:46.280 technical aspects to this as well. So if you have 0:13:46.320 --> 0:13:48.240 a big battery, you are running a big computer on 0:13:48.760 --> 0:13:50.680 these batteries as well, so you're going to have to 0:13:50.720 --> 0:13:52.640 have a big battery in any case. 0:13:53.040 --> 0:13:54.880 You've brought up the technology a few times. And then 0:13:54.920 --> 0:13:57.920 also Tesla, which then brings me to the different competing 0:13:58.040 --> 0:14:00.760 technologies that are being used at the moment. So Tuessla 0:14:00.880 --> 0:14:05.360 uses these cameras around the vehicle. And then there's lighter, 0:14:05.559 --> 0:14:08.840 which can you actually first explain what lightar is compared 0:14:08.880 --> 0:14:11.720 to a camera based technology, and then can we discuss 0:14:11.800 --> 0:14:15.040 kind of which ones are being used where and with 0:14:15.040 --> 0:14:16.280 what types of companies. 0:14:16.880 --> 0:14:19.680 So LIGHTER is light detection and ranging. Think of it 0:14:19.800 --> 0:14:21.760 just as a laser, So it's a different type of 0:14:21.800 --> 0:14:24.960 sensor that's used in these types of applications. Of all 0:14:25.000 --> 0:14:28.200 the robotaxis that are currently on the roads, they all 0:14:28.600 --> 0:14:33.520 use LIGHTER. It's a great sensor for practical purposes. It's 0:14:33.560 --> 0:14:35.560 got great range, it can operate in a lot of 0:14:35.640 --> 0:14:40.080 different weather conditions. It creates a very reliable three D 0:14:40.280 --> 0:14:42.760 map of what's happening in and around the vehicle and 0:14:42.800 --> 0:14:45.560 can really complement some of the other sensors that you're 0:14:45.680 --> 0:14:49.080 using in this space, so it will complement what the 0:14:49.120 --> 0:14:52.480 cameras see as well. The disadvantage of it is that 0:14:52.640 --> 0:14:56.000 it is very expensive. So the initial versions of this 0:14:56.080 --> 0:14:58.880 were uputs of thirty five thousand dollars for a single sensor. 0:14:59.080 --> 0:15:02.240 That's come down signif evantly and the technology has changed. 0:15:02.280 --> 0:15:05.560 It's gone from being one very pricey sensor that would 0:15:05.600 --> 0:15:07.640 kind of sit on top of the vehicle, it would spin, 0:15:07.800 --> 0:15:09.920 it would do a lot of different things. Now light 0:15:10.000 --> 0:15:12.240 or developers have kind of broken that up into a 0:15:12.320 --> 0:15:15.600 bunch of smaller versions that are positioned throughout the car 0:15:15.720 --> 0:15:18.480 or around the car, and incollective do the same thing 0:15:18.560 --> 0:15:21.920 but for a fraction of the cost. Now, for some developers, 0:15:21.960 --> 0:15:24.320 and Tesla being one of them that I would mention, 0:15:24.440 --> 0:15:27.440 are in the minority of the autonomous vehicle space, the 0:15:27.440 --> 0:15:29.480 price hasn't come down quick enough, and they don't see 0:15:29.520 --> 0:15:32.680 it coming down quick enough. You're talking still even at 0:15:32.720 --> 0:15:34.720 the kind of the best end, it's about five hundred 0:15:34.760 --> 0:15:36.920 dollars for one of these sensors, you need a couple 0:15:36.920 --> 0:15:39.120 of them on a vehicle. Some developers use up to 0:15:39.200 --> 0:15:41.120 eight of those, so it's still an added cost on 0:15:41.160 --> 0:15:43.880 the vehicle that pushes up the price. And on top 0:15:43.880 --> 0:15:45.920 of that, you still need the cameras to be doing 0:15:45.960 --> 0:15:48.800 a good job. So the approach of Tesla and one 0:15:48.880 --> 0:15:51.000 or two other developers in the space is to rely 0:15:51.120 --> 0:15:54.440 on the cameras to create this version of what's around 0:15:54.440 --> 0:15:56.760 the vehicle and what's ahead of the vehicle, and not 0:15:56.840 --> 0:15:59.400 rely on these sensors that can push up the price 0:15:59.400 --> 0:15:59.880 of the vehicle. 0:16:00.360 --> 0:16:03.560 So, given that Tesla's continued with the less expensive but 0:16:03.640 --> 0:16:06.680 the technology that's traditionally been working for them, is there 0:16:06.680 --> 0:16:09.400 a risk is light er costs continue to decline and 0:16:09.440 --> 0:16:12.160 the adoption becomes more prevalent, that Tesla could get left 0:16:12.200 --> 0:16:15.040 behind in this technology or at some point need to 0:16:15.080 --> 0:16:16.040 adopt it themselves. 0:16:16.360 --> 0:16:19.520 I mean, Elon Musk has been very clear that he 0:16:19.680 --> 0:16:23.080 has no intention of allowing the incorporation of lidar, in 0:16:23.080 --> 0:16:26.920 fact any other sensors long range radar for dy imaging 0:16:27.000 --> 0:16:32.080 radar within the Tesla self driving ecosystem. So it doesn't 0:16:32.120 --> 0:16:34.680 seem likely that Tesla would be doing that they are 0:16:34.720 --> 0:16:39.080 taking a gamble that they will solve self driving with 0:16:39.240 --> 0:16:42.280 their advanced computing that they're building out and spending all 0:16:42.320 --> 0:16:44.920 that money on. There is the potential that while they 0:16:44.920 --> 0:16:47.880 are working on that algorithm and pushing it ahead, they 0:16:47.920 --> 0:16:50.560 do just get beaten out by companies that are willing 0:16:50.600 --> 0:16:53.160 to lean on some of these other sensors and maybe 0:16:53.240 --> 0:16:56.360 take the additional cost of pushing up the hardware price 0:16:56.480 --> 0:16:59.640 of their vehicles. But there's also the option of, at 0:16:59.640 --> 0:17:03.360 some state which I would never discount, that Tesla does 0:17:03.360 --> 0:17:05.800 a bit of a U turn and ultimately starts to 0:17:05.800 --> 0:17:09.400 incorporate some of these sensors as the costic lines. There's 0:17:09.400 --> 0:17:12.480 a report that's just come out recently that Tesla purchased 0:17:12.640 --> 0:17:15.879 two million dollars worth of LDAR from Luminar Prominent Ladder 0:17:15.920 --> 0:17:18.800 supply last year. So this is something that they are 0:17:18.840 --> 0:17:21.560 testing with, but all statements coming out of the company 0:17:21.560 --> 0:17:23.760 are that they have no plans to put this into 0:17:23.800 --> 0:17:27.600 their vehicles. So waiting with beta breadth for August eighth, 0:17:27.680 --> 0:17:31.320 which is the announced dates of the Tesla Robotaxi being unveiled. 0:17:31.600 --> 0:17:33.480 Great. So, now that I have a good feel for 0:17:33.520 --> 0:17:35.240 the technology, I want to pivot a little bit to 0:17:35.280 --> 0:17:37.560 the regional dynamics. You know, we do this event in 0:17:37.600 --> 0:17:41.480 San Francisco every year, which is the BNEF Summit actually 0:17:41.520 --> 0:17:43.720 that takes place there and it's very focused on transportation. 0:17:44.000 --> 0:17:45.800 A lot of the people at the summit, both our 0:17:45.840 --> 0:17:48.800 team and the different clients that we have at the event, 0:17:48.920 --> 0:17:51.520 we're definitely in a lot of these robotaxis. So I 0:17:51.560 --> 0:17:54.040 saw it as a very real thing. There Where is 0:17:54.080 --> 0:17:56.320 the adoption? Am I right in thinking that the US 0:17:56.440 --> 0:17:59.879 is a big adopter of the autonomous driving technology? And 0:18:00.240 --> 0:18:02.800 outside of the US, also where else do we find it? 0:18:03.160 --> 0:18:06.080 I mean two definite leaders in the space, the US, 0:18:06.280 --> 0:18:09.399 with some states in particular being well ahead of others, 0:18:09.480 --> 0:18:12.760 and in China. So different approaches to how these vehicles 0:18:12.760 --> 0:18:14.720 are being deployed, and most of that's coming from a 0:18:14.760 --> 0:18:18.760 regulatory front, but you are looking at places like kind 0:18:18.800 --> 0:18:22.600 of southern states across the US where there are robotaxis 0:18:22.640 --> 0:18:27.000 being deployed, not just robotaxis, also some self driving trucks 0:18:27.000 --> 0:18:29.919 that are being tested to a fairly significant degree. And 0:18:29.960 --> 0:18:32.920 then California with San Francisco and the Bay Area being 0:18:33.000 --> 0:18:35.520 the tech hub that it is, it's a prominent area 0:18:35.560 --> 0:18:39.239 for robotaxi testing and deployment, and then across China. So 0:18:39.320 --> 0:18:44.040 a lot of the major cities in China, ranging from Beijing, Shanghai, Muhan, 0:18:44.520 --> 0:18:49.200 are significant autonomous vehicle test hubs, but working quite closely 0:18:49.240 --> 0:18:51.480 with the regulators to deploy some of these vehicles. 0:18:51.680 --> 0:18:53.280 So talk to me a little bit about the testing. 0:18:53.320 --> 0:18:55.080 How does that work as a test hub? You have 0:18:55.119 --> 0:18:59.040 this geo fenced area that the vehicles then ultimately operate 0:18:59.080 --> 0:19:00.919 in and then they collapse to a certain number of 0:19:01.160 --> 0:19:04.280 miles or people inside or people not inside. How do 0:19:04.280 --> 0:19:05.800 you go about testing the technology? 0:19:05.920 --> 0:19:08.240 For the most part, that comes down to the relationship 0:19:08.280 --> 0:19:11.679 with the regulators. This is a new space. There's a 0:19:11.680 --> 0:19:13.680 lot of back and forth between companies that are looking 0:19:13.680 --> 0:19:16.800 to deploy these types of technologies and the regulators. They 0:19:16.880 --> 0:19:18.320 end up having to go through what we call a 0:19:18.320 --> 0:19:21.320 bit of a policy gauntlet. You I'll use California for 0:19:21.359 --> 0:19:24.000 an example. You end up having to get a first 0:19:24.000 --> 0:19:27.000 a testing permit from the California Department of Motive Vehicles 0:19:27.080 --> 0:19:29.639 that allows you to drive around with a human driver 0:19:29.960 --> 0:19:33.080 supervising in the vehicle. Then you can get a driverless 0:19:33.119 --> 0:19:35.560 testing permit where you are allowed to take the driver 0:19:35.640 --> 0:19:38.960 out the vehicle. Then you are ultimately allowed a deployment 0:19:38.960 --> 0:19:41.280 permit from the California Department of Motive Vehicles and that 0:19:41.359 --> 0:19:44.720 lets you put your vehicles into into operation. But then 0:19:44.880 --> 0:19:48.280 you also need the California Public Utilities Commission to give 0:19:48.320 --> 0:19:52.160 you permission to transport passengers, either at a testing phase 0:19:52.359 --> 0:19:55.200 or for for commercial reasons, so you need a bunch 0:19:55.200 --> 0:19:57.520 of different permits. Then you might need to go to 0:19:57.560 --> 0:19:59.840 the federal level and get permission. If you are using 0:19:59.880 --> 0:20:03.399 a custom designed vehicle as your robotaxi, you need the 0:20:03.400 --> 0:20:06.480 federal government to sign off on being able to operate 0:20:07.000 --> 0:20:09.359