The state of the autonomous vehicle industry in 2021

This article was written by Marc Amblard, Founder & CEO, Orsay Consulting on Urban Mobility Daily, the content site of the Urban Mobility Company, a Paris-based company that advances mobility businesses through physical and virtual events and services. Join their community of more than 10,000 global mobility professionals by subscribing to theUrban Mobility Weekly Newsletter. Read the original articlehere and follow them onLinkedin andTwitter.

Autonomous vehicles (AV) hit the bottom of Gartner Hype Cycle’s disillusionment trough in 2019-2020. Since the middle of last year, we have observed an acceleration in financing and valuation which has led to a few acquisitions. More importantly, it still singles out a few major players who are accelerating their technological development and pilot deployment. In addition, these selected companies bring together a growing number of OEMs, both light vehicles and heavy trucks. The latter focus more on electric vehicles and software development.

AD System majors have raised billions in recent months

In the past 9 months, five of the leading developers of autonomous driving systems (ADS) have raised more than $ 4 billion in total. Cruise enjoyed the biggest round with $ 2.75 billion raised largely from Microsoft and retail giant Walmart for a valuation of $ 30 billion! Likewise, Aurora, Pony.ai, WeRide, and Didi’s AV entity have each raised $ 300-400 million in recent months.

It can also be suspected that OEMs who have entered into partnerships with these companies (see below) have committed to making heavy financial contributions for the right to access the technology for pilots in the medium term and for the longer term production.

Another way to fundraise is to go public. Self-driving trucking startup TuSimple from China has just been listed on the US stock market, raising around $ 1.1 billion at a valuation of $ 8.5 billion. Likewise, Argo AI, of which Ford and Volkswagen each own 40%, plans to do the same later this year. This could reduce the pressure on the two OEMs, as Argo AI must secure its financial trail.

Credit: Autonomie Paris
Lidar companies will be big companies in the AV space.

Elsewhere in the AV space, the Lidar companies have also been very active financially. At least six of them have gone public, merged backwards with PSPCs, and have raised over $ 2 billion in the past 9 months. They took advantage of the SPAC wave and renewed hype in the AV space, managing to increase their valuation to between $ 1.4 billion and $ 3.4 billion.

The above valuations are enjoying a boom in financial markets but are difficult to justify, especially for lidar startups that have a narrow value proposition and overlapping market ambitions. Nevertheless, these valuations allow significant cash injections (with limited dilution), which will accelerate the development of audiovisual solutions for the transport of people and goods.

The majors of the AD system are vertically integrated

Major fundraising also gives developers the means to better master the key components of their solutions. While Waymo has developed its own in-house Lidars, radars and cameras and specifies its computing hardware, others have gradually integrated sensor startups. Last year, Cruise acquired Astyx (radar), complementing Strobe (Lidar) which was purchased in 2017. Likewise, Aurora took control of startups Lidar Blackmore (2019) and Bear (2020).

The ADS majors have also all developed their own simulation and mapping solutions and specify their computation platform in order to ensure optimal global integration. Pure ADS players such as Waymo, Argo AI or WeRide will provide benchmark designs for the combination of sensors, compute and mapping technologies to their vehicle OEM customers.

For a few players, vertical integration goes beyond AD technology to include vehicles. On the passenger side, Cruise (with GM and Honda) and Zoox presented their robotaxis and intend to exploit the mobility activity. Likewise, Navya, Easymile and others launched their own autonomous shuttles years ago. On the freight transport side, Nuro and Neolix have started to operate their own last mile delivery vehicles.

Earlier this year, Cruise made an interesting decision with the acquisition of Silicon Valley-based Voyage, which can be seen as a vertical downstream integration. This cannot be justified by the latter’s AD technology but rather by its market access – Voyage operates autonomous shuttles to retirement villages in the United States. These locations will likely be used as test beds for Cruise’s Origin robotaxi (above).

Aggregation around a selected group of majors from the AD system

OEMs have partially reallocated their AV R&D budget to accelerate the development of electric vehicles, a must given CO2 regulations and market trends, as well as to develop their software capabilities, another critical move. Given the sums and time it takes to bring robust AV technology to market – ADS majors would spend between $ 500 million and $ 1 billion per year – OEMs would be better off joining teams of experts for their technology. ADS.

As a result, we have observed the aggregation of OEMs around major ADS developers over the past few months (diagram below). Most ADS majors partner with passenger vehicle or truck OEMs depending on their purpose. However, Waymo and Aurora have managed to sign collaborations with both types of OEMs to meet their dual purpose.

orsay, av, autonomous vehicles
Credit: Autonomy Paris, Orsay Consulting
AD Systems Developers are OEMs.

While OEMs typically place their AV future in the hands of the ADS majors, they continue to advance their driver assistance game on a parallel and incremental path. Most deploy Tier 2 solutions, and a few venture into Tier 3, namely Honda and Mercedes after Audi’s attempt was limited by regulation. But the longer term goal of reaching level 4 will involve some sort of partnership with ADS developers.

In summary, it becomes clear that the capital-intensive development of ADS and AV technology will be handled by a handful of companies that will offer ADS to OEMs or develop and operate autonomous vehicle fleets.


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