You aren’t the only one wondering: when will self-driving cars be available?
The investors’ impatience is growing due to the pace of driverless cars development after prolonged years of bold promises and ambitious targets. They are not excited about the delay making them put pressure on the industry that grew accustomed to their piles of cash and latitude.
In 2022, the automakers responded to the increased pressure from investors. They decided to scale back the technology plans to lower the costs during the economic slowdown.
Alphabet Inc.’s Google was also questioned by an influential hedge fund on the advancement effort of self-driving technology, which from the experts’ predictions the endeavor has proven difficult.
How Self-Driving Cars Make Investors Impatient
TCI Fund Management Letter
Also, in 2022, Alphabet received a letter from one of the activist investors, TCI Fund Management, that questioned the continued company’s investment in the Waymo self-driving unit.
“Waymo excessive investment on self-driving cars has not been justified, and the losses it has made should be considerably reduced,” Christopher Hohn, TCI managing director, wrote according to the letter. Waymo did not answer the letter.
Waymo Patience in Alphabet Driverless Cars
Despite Alphabet’s driverless cars project starting more than a decade ago, Waymo kept investing in it and finally benefited from the company. In the year 2020, the self-driving unit began raising funds from some outside investors, but Waymo, at that time, was planning to transform the unit into a standalone company.
Waymo driverless cars operate as a ride-hailing service in the Phoenix metro area for charges, rapidly expanding into Los Angeles and San Francisco. In 2022, Tekedra Mawakana, the current Waymo Co-CEO, briefly elaborated on the company’s challenges when safely implementing the technology.
“This goal is not only about our patient in the learning process but also being accurate in execution. It is also a substantial long-term opportunity.” Ms. Mawakana briefly explained.
In the same year, 2022, Intel Corp decided to take the Mobileye car-tech unit and expose it to the public on the first trading day in an IPO. The company was valued at $23 billion, far less than the $50 billion initial leaders target.
Companies Terminating Their Investment
Volkswagen AG and Ford Motor Company terminated their firm investment in the startup Argo in driverless cars in late 2022 by scaling back on their autonomous-vehicle efforts.
When the two automakers dreamed of fully robotic self-driving cars to increase their revenue plan and future service, they invested billions of dollars in the project’s startup in the last decade.
The companies stated that they plan to reallocate their resources to human driving technology that is more viable to be short-termed, like automated approaches where vehicles can pilot on their own in limited situations and driver-assistance systems.
“It’s now clear there is still a long way ahead for the profitable, fully self-driving vehicles,” said John Lawler, Ford’s chief financial officer.
Reduced Workforce
Meanwhile, in 2022, an announcement was made by the driverless-delivery startup (Nuro Inc.) that it’s going to reduce about 20% of its workforce due to some difficulty when raising the company’s new funds.
Contrast Below Some Companies Expectations
A few years ago, a diverse range of companies from Detroit to Silicon Valley were betting on self-driving car technology that would disrupt the development of the auto industry and generate new revenue worth billions of dollars. The shift of the two sentiments contrasts the bet made by the companies.
The acquisition of Cruise cost General Motors $1 billion on the autonomous-vehicle startup, among many deals made. Companies competed to assure the investors of their cooperation and preparedness for the future and also wanted to lock in talents.
Unworthy Promises
In 2016, Elon Musk, CEO of Tesla Inc., promised that by the end of 2017, he would demonstrate an autonomous vehicle that would fully travel from Los Angeles to New York. This date never came and went in vain. The self-driving car’s promises and visions have contributed to Tesla’s stock becoming the world’s most efficient automaker.
The industry’s enthusiasm diminished after Tesla began an Uber Technology Inc. trial, leading the vehicle to get stuck and kill a road pedestrian. The incident highlighted the safety risks linked with people entrusting a car to be a robot on the road.
For now, it’s clear that as some companies venture from demonstrating self-driving cars to deployment, the issue affecting them is cost and the complex back end of operations and maintenance to run these car networks.
Morgan Stanley Surrenders
Also, in 2022, Morgan Stanley, the analyst of Adam Jonas, approved by stating in his valuation of the automaker’s enterprise value that he no longer assists any Cruise driverless-car GM’s business.
He estimated the losses GM faces at $2 billion annually and warned the GM investors in his letter. “We currently believe that Gm has noticed that almost all their effort in investing in Cruise is ‘sunk cost,’ and they should stop and move on in other areas to invest,” he wrote.
Autonomous Technology Weigh in The Future
Above all the pessimism and losses on autonomous technology, many analysts recommend and believe it’s excellent potential. This gave the automakers hope and made them pose difficult decisions they could make because it weighed more for future needs, explicitly the invention and development of more liable electric vehicles.
Experts predict that self-driving cars will be fully available to us in 2035. Meanwhile, its development is still in progress.
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