Autonomous Vehicle Engineering - July 2021 - 1

Editorial
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Bill Visnic
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Follow the money
Acquisitions, mergers and outright
departures from the sector serve as
almost weekly reminders that significant
consolidation of autonomous-vehicle
(AV) development is underway. The
scenario many forecast for autonomy is
unfolding like a classic film in which we
know so many of the lines: The money
is starting to add up and determine who
continues and for how much longer.
Despite years of wildly inexpenSUBSCRIPTIONS
+1.866.354.1125
AVE@OMEDA.COM
REPRINTS
Jill
Kaletha
+1.574.347.4211
jkaletha@mossbergco.com
sive costs to borrow, the related shootfrom-the-hip
attitude of venture capital
and the evolution of creative forms of
finance (see: SPAC), the game is beginning
to look like one to be survived only
by those with deep fiscal reserves and
legacy businesses to fund the long play
of automation. The signal that there's
a new and higher-stakes phase afoot
came (at least to my mind) when in
early June both Alphabet's Waymo
and GM subsidiary Cruise Automation
confirmed they were trolling for significant
new funding.
Waymo's announcement of a $2.5billion
funding round raised eyebrows,
even though it was fully subscribed by
multiple heavy-hitters in the financial
and automotive sectors. An executive
at one auto-industry component maker
brought it up during an interview on
an unrelated topic: " We are still talking
billions with a 'B,' correct? " After all,
Waymo's June money-raise came after
a $3.25-billion funding round that was
completed not even a year earlier.
Waymo's latest tin-cup outreach
came on the heels of longtime CEO
John Krafcik's departure in April and a
widely circulated story of Waymo One
pilot-program automated vehicles in
Chandler, Arizona, agitating locals with
loopy driving behavior and reported
involvement in a variety of minor accidents.
In a blog covering his departure,
Krafcik said the Waymo Driver system
has tens of millions of miles of SAE
Level 4 on-road testing and an excess
of 20 billion miles in simulation.
Dating to 2015, Cruise has
completed funding rounds totaling
about $10 billion, according to
Crunchbase (the most noteworthy
investor is GM's electric-vehicle partner
Honda, but Microsoft tossed in, too).
In June, Cruise took a $5-billion credit
line from GM Financial to buy Origin
vehicles slated for commercial service
beginning in 2023, in Dubai.
Even allowing for the comparatively
restrained commercialization approaches
of Cruise and Waymo, many years and
much money have been required to get
to their respective pending commercial
deployments in San Francisco.
Meanwhile other well-heeled entities,
including Argo AI, Aurora and certain Tier
1s also are striving to be full AV " system "
suppliers. Just as Waymo and Cruise
were announcing their latest funding
moves, Brian Selesky, CEO of Argo (itself
backed by Ford and VW) confirmed the
company probably will pursue an IPO
" within the next year, " Reuters reported.
Maybe I'm failing to see the potential
steepening of the adoption curve
once software, stacks and hardware
are mature and deployments become
commonplace. Maybe that curve's going
to look something like the one being
projected for electric vehicles (EVs).
Those investments have been similarly
massive, but EVs are in the hands
of private and commercial customers
right now. More are quickly coming to
narrow the chasm between investment
and revenue. As the billions roll like the
reels on a slot machine, can everyone
afford to wait for high-level automation
to start paying off?
Bill Visnic, Editorial Director
AUTONOMOUS VEHICLE ENGINEERING
July 2021 1
Autonomous Vehicle Engineering - July 2021

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