Smart Humans: Pre-IPO Briefing on Waymo and Autonomous Driving w/ Sacra's Jan-Erik Asplund

Speaker A: In this episode of Smart Humans we continue our conversations about pre IPO companies doing a deep dive on the world of autonomous vehicles. We go from Tesla to Waymo to Uber and Lyft. The old school cars, the new school cars. And where is the market going? Where is the economy headed with autonomous vehicles? And how can you get in today to make money over the next year or decade? Which investments should you look into and which ones should you avoid?

Speaker B: Welcome to Smart Humans with Slava Rubin presented by Vincent. In this alt investing podcast, Slava talks to amazing minds about their investment journey and finds out what it takes to make it in the markets. And now here's your host and smart human, Slava Rubin.

Speaker A: All right, let's get started. My name is Slava Rubin, I'm one of the founders here at Vincent where your platform gain you access to all things alternative investments. We have our alternative investment report, the daily newsletter as well as the Smart Humans podcast. We love to do these. Vincent presents also this pre IPO series talking about what's in the zeitgeist and all kinds of pre IPO companies. With us, the famous, the only Jan. Eric, say hi.

Speaker C: Thank you. Salah, great to be here.

Speaker A: All right, Yann Eric from Sacras. So always bringing awesome research to the table. We many of you have asked. So we're finally delivering, we're talking about autonomous driving. I was just actually in LA like about a week ago, uh, I was walking down the street and I was shocked to see how many Waymos and autonomous cars that were driving around, Teslas that were doing self drive. So this is of the moment. Let's talk about, you know, who are the companies to invest in? Where is the market headed, should you get in today? Is it early? Is it late? So I'm excited to jump into this. So let's talk about who's here. All right, we have three quarters of the folks are accredited, which is pretty usual but a little bit higher. We have an intermediate level of pre IPO investing and quite a bit two thirds are thinking about investing into the pre IPO market in the next 12 months. So let's go on to the next slide. A word from our compliance department. Nothing in this presentation should be construed as an offer to sell securities or solicitation offer to buy securities. All investments involve risk and the possibility of loss, including loss of principle. And neither past performance nor forward looking information is a guarantee of future results. Now next slide and we're going to ask a poll question which is you're here to talk about Autonomous. How many of you are thinking to invest into the autonomous space one way or another in the next 12 months? Now that does not mean are you investing into Waymo or Tesla? But those would count. Really? Are you thinking about investing into autonomous? Have you already invested? Thinking about putting more. Let's give it 15 seconds. Yes or no? Unsure. All right, Survey says only 9% no and 50% on the fence, which is why they are here. All right, thank you. Let's uh, remove that and let's just jump right in, which is 50% of the people in this audience don't know what they want to do. So this should be very informative. There's going to be four chapters to this conversation. First chapter is going to be some background. Uh, we're all going to level set so we're on the same page. Second chapter is we're going to talk about some of the companies that you could be thinking about. Third chapter is we're going to talk about competitive dynamics. And the fourth chapter, which I'm always most excited about is we're going to talk about the future and potential picks along the way. Feel free to use your Q and A to ask any questions you might have. I'll be reviewing that as possible. Um, and you know, try to track everybody, incorporates every questions. So how do we get here? Jan? Eric, what's the state? What's the state of the market?

Speaker C: Yeah, so I think the simple way to understand autonomous vehicles today is that is to look at it in terms of three eras. The first being early 2000s where you had DARPA and Stanford researchers actually prove that this was technically feasible on some level. The second era came about a decade later where you had this really huge uh, land grab from all these different big tech companies, but also automakers. So you had especially Google, Uber, gm, Ford, who were pouring billions of dollars into this space with the expectation that this technology was going to take off fairly soon. And uh, most of those attempts failed. So um, you know, Cruise is gone, Argo is gone. Uber and Lyft both shut down their own self driving labs which they had operated at, you know, great cost. Obviously a lot of those shutdowns came right as um, you know, things tightened up with COVID Sort of precipitated a lot of those projects coming to an end. The technology was still too difficult, still too far away and the capital burn was way too high. So what we're seeing today, this sort of third era which has taken form over the last five years, is a little more about consolidation. There's A little more focus on commercialization as well. So you have kind of a few big players in Robo Taxi. You have Tesla, you have Waymo, and you have Zoox with Amazon. These are companies that have massive permanent capital behind them. Or you have other companies that are taking a more capital efficient approach, which we'll talk about, like Wave and Wabi, more software focused, that kind of thing. So it's a different era. Um, ah, a bit more diverse, interesting players to look at as investments.

Speaker A: It's interesting. I remember a decade ago, literally I was in a, uh, Waymo in San Francisco and no driver in the car. As a matter of fact they were in the passenger seat, uh, trying to track how the car was doing. And I was there with my friend and it was just pure science fiction at the moment. It was just fascinating. You know, I was like a little kid kind of enamored watching how this was happening. Now if you look at one of the numbers on the right side of the slide here, 15 million rides from Waymo in 2025. So this is not science fiction, this is happening for real. Uh, it's amazing how, quote, unquote, quickly this is happening because a decade ago when in the middle section, people probably thought this was all too good to be true science fiction or not going to happen. Let's fast forward to the next slide, which is. Give us some perspective on some of the market traction.

Speaker C: Yeah, so that 15 million rides in 2025 is key to the reason that investors are paying attention to this space again. Um, why it sort of had a resurgence. Um, know we're seeing tons of capital flowing back into the space. Um, we're seeing the companies themselves expanding, um, you know, the sort of geographies where they're operating because. Right. Waymo started in Phoenix, which is maybe the sort of safest R and D, you know, sandbox to play around in, no pun intended, um, for autonomous vehicles. Um, and they've expanded from there to SF as their biggest market, I think. La, Austin, numerous other cities. And so it's, it's expanding geographically, vastly expanding in terms of rides. The numbers doubled, um, double doubling year over year, more than doubling year over year. So yeah, we're seeing a huge kind of amount of investor interest in this space again because it has been sort of proven out to, to be, um, to be functional with different approaches. Waymo, uh, Tesla, not quite as far along, but also showing very promising results here. Um, and we're also seeing this interesting fragmentation between the US and between China, where you have very different cost of goods and manufacturing costs and a parallel kind of market is being, is evolving there to the US one.

Speaker A: So you already said this but that 15 million growing to 36 million. We've said the word Waymo quite a few times already. What percentage of that 36 million in 2026 do you think Waymo is?

Speaker C: Um, vast majority of it is. Waymo I believe might be practically all um, Waymo basically because they are the only at scale commercial player in the US Self driving.

Speaker A: We're getting a little bit ahead of ourselves in the future. There's potential for many companies to competing in this space. Right. Whether it's Waymo or Tesla or Lyft or Amazon or. Which ones am I missing? Lots of, lots of good ones.

Speaker C: Right. So yeah, exactly.

Speaker A: What we're going to go through at the moment is we're going to go through some private companies as opportunities that you might be able to invest into. Is that right?

Speaker C: Yes, both on the um, you know, sort of Robotaxi, fully integrated Robotaxi as well as some of the more software centric players.

Speaker A: Okay, let's do it. Let's go through some companies. Give me way more first.

Speaker C: Sweet. But like we said, uh, yeah, pretty wide margin. You know Waymo is the commercial leader, um, doing 500,000 rides a week or somewhere. Thereabouts. A little more than that. Um, and having real revenue as well. So you know the latest is 355 million in February, um, 2026. Uh, you know that basically doubling annualized revenue a little more than doubling from the end of 2024. Um and you know you sort of described it already the Sci Fi vision. But the, for people who haven't experienced it, um, you know it's, it's taking away, it's like taking an Uber or a Lyft, um, functionally. But there's no cancellation. There's no like awkward experience with the driver. There's no.

Speaker A: Oh my gosh. There's no, there's no cancellation because they don't want to take you where you're going. That's the worst.

Speaker C: I can't believe that that still happens, but yeah, exactly. There's no um, there's no human agency on the other side of that button that you press to get a ride. There's no pressure to tip or make a conversation. It's currently priced at a premium to Uber and Lyft. And from a lot of the consumer sentiment it seems to be that people are not only paying more for the novelty, but they're sort of willing to pay more. Because you avoid all those little frictions in the experience. So, yeah, great customer experience is sort of the whole reason for this to exist. Financial highlights. The other sort of side of that is obviously the profitability question, which is one of the main questions with autonomous vehicles. And I won't be able to go into all of it today at a super fine grained level. But this is sort of the main thing to understand about the business model is the equation of vehicle costs, which are obviously higher for US companies versus ones operating in China, versus utilization percentage. How much of the day are these vehicles actually actively delivering someone and then how many miles are they traveling sort of in between? So these are important variables that need to be. They need vehicle costs to come down and utilization to come up in order to be profitable, which they're not. Right. They are supposedly close to profitable or supposedly contribution margin positive in San Francisco, which is their top market. But that is sort of the key question. Can this become a national transportation network where, you know, I take a Waymo in suburban Connecticut to go to the coffee shop. That would all depend on this question. All right. Can it become profitable out of that scale?

Speaker A: We just got transitioned to the next slide, which is interesting, right? Which is, in short, in San Francisco. Waymo is already making some headway, right? Which is fascinating. Obviously, Uber is still, let's call it, uh, the dominant player, but you know, these things can flip. And obviously Lyft is already kind of number three. Spoiler alert. I'm long Waymo. Not exactly a novel concept, but can we go back to the previous slide for a second? Because I think there's something crazy and I would like to unpack this, which is they're doing $355 million of annualized revenue, which in itself is a big number. Okay. But they were doing 131 in 24, grew 117% to 284. Right. Which is a nice, you know, 100% growth. That's not anthropic growth, but it's perfectly lovely off of big numbers. But then only growing to 355 annualized. Right. So at the moment it's not showing massive year over year growth. Right. Is that fair?

Speaker C: Uh, yeah, I think, I think it's not. It's not like super linear exponential growth.

Speaker A: So a $126 billion valuation is a 355x revenue. I mean, Elon would be proud of that. I mean, Elon doesn't even get 355X's sometimes. So we talk about Elon's Multiples being, uh, space level, pun intended. So, um, how Does Waymo get a 355X multiple?

Speaker C: Yeah, it's a good question. I think there's similar dynamics to a lot of some Musk company Elon Empire valuations. And with Waymo, I would think that the rationale is essentially that this is a technology that, and we'll go into this at maturity, you know, and whole proliferation will fundamentally transform so many aspects of life that we barely can even imagine and will be, you know, if it's, you know, cheaper than owning a car and paying for maintenance and all that by, you know, 2, 3x, then it will have an enormous market, um, in terms of who will buy it. So I think the fact that Waymo is so far ahead, um, towards getting there and has the entire, you know, the entirety of Alphabet behind it, uh, this massive war chest gives it, you know, kind of carte blanche, I would say, to have kind of whatever valuation it wants. So I think that's probably the main way I think about it.

Speaker A: So we're going to go faster through the other companies, but waymo is the 755 pound gorilla. So I just want to spend another minute here on Waymo. I'm looking at Uber real time Uber. Uber's market cap today is 1:51.7 billion. That's their market cap today and they are doing like buckets of revenue and making boatloads of profit. So this is just like fascinating. I mean, again, spoiler alert. I'm long Waymo and I think you can make money investing at 126 billion. But I'm just shocked that it's able to get such a huge valuation today. Um, it's not cheap to say the least.

Speaker C: Yeah. And it's probably worth mentioning as well that the biggest investor in Waymo in that round, valuing it at, uh, sorry, what if, say, 26 billion is Alphabet? So obviously there are other investors involved, but that is part of it. Right.

Speaker A: Somebody's asking a question. What would Waymo's revenues be if they could actually meet all the demand? How much of it is supply constrained? It's a bit of an unfair question because they would have to spend a ton of money to not be supply constrained. Right. So it's really a question of how long will the build out take and along the way how much market dominance could they have? Or will these other players like Tesla, Uber and others be able to eat into that market? And is this deserving? Okay, I think any, anything you want to say at the moment or should we just go through the other companies,

Speaker C: uh, on the next slide? There's just one thing I wanted to point out which is that the, you know, market share is an interesting facet of this question because Uber obviously has much higher market share, um, you know, the Waymo. But you know, there is sort of the line of argument for Waymo to stay around this 25, 30% market share zone, um, that folks have made, which is that by staying at a, at a somewhat lower, um, market share, they are actually sort of skimming, you know, they're, they're increasing their utilization because folks are using Waymos at these high traffic times. So they don't have as big of a fleet as Uber. Right. You're using Waymos at high traffic times, but they're staying more or less well utilized throughout the day, whereas Uber drivers are more, you know, kind of all hours being used in lesser amounts during the night, which is an advantage for Uber that they can sort of just turn people loose. Right. They don't have to care about the maintenance of the cars. They fully, you know, offload that to drivers. Whereas Waymo does have to think about that depreciation, maintenance, charging fuel, all that kind of stuff. So they, you'll see them stay at this sort of somewhat lower sort of market share in some markets, but in a way that is sort of better for the union economics at the moment anyway. So I just wanted to point that out on that graph before we move on to the next company.

Speaker A: Super interesting. All right, so we're going to move fast now through a bunch of other companies and some more slides. I do see some hands up. You don't need to put your hands up. Just ask your questions and I'll try to find it. Yana, Eric, take us to the next company.

Speaker C: Great. So Zoox is Amazon's acquired self driving company. Waymo started with basically taking regular cars, Jaguars and now Hyundai's, and modifying them. Um, Zoox started with this idea that the car should look completely different if there's not going to be a driver. Right. So there's no steering wheel, no pedals, the sliding doors, the seats face inward like you're on an Amtrak. It's uh, like a small moving living room. And the idea is this is a much better rider experience for the future where you have autonomous vehicles being used regularly and potentially better fleet economics. It's a simpler car, cheaper car, but obviously it's 12 years old, still need regulatory approval that are well behind Waymo. So that's kind of the big risks for the Issues, but definitely a very interesting sort of design take on um, the question of building a robo taxi.

Speaker A: So going back to Waymo, really hard to get into. But if you're lucky enough you could try to invest Zoox, really you're just getting into it through Amazon. So there's not a backdoor to try to invest directly. It might be one of those things where these autonomous uh, all spin out of their parent companies. But we'll see. Let's go on to the next one.

Speaker C: Great way the sort of software platform story here, right? So instead of owning cars or operating fleets, they're trying to basically license this software for self driving to various OEMs and fleet operators. And so the sort of core insider idea is the idea that AI can be, you know, can generalize across cities without doing a whole bunch of engineering specific to cities. Which is different from you know, the 10 years ago AV model which was all about mapping a specific city with cameras, testing, tuning for that specific city, doing that over and over. So Wave is trying to build a more generalizable model which they think that they can sell into Nissan Stellantis, but also Uber and Lyft so that those companies don't have to do as much work on um, on the self driving software side. The advantage is obviously they can sell to everyone. The, you know, downside or the risk is that what we've seen is that companies like Stellantis who have, you know, many car brands don't necessarily want to fully outsource this sort of, if you believe in autonomous driving, very, very important software layer to a third party business. We're seeing resistance to that and they

Speaker A: actually raised very recently at a 2.8. Is that right? Sorry, uh, what was at 8.6?

Speaker C: Yeah, 8.6.

Speaker A: I mean that's again not a valuation of laugh at. Do you know what they were valued at prior to that?

Speaker C: Uh, I don't have it off the top of my head, no.

Speaker A: And any knowledge on revenues?

Speaker C: I don't think it's. Yeah, it's hard to say. It's probably a lot of contract project driven stuff. Really hard to estimate.

Speaker A: Nice 8.6 L revenues. Welcome to 2026. All right, next company,

Speaker C: Wabi. Similarly, you know, uh, they're kind of more on the software side but they're just starting with trucks instead. So there's a decent history around self driving in trucks versus self driving in cars which you know, has been popular because there's a lot of built in enterprise demand. It's a highway centric use case which is much more predictable than doing robotaxi in a dense urban environment. Highway driving is in fact, you know, largely a lot of it is already automated. If you drive a modern vehicle with um, you know, L2, L3 automation. And they also have an Uber partnership, you know, uh, Wabi. Uber wants to potentially use Wabi, you know, as an AI model for um, Robotax. So the idea is one model for both trucks and taxis which you know would be, would be a big advantage if they could make that work.

Speaker A: I think this market is a no brainer. The US has massive highway system, really big country, the world as well. But really for the U.S. you know, we don't have incredible train systems. So I just think the trucking logistics is just such a big market and just taking out the human uncertainty or the human issues and adding that self driving. I think there's going to be a lot of money to be made here for sure.

Speaker C: Absolutely. And yeah, valued about half, you know, 3.75. So about half Wave. Neuro, you might remember Neuro from roughly a decade ago starting with autonomous delivery which you know, delivery robots. That was a very tough business then, still is now they sort of pivoted into licensing similar to Wave, the Autonomy software to OEMs and ride hailing platforms. Big partnership with Uber and Lucid Motors which is sort of has been their big foothold. So yeah, they're in competition with, with Wave, um, with a bunch of other companies out there too. Mobileye, Aurora, uh, Applied Intuition are other ones.

Speaker A: So these guys sounded like the other OEM partnering company. Right, which was, what was that one?

Speaker C: Yeah, Wave.

Speaker A: Yes, Wave, exactly. So what's the difference?

Speaker C: There's really no, you know, giant uh, meaningful difference in kind of what the surface, you know what they're trying to do is I think that they're um, you know they're both partnering or attempting to partner with a lot of the same automakers in that because there's still kind of a, you know, a land grab or a race to see who can sort of make this, you know, prove this out the best. So it's a lot of these kind of pilots and partnership programs that are, that are still, you know, in the evaluation, in the testing phase. I think Neuro, you know, Neuro has, has a little bit longer period of time of working on this um, because they started off so long ago doing, doing delivery. But yeah, so it's, it's a bit of a knockout fight.

Speaker A: M. Yeah, it's interesting the idea of partnering and licensing, you know to OEMs I think that's just like a harder sell to me of that being a big company, especially with autonomous, you know, safety, integrity, like trust. Uh, it'll be interesting if, if there could be a highly valued company with this kind of go to market. We'll see. I, I personally am not the most bullish on this go to market. Um, but we'll see. Any other companies?

Speaker C: Um, I think that's it. But no, I agree. I think uh, we had a question. Acquisition makes sense more of a consumer

Speaker A: question in terms of the market. You know, in the early days of Uber and Lyft or whatever the other companies, people started just looking at all different prices and just trying to compare and, and they would just take the cheapest and then they figured out that maybe it's not just the cheapest, there's other variables they might care about or loyalty or whatever. Then people were asking about aggregators, etc. Do you think there's. How is that dynamic going to change in terms of the prices of a regular car versus autonomous car? Are people going to go for the cheapest? Are there going to be different prices? Is there going to be an aggregator app? Uh, what do you think about all that?

Speaker C: Yeah, I think there's a, there's a, you know, um, there's a good chance that it's going to be just very similar. Um, you know, people compare on price obviously. So if one thing is cheaper, people will switch. But um, I think another in other other uh, factors like wait time. You know, whoever has the highest density of cars is going to have the lowest wait time. They're going to win in a lot of those head to heads, um, trust, comfort. You know, today that's not really, uh, you can sort of have some version of that with Uber you can request a woman driver for example, but autonomous vehicles sort of moot that point. Some of them might be avoiding highways, complex airport, you know, pickup areas. You can imagine some companies not being able to handle all those kinds of areas. So that might be uh, a new one. But otherwise I see it as being kind of similar to what we have today as far as that price comparison goes.

Speaker A: Cool, I agree. I don't think it's going to be much different. I think it'll just evolve. Similarly, people are going to pick for what they care about, whether it's cleanliness or safety or quickness or density or loyalty, etc. So this is just an illustration of just comparatively just how much further Waymo is ahead versus all these other companies. But we're not including here, really, Tesla, which is not really an autonomous company yet as a robo taxi company. So that can really turn on, turn on a dime. Right. Um, do we have any visibility of when that might happen?

Speaker C: It's hard to say. I know that there or I've read recently that you know, it's being piloted in Austin. So before anyone comments, I think, I think they are starting to test it. But yeah, hard to say how, how quickly it rolls out anywhere else.

Speaker A: Um, okay, great, next slide. Why don't you talk to us a little bit about the competitive uh, dynamics that are happening out there.

Speaker C: Perfect. So yeah, Uber, like we said, Uber and Lyft both sold off their self driving businesses and you know, have, have partnered instead. And so Uber famously partnered with Waymo. You can order a Waymo in the Uber app. Um, you know, the sort of upside for them is if we can't own the fleet, at least we can own the demand and take a cut of every sort of self driving interaction that happens. Uh, and we don't need to own the car. You know, just like with, with regular Uber. What has sort of shifted in 2026 is now, you know, like we've talked about, Uber has formed a lot of other partnerships, um, and Lyft has also formed, you know, several partnerships with self driving companies because the dynamics of that kind of position in the market and the value chain obviously point towards them wanting to have more options, um, you know, be able to give people a faster ride. Uh, maybe the Waymo app tells you a ride is six minutes away, but on Uber it's two minutes because they have access to other fleets, uh, that they can send you to. So, and then also they can sort of, you know, collect a take rate no matter who you go with. So that is direction that we're now seeing Uber going in, which makes sense and obviously creates tension with Waymo which will want to funnel people to their um, you know, first party app. And same with Lyft, the uh, the

Speaker A: headline, Uber putting 10 billion into robo taxis. What 10 billion? Is that like where did that go?

Speaker C: Yeah, they're making uh, they're making various investments. So two that I pulled out were Lucid Motors and then there's also Rivian, which is working on Robo Taxis. So they are, you know, forming.

Speaker A: That's like 1.75 of the plan. 10 billion you're saying?

Speaker C: Yeah, exactly.

Speaker A: Got it, got it. Because 10 billion is a real number.

Speaker C: Yeah, yeah, it's a lot of money that they are pouring into, uh, making sure that they have a stake in the future of robo taxis, future of the fleet vehicles.

Speaker A: Is Lyft doing anything with autonomous?

Speaker C: Yeah, it's, it's, it's much smaller. Uh, like if you use a Lyft, if you use the lift app, Lyft app in Nashville. Ah, you can order a Waymo there. And then there's also programs in Atlanta, um, and a few other cities where you can get a self driving car through Lyft, but it's not at the scale of Waymo or Uber yet.

Speaker A: Hot take. Is Waymo buying Lyft?

Speaker C: It's interesting. Maybe. I'm not sure. What's market cap like?

Speaker A: Nothing.

Speaker C: Five billion, I mean seems like a good idea.

Speaker A: Google, you heard it here first kids, just so you know, feel free to come on back. Um, all right, what's the next slide?

Speaker C: Cool. Yeah, Obviously we haven't talked about Tesla.

Speaker A: Yeah, yeah, we haven't talked about Tesla that much. I want to talk about the future. Like all this stuff, where is this all headed? Where should we be investing? So let's start placing some opinions, predicting the future, hearing some questions from the audience. Let's do it. Go for it. So where's Tesla with all this?

Speaker C: Great. Yeah. So Tesla has sort of gone away from the traditional way of doing self driving. What Waymo does is all through LiDAR radar sensors and that has proven to work for Waymo. Uh, what Tesla is trying to do is something extremely, you know, different, much cheaper at ah, scale which is using its install base of uh, Teslas and the cameras that they have on them and you're just using those cameras themselves to sort of build that full self driving and then um, turn full self driving into a robo taxi service and you know, in the future turn everyone's Tesla into potentially another node in a robo, uh, taxi network. So that while you're at work you can rent out your Tesla to go do robo taxi stuff uh, in the city and come back to you and have made you money. And they have the advantage of a ton of real world driving data. This potentially much cheaper hardware path and first party factories that they have. So if they can get to reliable full autonomous driving, they can do so at a better cost basis. Uh, the sort of only problem, I mean it sounds great. The only problem is that they haven't really proven that they can operate safely without drivers at scale and get regulatory approval to launch into cities which Wayo has done, which is why Waymo is still the commercial leader. But obviously with Elon it's hard it's tough to bet against him. So it's definitely one to watch in the future.

Speaker A: I am very long this idea. So obviously you can just play this through the Tesla stock, but I think the Tesla Robotaxi network, like I don't, I'm not a car guy personally. Uh, I have a car but I'm not like oh I can't wait have this other car and what about these horsepower and blah blah blah. To me it's like point A to point B, like car as a service via Tesla because they've been doing self driving for so long already. It's like a no brainer. Sign me up.

Speaker C: Yeah, I agree with you. It all depends on if you see driving your own car as being worth it in the future when it's a niche expensive activity.

Speaker A: Um, I have a question from the audience which is a great question. Probably it's a mistake by us, but the audience reminds us of an awesome company. I don't know if you got time to do research on this one, but applied intuition, 15 billion dollar market cap, we failed to include it. What do you think of Applied Intuition? Should be in this, here, in this, in this deck.

Speaker C: Yeah, they could be. I, I uh, there's a bunch of these software players and they are a bigger one. You know, supposedly 830 million annual recurring revenue. They're doing a lot of work, you know, in other areas of self driving as well. Um, um, so you know, industrial mining, some drone stuff, agriculture, these are some of the big verticals. It's, it's a very heavily enterprise based um, based business. They are doing some work.

Speaker A: Saying it's not, you're saying it's not as consumer oriented.

Speaker C: Not. No. Yeah, not until recently. Last year they launched kind of a um, you know, for self driving, for OEMs. So they are definitely trying to make a play and they're a long, you know, long standing player in the space. Definitely could have included them. I think it's just a T, sort of a toss up. Um, but yeah, definitely a big player revenue wise.

Speaker A: Yeah, I'm going to agree with the audience. I think that's a good, that's a good one. We should have had um, so talk to me here where as the future evolves, what should we be looking out for? For how to make money here?

Speaker C: Yeah, so going quickly, you know, I think there's kind of the, the Waymo approach, the Zoox approach, Tesla approach, full stack fleet. You, you have the cars that you own and you rent them out, you run your own software, you Kind of own the entire stack. Then there's the wave wabi neuro approach where you're licensing out software. It's much lower capex so you can go around the world and sell anywhere, uh, you know, relatively frictionlessly and you don't have any of the sort uh, of cost problems that full stack fleets have. I think that's one of the key distinctions that you should look at. Uh, you have sort of consumer versus, ah, consumer versus let's say enterprise. You know, trucking being the biggest segment in enterprise but there being other ones as well that are worth looking at like applied intuition with agriculture, construction, that kind of thing. Data, you know, uh, Waymo and Tesla being the, you know, clearing away leaders at least if we're talking sort of the US market, they have the most data that they can use to improve their own driving models. Then you have like I just pointed to gesture to us versus China. We haven't even talked about Baidu, um, or Apollo go here. But you know they are sort of the major other player globally and can produce cars much cheaper than Waymo. They also use lidar and they can build LIDAR sensors much cheaper. So really important um, to look at there as well. And then obviously capital structure, we sort of talked about this at the beginning but you know the companies that are winning right now are these ones that are backed by billions of dollars from Alphabet or Amazon. The ones that failed 10 years ago were generally not backed by this kind of permanent capital. So that's another important kind of moat to be aware of.

Speaker A: But yeah, and this is just such an enormous market, right? So many people have cars. There are so many cars and trucks out there. I do think there's going to be some big winners but I don't think there's going to be a winner that takes it all. So I do think there's an opportunity for several companies to become quite large. Um, do you have an opinion on full stack versus licensing?

Speaker C: Yeah, I think the, the, the full stack approach seems to make more sense um, from what we're seeing at least with you know, Waymo success. And I think the licensing, you know question is a little bit, um, it, yeah, it doesn't seem like um, it's hard to imagine OEMs being excited to sort of sign uh, away, you know, the most critical function of their vehicles, um, in the future, um, to a third party and pay rent on it. Um, potentially you know you could see a GM or Ford acquiring one of these companies in order to acquire their tech and integrate it. But so in that sense it could be interesting you know, to, to, to own one of these companies early and see it acquired. But um, yeah, I'm more interested in way out on Tesla.

Speaker A: I would say what are the chances of a Chinese um, network of cars in America?

Speaker C: I would say pretty low, um, pretty low given the current state of you know, our relations with them. Um, even Waymo has had trouble getting Chinese made cars just to use as kind of the vehicles for their, for their self driving to use in America I think was, yeah, it's hard to, hard to imagine that happening.

Speaker A: All right, let's go to the next slide. Give me some, some future predictions.

Speaker C: Yeah, so I, I think if you take the logic of autonomous driving and you know, say most people are like Slava, you know, you don't really think of a car as being anything you know, uh, extension of you. You're happy to use autonomous vehicles once they're available and cheaper than maintaining a car or maybe not even cheaper. But basically if everyone starts driving around autonomous vehicles or riding around them, then a lot of things start to kind of shift um, in a lot of ways that open up I think investable opportunities outside private markets, outside uh, pre IPO startups because of just how much the world can sort of be reshaped around this form of transport. So for example parking lots are no longer as necessary if you have autonomous vehicle fleets dropping people off door to door everywhere they go. Right. So those become redevelopment opportunities. Right. You can have totally different looking malls and stadiums, airports, hotels, multifamily businesses. You can have local businesses pulling demand from further away. Once a car ride is not something to endure. You also can have kind of second uh, ring suburbs further away from the cities. Areas around airports can become more investable once a 45 minute drive is not a big deal. You also need, you know these, these cars uh, are going to need significant amounts of you know, a grid for charging, zoning uh, physical space. So it creates a lot of a huge infrastructure need um, on that side. But yeah, you can sort of, you can sort of imagine all day the ways that, that um, everyday life could be different and that all these sorts of things could be different uh, in an era of, of 80s.

Speaker A: I love this visual and also this perspective. The idea of less parking, less traffic, less parking lots, better use of space. I am super pro. This obviously will come with some negatives um, associated with that, but I'm quite bullish from that perspective. With this in mind let's go back to the three predictions of how this EV market could Evolve. So give us kind of the base barrier and bull case for the market.

Speaker C: Yeah, I, I think the bear case is basically that the you know, hardware, uh, costs don't come down, which you know, make it hard for companies like Waymo to really expand geographically outside of where they are now. You might also have regulation. Uh, you know, right now it seems like robo taxis are significantly safer than human drivers, get in less accidents, but you never know.

Speaker A: Yeah, I've heard that insurance companies, insurance companies now charge you if you use full self drive on Tesla and they track it, they charge you like half the price on the insurance per mile for the mile.

Speaker C: Oh yeah.

Speaker A: That you use the self drive. Almost like gamifying to have you use self drive more.

Speaker C: I think I've seen that with um, I know Lemonade launched. Uh.

Speaker A: Lemonade. Exactly.

Speaker C: Exactly. Yeah, exactly. That's great. I hope they don't look at the YouTube videos of people going and you know, sleeping while they do full self driving. But it's all about using it the way it was intended.

Speaker A: In this chart, what's today's EV market? What's the, your av, your automatic vehicle tech and then the sector ev, what are you, what are the numbers today that then you're comparing with these numbers here

Speaker C: today? I, I think probably close to. Well, I think the AV tech market is probably quite maybe 20, 30 billion if I just sort of ballpark it, or maybe a little bit more than that, maybe closer to 50, 60. Um, so I think we're building in a little bit of growth in the bear case based on the momentum that they currently have.

Speaker A: And what's the difference here between AV tech and sector ev?

Speaker C: The sort of sector EV I think is more the sort of market caps. Um, a bit of a fine distinction but, but like, yeah, like revenues versus versus market caps or, or TAM versus market cap.

Speaker A: Okay, so your bear case is not so much bigger than we are today. Your base case is we're actually growing like 4 or 5x, is that right?

Speaker C: Yeah, exactly.

Speaker A: Got it. And then what does the bull case look like?

Speaker C: Uh, well, both cases, you know, hardware costs come down quite significantly and regulation continues to be, you know, or even kind of eases up. I think there's been a lot of progress made, but gets easier. You uh, have Uber and Lyft, you know, fully integrated with these, with these different fleets driving demand. And I think you would have one other player besides Waymo sort of scaling up. So whether that's Tesla most likely would be the biggest candidate. But I think that's the world where this kind of becomes a major market by 2030, where anyone in a sort of metropolitan area or just outside of one is going to be experiencing an autonomous vehicle at some point within the year. So yeah, that would be obviously very exciting.

Speaker A: So using Waymo's bull case, revenues of 10 billion and they're 355x multiple right now, Waymo would be worth, what is it, three and a half trillion?

Speaker C: Uh, yeah, seems right.

Speaker A: Is that right? Anybody in the audience can correct me. That is bananas. Okay, so obviously their multiple probably won't stay at 355 but let's say they are doing 10 million of 10 billion of revenues in 2030. What's your prediction for Waymo's valuation?

Speaker C: 10 billion of revenue in 2030 I would say. I mean I think you could make a case for them at uh, least a trillion dollars valuation. Right. About a third of Microsoft or the leader in autonomous driving. 100x multiple. But yeah, that's just ballparks.

Speaker A: Nice. Trillion dollars. I love how we just say that so casually. We didn't have a trillion dollar company until a few years ago. It's amazing. Let's go to the play by play. So we have some predictions per companies. Let's go to the final slide which is give us some predictions for all these various companies. Give us your one liner for each. So we have on the left some of the traditional companies and what we're going to predict for them in 2030. Kind of the top five OEMs and on the right the five most obvious kind of platforms that are leading the way. So talk to us. Give me as you give me your one liner. Just give me red, green or yellow. In terms of green you're super bullish on this company. Red, you're super bearish and yellow you're just like holding.

Speaker C: Yeah, I think gm, you know, um, GM probably a, ah, red. I think they tried to own the robo taxi market early but they bought Cruise, spent a lot of money on that then, then shut it down. Safety issues. The most sort of realistic outcome is basically them, you know, continuing to reuse that Cruise talent to build, you know, to build levels of automation into their uh, their current vehicles.

Speaker A: Ford.

Speaker C: Yeah, Ford. Ford had Argo, which was another big Robotax company or self driving company and I would say roughly the same as gm. Um, red. Because I think what they're basically focused on now is adding in highway self driving essentially into their existing fleet.

Speaker A: Is there any company on the left side that you're green?

Speaker C: Uh yeah, I couldn't say. I think like Honda has a little bit more sort of heritage on autonomy, uh, from a lot of what they've done in Japan. But yeah, it's hard to say. Maybe yellow. I think I'm not quite green on any of them.

Speaker A: Here's a bold question. In 2040, do all five of these companies exist?

Speaker C: I think so. I think that the supply chain and factories I think will be essential for manufacturing vehicles. I think Toyota right now has that sort of, of these. Toyota is maybe the furthest ahead in that they've been sort of supplying vehicles to Waymo for some time. So, you know, whoever can make kind of durable, high volume, low maintenance, elite vehicles, I think will have a huge business around this. Yeah, it's easy to see how things might turn for, for some of the

Speaker A: other ones, I'm going to say all five of these do not exist in the form that they exist in. Um, they might still exist, but they might not be the parent. Maybe somebody owns them for their quote, unquote manufacturing capabilities. I'm not buying any of these stocks. On the left, talk to me on the right. Let's give the one liners and give me your red, green, yellow.

Speaker C: Yeah, for me, Waymo, you know, I'm green. I think they have produced the clearest proof that this business works, that the technology works. Um, and now it's sort of, uh, you know, it's a question of optimizing vehicle cost and utilization and expanding city by city, which is, you know, I think more of a, well, slightly more of a solved problem. Um, but I'm also agreeing on Tesla, so I think, you know, they have the cars manufacturing base, they said this huge brand, all this driving data and I think they'll get there. In terms of full automation, I don't see it not happening. So I think, yeah, I'm pretty much green on, on both those.

Speaker A: How about Zook? Green? Red or yellow? Amazon?

Speaker C: Um, I think red on, um, Zoox. Um, yeah, I, I don't, um. It doesn't seem like they're, you know, anywhere near the others in terms of progress.

Speaker A: Uber.

Speaker C: Uber. Really good question. I, yeah, I, I don't know. I, I think, I think yellow. I think, I think yellow. It depends, I guess, on how Waymo's rollout goes in other cities. I'd be interested to see how the consumer brand does. But it seems anecdotally, it seems pretty good. You know, I have very tech pessimistic, skeptical friends who happily jump into Uber, into Waymos in la. So it does seem like the brand is pretty good. Maybe they don't need Uber, um, to drive demand. So I, I feel yellow and then I feel red on Lyft. Unless obviously they do uh, unless obviously Alphabet, you know, as you suggested, that buys them.

Speaker A: Got it. Super helpful. So I am bullish on Waymo, but I do think in the near term they're going to have some rollout scalability challenges that I do think it is expensive today. So I don't know if it's an obvious $500 billion company in the next year but I do think it has the potential to be a $500 billion if not even a trillion dollar company in the future a ah, decade forward. So I do think Waymo is a long green but choppy in the near term is my opinion. I am totally bullish on Tesla. I can't wait to pay for a Tesla subscription and not have to own a car. I agree on Zoox. I am red on Zoox. I am green on Amazon. I just think Amazon has not prioritized this market. I wouldn't be surprised if Amazon somehow becomes a major player in the trucking autonomy business to lower their costs for their own prime and delivery services. So I wouldn't be surprised if they add a whole lot of autonomy, whether it's airplanes, trucks, drones, et cetera. But I just don't think they're focused on the consumer and I think that's fine. So um, I'm long Amazon but short red on the car opportunity. I am differentiating with you on Uber. I think Uber is a good entry point today in the public markets in the 70s. And I think that Waymo is getting a ton of love Uber's price down and I think the demand that they've created will not go away. I think they can become another competitive player in that market. I'm not diminishing Waymo. I just think that Waymo is overpriced and Uber's underpriced and I am short lived will not be a standalone company in the years to come. Cool. I'm sorry, we did not get to everybody's questions. There's lots of very unique specific ones. Any other quick thoughts, Yann? Eric?

Speaker C: Yeah, my only thought is, you know, it just comes to mind when you say green on Amazon, red on Zoox. Um, it seems obvious that they would repurpose Zoox, um, to be a delivery mechanism for Amazon packages and if that happens that would be very interesting and exciting. Um, but yeah, doesn't seem to be the focus now.

Speaker A: Yeah, that's kind of my let's call it prediction. That and Lyft won't be a standalone company, but it's fun to say hot takes. We just get to do this on the show and the world gets to actually execute. Thanks again, Jan, Eric, this was fun. And uh, everybody have a great day. We'll talk to you all soon.

Speaker B: Smart Humans with Slavo Rubin is a podcast brought to you by the team at Vincent. Any data, text or other content in this podcast is provided as general market information and not as investment advice. Past performance is not necessarily an indicator of future results. For more information on alternative investing, check out Vincent at www with vincent.com.