This is a fantastic read. But don't agree with the conclusion. It's myopic.
Few problems I have with this,
- The cost saving of 600K/truck/year is low relative to the cost saving with lower autonomy. When improving efficiency in any operations system, the ROI keeps getting lower and lower with further improvements. Does not mean that the investment is not worth doing
- The efficiency principle of software relies on scale. There's no reason to build autonomous vehicles at all if you own a single truck but this makes sense when you have a large fleet. That's why software earns with scale. 600K/yr is a single truck saving. It becomes significant over the scale of trucks and the years.
The unit economics is wonderful to go through. Appreciate the research!
> The hardest 1% of the technical problem, automating the surface streets and interchanges, would end up being worth only about $600/truck/yr. Level 4 truck autonomy has less value than a daily coffee.
Note that savings is $600, not $600,000. For a $100K truck, that’s 0.6% per year. Not nothing, but they’re happy to let someone else do the Herculean effort to get to L4.
For each programmer on a team that could do it in a year for, say, $240K in comp, you’d need 400 truck-years ($40M worth of trucks for 1 year) to make it a break even proposition. How many programmer-years do you think it would take to build L4 autonomous trucks? How many programmer-years have FAANG alone (leave out auto manufacturers or taxi apps) spent over the last decade on autonomous driving?
Autonomous trucks are just some minor differences from Autonomous cars. No auto manufacture dares risk someone else come out with an autonomous car that is enough safer than human drivers that governments mandate it. This is mostly about all the patents needed to make it work that the first mover will get. As such all car companies are investing in this to ensure if someone makes it works they will have it too, or at least enough useful patents that they can get a good licensing deal.
I think Tesla is the only company attempting this alone, all the other car manufactures are just in some form of partnership with others. These partnerships are known to include the big truck manufactures. I suppose there are a few car companies not investing in this (either tiny, or not selling cars in western countries).
The unit economics is wonderful to go through. Appreciate the research!