The new battle for autonomous driving: Silicon Valley civil war

On June 26, US time, Tesla CEO Musk tweeted that Bezos was a "plagiarist". What was the reason for the quarrel between the Silicon Valley Iron Man and the world's richest man? The cause of the incident was that Amazon announced the acquisition of the US self-driving startup ZOOX, which also marked that the e-commerce giant with a market value of 100 billion yuan officially entered the self-driving track.

Recently, Musk, a professional disser, hinted in an interview with The New York Times that Bezos is too old and Blue Origin is too slow to achieve its goal of landing on the moon. Why is Musk so persistent?

Because the autonomous driving track is a golden cake! How can you not be angry when your cheese is eaten by Amazon?

Larry Burns, now General Motors' president, has estimated that if the first company to enter the driverless car field can capture 10% of the 3 trillion miles traveled each year and charge 10 cents per mile, it could generate $30 billion in revenue a year.

What does $30 billion mean? It far exceeds the 24.6 billion overall revenue of Tesla, the benchmark for new energy vehicles, in 2019!

The autonomous driving industry seems to be a gold mine, and everyone wants to take a bite. So the five giants of Silicon Valley have emerged in this field, and they have stepped onto the stage to make various moves in order to occupy the market. So how do they make their moves? Please see the detailed analysis below.

01. The five largest players in the U.S. autonomous driving market

In the US market, Waymo, Cruise, ZOOX, Argo AI, and Aurora are the five major autonomous driving families in Silicon Valley.

Waymo is backed by Google, and is a natural choice. Google started researching autonomous driving in 2009, and Waymo was spun off from Google in 2016 to become a subsidiary of Alphabet.

Google's previous development path was to build its own cars, but after Waymo was established, it chose to abandon the route of building its own cars and began to establish cooperative relationships with traditional car manufacturers. It is indeed too difficult for Internet giants to build cars from scratch. Other car giants can collect road data through their own cars, but Internet companies cannot do so.

On March 27, 2018, Waymo announced that it had become a strategic partner with Jaguar Land Rover. On June 19, 2019, Waymo announced an exclusive partnership with Renault and Nissan. Waymo also began to mass-produce some of its core technologies, lidar, as a separate business, reducing costs while accelerating R&D updates and iterations, and its development has been smooth.

Compared to the favored Waymo, Cruise is a newbie that started late but has the best luck.

Cruise was founded in October 2013 in San Francisco, California. In 2015, it obtained a highway test license from the California Department of Motor Vehicles. In 2016, the third year after its establishment, it was spotted by the giant General Motors, which spent about $1 billion to acquire Cruise.

In 2018, Cruise introduced SoftBank and Honda as new strategic investors. SoftBank invested $2.25 billion in Cruise, GM invested $1.1 billion, and Honda decided to invest $2.75 billion in the next 12 years. With the endorsement of these bigwigs, Cruise's valuation climbed to $19 billion.

Compared with Cruise, which relies on its big brother, ZOOX is more ambitious. ZOOX is the only company among the "five major families" of autonomous driving in Silicon Valley that is not backed by a car company.

It was founded in 2014. Different from other start-ups, the company's strategy from the very beginning was to independently develop and manufacture self-driving cars. To put it bluntly, it wanted to develop an autonomous driving system and build its own cars without relying on giants.

Not only that, ZOOX proposed a car design similar to Google's Firefly - no accelerator, brake pedal, no steering wheel. But ZOOX also wants to build a car that can travel in both directions, in other words, it can drive on both sides. As a startup, it is really ambitious to surpass the giants without money and endorsement.

Trucks.vc partner Reilly Brennan commented: "This is unprecedented hardware design. It's a very bold and expensive idea!"

Compared to the flashy and cool ZOOX, Argo AI is a low-key technical expert.

The Wall Street Journal reported that Argo AI received a $2.6 billion investment from Volkswagen Group, making Argo AI the only autonomous driving technology platform company with commercial partners in both the United States and Europe.

Argo AI has been quietly developing a complete "autonomous driving system". Before the epidemic, it had been busy developing autonomous driving systems and high-precision maps for Ford's new cars in 2021. However, affected by the epidemic, Ford revealed at a press conference in the first quarter of this year that it would postpone the release of its autonomous driving cars to 2022.

Auora also focuses on developing technology but pays more attention to researching systems. Its team is well-equipped. Its three co-founders all came from important positions at Google, Uber, and Tesla, and have all participated in the development of autonomous driving.

Aurora's core product is also very hardcore, called Aurora Driver, which is a combination of software and hardware that can be installed in different types of cars to help them achieve autonomous driving. This system has been successfully integrated into 6 models (SUV, sedan, commercial vehicle, small truck, heavy truck, etc.)

In February 2019, Aurora raised $530 million in its Series B round led by Sequoia Capital, T. Rowe Price and Amazon, which directly raised Aurora's valuation to over $2.5 billion. Aurora has established partnerships with Volkswagen, Hyundai and domestic car brand Byton.

Do you think these five companies will be on their way to success in the future? Oh, you are wrong!

02. Difficulties and obstacles, many problems

At the beginning, Google had the attitude of "I have money, so I can build cars". In 2013, it built the first self-driving car "Firefly". In 2015, the cute Firefly successfully hit the road. Just when Google thought it could roll up its sleeves and do a big job, problems arose internally.

Google's team is obsessed with fully autonomous driving and has neglected commercialization. Not only is the project unprofitable, it's also a money-eating beast!

Secondly, as Firefly was successfully put on the road, Google was so happy that it gave 4.5 billion US dollars as project bonuses to employees. However, after the incentives were paid, senior employees of Google's driverless team became so rich that they almost didn't need to work and left one after another, which caused Google to suffer a great loss.

In addition, Anthony Levandowski, a former star engineer of Waymo, stole trade secrets and brought the secrets to Uber through acquisition. A lawsuit of the century was launched between Google Waymo and Uber. In the end, Uber paid $244 million in compensation to settle, and the engineer himself was sued by Google for $179 million in liquidated damages (about RMB 1.2 billion).

Not only Google, ZOOX and Cruise also have many problems.

In 2019, Tesla filed a lawsuit against ZOOX and several former Tesla employees (who left Tesla and joined ZOOX), accusing them of stealing information related to its WARP system in late 2018 and early 2019.

Later, due to the epidemic, ZOOX was forced to stop testing vehicles on public roads in San Francisco and Las Vegas, which caused the plan to launch self-driving cars this year to fall through. ZOOX fell into a slump, and Amazon announced on June 26 that it would acquire the self-driving technology company ZOOX, and ZOOX has since been sold to Amazon.

Image source: Google

At the same time, the epidemic also affected Cruise. In order to survive the difficulties, Cruise laid off 150 employees in May.

The 2020 epidemic has brought a chill to the autonomous driving market. Previously prosperous autonomous driving companies have been hit hard, and have chosen to lay off employees, sell themselves, or seek external financing.

However, the reason why companies researching autonomous driving are going out of business is not just because of the epidemic, but also because the industry itself is full of doubts and has high technical barriers.

According to ANSYS's Global Autonomous Driving Vehicle Research Report, about 59% of respondents believe that autonomous driving is not safe and may cause car accidents. Although many companies developing autonomous driving like to paint a rosy picture for customers, saying that autonomous driving can allow people to take their hands off the keyboard and play King of Glory to reach their destination directly.

But there are always people who question its safety. What if someone is hit? What if there is a problem with the program? After all, there is no one behind the steering wheel, so some passengers still feel nervous.

Secondly, driverless cars will involve privacy issues. Because driverless cars need to be equipped with video cameras and controlled by software, the authors of "Driverless Cars", Hudi Lipson and Melba Kuman, think that cars may become "robot spies."

After all, any software operating system is vulnerable to malicious intrusion and may have security holes. 42% of the respondents also expressed concerns about this.

As a passenger, the biggest concern is safety and privacy. However, whether safety and privacy can be protected depends largely on whether the technology is mature. So what is the core technology of autonomous driving?

First of all, Huatai Securities believes that autonomous driving can be divided into four parts according to driving function modules: perception, decision-making, formulation and operation. In simple terms, the car first determines the terrain and road conditions through cameras and map radars, and then makes judgments based on the specific situation to avoid obstacles and crowds.

Guosen Securities believes that V2X technology is the core technology of autonomous driving. Simply put, the car model equipped with this system can always observe the situation on the road in the autonomous driving mode and automatically choose the best driving route. In addition, by using on-board sensors and camera systems, it can sense the surrounding environment and collect data. For example, it can avoid vehicles and crowds, thus achieving "zero traffic accidents".