Editorial Notes

Dear Reader,

These are very hard times for self-driving technology developers. Progress has been grudgingly slow and exceedingly more difficult and more costly than expected. Revenues from self-driving vehicles are nowhere close at hand. Because of this and the additional challenge of rising interest rates, investors are waving off anxious pleas for additional funding.

Carmakers have scaled back self-driving projects in favor of ADAS and electric vehicle development, while having to stand up large in-house software development organizations. In the fall of 2022, Argo AI, the autonomous vehicle developer backed by Ford and Volkswagen, announced that it was closing. "Profitable, fully autonomous vehicles at scale are a long way off," said Ford CEO Jim Farley, in a statement released last October.

While the business case for personally owned self-driving vehicles can't soon be made, there has been a very good business case made for robotaxis. Despite the very high cost of the self-driving technology needed to convert cars into robotaxis, rides were projected to cost less than a bus or subway ticket. The business case was solid.

And yet, robotaxis developers are also seeing hard times. Waymo and the Hyundai-Aptiv joint venture, Motional, have been forced to lay off workers. That followed Intel's IPO of Mobileye in October of last year, presumably to devote its cash reserves to building new chip-making capacity. Robotaxis are an opportunity for self-driving component suppliers to earn some revenues despite the high initial cost of their products, particularly lidar sensors and high-performance computers. The emerging self-driving ecosystem will have to find a way to survive without meaningful revenues for a while longer.

Sincerely Yours,

Paul Hansen

Editor

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