Four highlights behind Waymo’s first round of US$2.25 billion financing

[Yiou Introduction] On March 3, 2020, Waymo received its first round of financing of US$2.25 billion, equivalent to approximately 15.6 billion yuan. This is also Waymo’s first financing in the 10 years since it invested in the field of autonomous driving. After this financing, the game between Chinese autonomous driving companies and Waymo will become more intense.

Waymo’s first external investment was mainly led by Silver Lake (Silver Lake Capital), Canada Pension Plan Investment Board and Abu Dhabi’s sovereign wealth fund Mubalada. Other investors include auto parts supplier Magna? International (Magna) and Andreessen Horowitz, as well as auto retail giant AutoNation and, of course, Google parent Alphabet.

The new investment will be used for employee recruitment, technology development and global operations. Affected by the Federal Reserve's interest rate cut and Waymo's financing incident, Google's stock price fluctuated by 4.78% in a single day, with an after-hours market value of US$954.716 billion.

Google market value on March 2, 2020 (Eastern Time)

Waymo CEO John Krafcik also announced that Silver Lake and Canadian pension funds will join the company's board of directors. Although Waymo received its first round of financing, Google did not announce the company's valuation after the financing. But judging from the amount of first-round financing, Waymo’s current valuation is likely to exceed Morgan Stanley’s valuation of $105 billion in 2019.

Yio believes that the main reason why Waymo won this round of large financing is that Waymo’s monetization has begun.

Compared with carpooling, the cost advantage of self-driving taxis is very obvious. This is a classic example of a technology/capital-intensive business model replacing a labor-intensive model. The current price of a self-driving taxi for a 7-mile trip is about US$8.75, which is only half the price of today’s Uber, Didi and other travel companies, so ARS can quickly capture market share.

According to Seeking? Alpha's prediction, there will be 30,000 self-driving service vehicles in the United States in 2021. Based on 50 paid trips per day, each trip is about US$8.75 and operates 350 days a year. According to this valuation Each ARS vehicle is expected to generate approximately $150,000 in revenue per year, and the overall U.S. ARS market will generate more than $4.5 billion in revenue.

US ARS Market Forecast

With the continuous improvement of autonomous vehicle production capacity and the rapid increase in the mileage that can be driven, by the end of the first phase in 2025, the United States will use approximately 75 10,000 autonomous vehicles provide ARS services on 2% of the miles driven in the United States, generating nearly $100 billion in revenue. At this time, ARS will seriously encroach on the ride-sharing market, which is why Uber and Didi must enter autonomous driving if they want to survive. At present, Waymo already has the first-mover advantage and is far ahead in commercial operations among all autonomous driving companies. It is not surprising that it has received high financing this time.

Based on the above, Yiou has the following four major points of view for this round of financing.

1. Waymo’s two major scenarios: autonomous driving + freight delivery

So far, Waymo Driver has driven 20 million miles on public roads in 25 cities. It has driven 10 billion miles in simulations and is far ahead in the field of autonomous driving. Even the second-ranked General Cruise cannot keep up.

Waymo’s two major scenarios: autonomous driving + freight delivery

Needless to say, Waymo’s autonomous driving rental business is a globally recognized leader. Waymo One, the world’s first public self-driving ride-hailing app, serves thousands of customers in Arizona and is already offering thousands of fully autonomous rides in a high-speed mixed-use market larger than San Francisco. Driverless services.

Waymo One currently has more than 600 vehicles for users to use, but Google did not disclose the total number of passengers served. Waymo revealed in December 2019 that more than 1,500 people use its self-driving taxi service each month, and that since launching the program in 2017, it has taken more than 100,000 total trips.

It is worth noting that Waymo officially announced freight-related plans and will begin testing self-driving trucks-Waymo Via on the roads of two states in the United States.

If China’s self-driving companies could still avoid their dominance in self-driving rentals before, then now it is inevitable to start competition across the board. Domestic companies specializing in self-driving freight rentals, such as Tucson Future, Inceptio Technology, and White Rhino, will have a more severe living environment.

TuSimple’s current self-driving freight testing in the United States is mainly in Arizona and Texas. In May 2019, TuSimple announced a cooperation with the United States Postal Service (UPS) for its autonomous driving in Arizona. Freight services are provided on more than 1,600 kilometers of transportation routes between the Postal Service Center in Phoenix and the distribution center in Dallas, Texas.

Waymo has been learning how to drive large Class 8 trucks since 2017 and is currently testing its fleet of trucks in California and Arizona and will soon expand to Texas and New Mexico. In addition, Waymo will expand Waymo Drivers to help with local deliveries in cities and towns.

Waymo?Via

2. The world’s first L4 autonomous vehicle factory completed the first batch of deliveries

Since Waymo announced in April 2019, it will cooperate with Since Magna and American Axle & Manufacturing partnered to build the world's first mass-produced L4 autonomous vehicle factory in Detroit, Michigan, Waymo has now delivered the first batch of integrated fifth-generation autonomous vehicles. Hardware, vehicles (electric cars and Class 8 trucks) with new, more powerful computing and perception capabilities. This marks that Waymo's self-driving vehicles have achieved initial mass production and will further promote Waymo's commercial deployment capabilities.

Waymo is preparing to significantly expand its operations in the coming months. It will add 62,000 Chrysler Pacifica vehicles to its fleet and signed an agreement with Jaguar Land Rover to equip its system with 20,000 Jaguar I-Pace electric SUVs by 2020.

3. The cost of lidar has been reduced by half, and its performance is “unparalleled”

The most important hardware device for current autonomous driving is lidar. Waymo’s long-cycle, short-term R&D of lidar that began in 2011 has finally paid off. While most autonomous driving companies are constrained by the cost of lidar, Waymo's internally developed lidar has significantly reduced costs and made it a separate business branch in March 2019.

On March 4, 2020, Waymo officially released its fifth-generation Waymo Drive, redesigning the hardware sensor suite of the autonomous driving system, such as lidar, cameras and radar, and simplifying the design and manufacturing process. Not only is the cost half that of the previous generation, but as one of Waymo Driver's most powerful sensors, it can also draw a 3D picture of the surrounding environment. It is the world's first imaging radar system for autonomous driving, providing "unparalleled" resolution. , range and field of view, the entire scene can be seen at once.

Fifth-generation Waymo Drive

Traditional automotive radar is capable of tracking moving objects, but Waymo’s new imaging radar has higher resolution and enhanced signal processing capabilities to Better detection and tracking of moving, barely moving or stopped objects.

Waymo has now manufactured the first batch of new-generation sensors and integrated them into the Jaguar I-PACE platform, and has completed comprehensive module-level and system-level testing to ensure that the next-generation hardware can Withstands all types of road conditions (from stormy weather and salt spray to extreme heat and dust)?

Doubling the number of employees

About two-thirds of Waymo’s employee structure in 2019 were engineering and technical personnel, reflecting the company’s focus on research and development. In comparison, other sectors are generally smaller.

Waymo employee structure in 2019

A recent report from The Information showed that the number of Waymo employees almost doubled in 2019, from 950 to 1,500.

Judging from the current job demand on Waymo’s official website, the job demand for software engineering far exceeds the demand for other positions. This also shows that Waymo has invested more labor costs in the fifth-generation autonomous driving system. Waymo is still a "startup company" that is entirely based on technical talents.

Waymo recruitment needs in 2020

Conclusion

At present, it seems that autonomous driving at home and abroad has begun the next round of boom. At this time, Waymo is also working with other regions Autonomous driving companies have launched a comprehensive competition.

To borrow an evaluation from an industry insider: "There is only one question now. Do Chinese autonomous driving companies still have the chance to compete with Waymo like Didi and Uber back then?"

The opportunities are great and the challenges are even greater. At this time, domestic autonomous driving companies should not just stick together to keep warm, but should become partners in the future. Only then can they increase their chances of winning in this game.

This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.