Happy 250th birthday, America. Walt, we've had 250 years of freedom with no tyrants. Lots of ups and downs, but we've had freedom. So, happy birthday, America. As we celebrate the 4th of July, Tesla decides to do what any great American company would do. They branded the Cybercab in America 250 Freedom. And lo and behold, Tesla puts up a video on X. There was a passenger in the Cybercab with no wheels, no pedals. Tesla has self-certified it as SAE level four due to the current regulatory environment. They cannot charge yet. That is the key. And then the World Cup's been fantastic. US had that great win this week. And Waymo's been running ads and saying, "We're safer. We're safer. We're safer." But you can't take it to all the games. That's something to watch there. And then lo and behold, the US government says to Polestar, "Too many Chinese components. You're banned." And the big news, the reason we have the inspector hat on, and I'll put the other one on later, is that we broke the news that Waymo and Uber got divorced in Phoenix and some very nice outlets credit us to it. And some other outlets, not so nice. And we've got a jam-packed week. So, let's start it off, Walt, with the drama.
I was going to chide you and say, "No, that's a baseball cap." Then I realized that this is part of your new merch where you have Inspector Clouseau on your baseball cap as opposed to the traditional Inspector Clouseau hat, which I think I might prefer slightly. Um, but yeah, you do deserve a clappy hat. I mean, this all started over the weekend when I just... And by the way, you didn't even like send me a text or anything. I just see a post. I think he might have tagged me in there saying like this looks like, you know, Waymo and Uber are done in Phoenix. And I assumed it was Omega, but this is just Grayson's kind of, you know, diligence and checking this stuff, putting out whatever product is. So there's your clappy hat there. We, you know, we reached out to Alex Roy who I think lives in Phoenix. He came back with some feedback. Couldn't find it on the Uber app. So, thank you. Thank you, Alex Roy. Takes a village. Um, but then, so then like, so I obviously reached out to Uber, got confirmation from Uber, posted that, and then of course like an hour or two later, the press starts to kind of zeroing in on this because we put our stuff up on Bloomberg and a couple other places. So, um, I don't know. I mean, again, thanks to CNBC and I guess TechCrunch, I don't know. Bloomberg kind of, you know, I think other news reports just failed to kind of mention this. Um, which is unfortunate, but whatever. We're still out there. And again, if you're listening to Autonomy Markets and following our Twitter feeds, you're going to get that information first. That's the bottom line. So, anyway, nice job. Nice job, Grayson. There's a little bit of a teamwork on that getting the confirmation. Um, why do you think it was so quiet? And then we'll get into the details of what exactly was killed.
Well, first and foremost, clappy hat to us. And yes, we are pretty active on X and we have an opinion from time to time and we share that wonderful information with the autonomy community. The reason why I believe that it was quiet, Uber doesn't want the drama. The way that Uber did it was very interesting. No press release, no post on X, no blog, no nothing. Merely just updated the website to say those vehicles are unavailable in that market. Done very quietly. And then lo and behold, after all the news broke, you've got the Uber bulls coming out in full steam. There's nothing wrong with this. There's nothing wrong. It was very, very small. It was only 12 vehicles. Yes, it might be small, but the pilot lasted, if you want to call it a pilot, that's what the technical term was, 948 days. And why is that relevant? Because Austin has been going on for 482 days and counting, and Atlanta's been going on for 370 days and counting. And if you follow the breadcrumbs that we've been following, I believe that Austin and Atlanta are the next dominoes to fall. And then when that happens, what do the Uber bulls say? Where do they go?
Um, well, a couple things. I did use some AI to go back to past comments made about Phoenix. And to be clear, Uber never has overstated, you know, what the experience was like in Phoenix. I think the problem is most people, or the issue is that most people when they went to Phoenix, they weren't going to bother like trying to get it through an Uber app. They just went to the Waymo app because Waymo runs a much larger and separate fleet, which we've talked about in this podcast. I know, you know, again, for longtime listeners it's not a surprise to you that there were two separate fleets in Phoenix. One for Waymo and one for Uber. I guess we didn't really key in on how small that fleet was. And I guess my first question, uh, Grayson, 12 cars, the service area is 180 square miles. You could say that if you're Uber, hey, we ended this because we've, you know, got what we needed out of this trial. But like, what do you really learn with 12 cars in a 180 square mile area? Like what are the possible learnings there?
Very little. Because if you're over 180 square miles, the data that you're going to gather is going to be minuscule. You can't sit there and argue to me, oh, you're going to learn wait times, you're going to learn patterns. To me, the learnings are very minuscule. Perhaps this is an assumption. Perhaps you learned fleet management for those 12 vehicles because they have to go sleep somewhere at night and they have to be serviced. Perhaps that was the learning. But if you look at it from an overall market learnings, I would say that they're extremely small. Very small.
Again, to Uber's credit, they've already, you know, they've always profiled Austin and Atlanta as the kind of the real markets and characterized this as small, just, you know, 12 cars was super small. Um, I guess my second question is why now. You on your rant, you rattled off like a couple different numbers, 900 whatever days. Like, can you express that in months or years? Like, so again, Uber said they terminated it. Was it the end of a contract? Like, why? I guess the simple question, Grayson, is why now? Why do you think this occurred now?
I believe it is a series, as I said earlier, a series of dominoes that are going to fall and it is the first off-ramp for untangling this partnership. Perhaps it was the end of a contractual agreement. We don't know. I'm just assuming. Perhaps the partnership, if you want to call it the partnership in Phoenix, ran roughly three years. Austin is going over a year and a half and Atlanta is barely over a year. So perhaps those markets are also coming to an end contractually. It just seems odd to say the least that the timing... And another thing that I put the suspicion inspector hat on is that we get a post on X. Dara is visiting Nuro going for a ride in the vehicles. And then today we get a post from Alex Kendall at Waabi. Dara is there with Alex and the CEO of Nissan at a World Cup game. So the news comes out and then all of a sudden Dara is out with two additional partners. I know I'm reading between the lines here, Walt, but that's very interesting timing of these photographs being released and everything is calculated and released for a reason in my opinion.
So, there's a lot to unpack there and you move forward here a little bit. So, let's go back on the 900 days or three years. You know, when Dara has talked, this is from memory. Um, so I may have this wrong, but I'm pretty sure when Dara has talked about, you know, length of agreements or maybe also current CFO Belgi, um, you know, one or two year things, they boasted, but the fact that they weren't long agreements, it's possible that they had a one-year agreement that continued to extend and extend and extend. The challenges in this relationship have occurred for a while. Like, I'm not sure why you don't do that all at once. I don't know why this has to be a quote unquote domino effect. So, I don't think you really answered that question. I'm not saying that I have the answer, but like that didn't really give me the answer of why now. I'm not even sure why now. I mean, it's kind of a dead news week, right? You can kind of quietly get out of this, but you had to know that like if you're no longer operating in Phoenix, that was going to hit the market. So, I think at some point you just rip the band-aid off. And with 12 cars, the reality is you're probably not learning that much. So, what's the point of like, you know, maintaining that in the market? Now, some may suggest that, well, they're ready to put someone else in there. And you talked about Dara doing a video with Nuro, and I think there was another one to your point in the World Cup with Waabi. Neither of those companies are going to be prepared to backfill into Phoenix anytime soon. Like Nuro, who, you know, we're huge supporters of, um, you know, it is going to be a huge success for them to deliver 100 cars, 150 cars in California, their primary market, which is where Dara was taking this ride, the same location that, you know, that I've hopped into those cars in Cal. That's a huge win and would enable them to raise money and perhaps, you know, foreclose other competitors in the market because of their success. They also have announced Houston. Like, so my point is like they're kind of one of the winners out there. You're obviously not bringing WeRide into the United States. So like who specifically do you think you're backfilling, Zoox? Like who in the... So anyway, I'm not saying Uber has claimed this. I'm just saying this is some of the bull thesis. Oh, they shut them out because they got someone else they're going to place in there. Like, great, they can make an announcement, but who can deliver 150 or 100 cars even to Phoenix, you know, within the next six months? Is there anyone out there that can do that, Grayson?
You asked about why not just rip the band-aid off all three. What we do know for a fact, Uber has confirmed this, that the fleet they managed, they own the fleet and they managed it outside of the Waymo fleet. We do not know the fleet integration. So, I think there's something to watch for potential asset ownership in those other markets. As it relates to Phoenix, I will ask you this. Bloomberg reported today, Lucid went through a major restructuring. So, I'll ask the question, where are the vehicles going to come from?
Well, that's what I just asked you. I literally just asked you the question. So, you're just doing a Jedi mind trick here and trying to flip it back on me. I literally just said, you know, in Phoenix, who can replace them within six months? Like what vendor is ready to do that?
No one. No one. There's the Jedi mind trick for you. No one. You could sit here and say, well, oh, Stellantis can backfill it, yes, but the Waabi tech has not been validated for L4 in America, right?
Right, that's my point. Like, you know, who's going to deliver any type of, even with a safety driver there? I mean, I guess you could argue AV Ride could shift some of their cars over, but you know, just go back to past episodes and our experience with where AV Ride is, um, you know, in Dallas, you know, and how that's performing. Going to, you know, head back to Texas in a couple of months now to re-evaluate it. But, you know, the answer is that that is not the answer. And again on the Lucid thing, the tie-in here, Grayson, was not about whether they are going to be in Lucid, Nuro is going to be in Phoenix. The tie-in is that Dara is dropping his video with, you know, Jia-Zhou, CEO, co-founder of Nuro. Great. Again, big supporters, but like, and this is a topic that we've talked to the company about before. They're partnered with a company, Lucid, which is clearly struggling, right? They reported numbers this week that were below expectations on the EV side of things. Um, they brought in a new CFO among other executives. You know, you have to, there is a lot of integration work that you're dealing with the company. Like I get that they are an Nvidia shop and like kind of good to go and it's a nice high-end car. Um, and look, and Nuro is going to sign up additional OEMs for sure, but the challenge, this is part of the challenge of autonomy, right? There are so many different pieces that need to work together in unison, you know, to get to a winning finish line. And like I don't think you can totally discount, you know, the additional headwind that Lucid, you know, provides to this partnership, unfortunately, because I think that obviously the sensors and the technology are working great. It is an unfortunate situation. The question is how much longer will the PIF, which are the majority shareholders, put up with this? Is this the last restructuring perhaps? I'm just assuming that. And I'll throw a curveball at you. We look at this. Could potentially Motional be the Uber partner for Phoenix because they have over 100 vehicles, visited them in Vegas, that they could potentially ship some of those right down to Phoenix from Las Vegas. And they're manufactured by Hyundai, but as we know and we've talked about in depth, those vehicles come from Singapore, not from Georgia. So perhaps they try and backfill with that. That's a little bit of a curveball there.
Yeah, you're doing like the double Jedi mind trick on me now. So now you do have an answer of who could backfill in Phoenix. I don't even know. Like maybe they don't even feel pressure to Phoenix. Maybe this is like going to be a dying news cycle and like who cares and they just move on with life and whatever the third market is that Nuro announces or Waabi, or that they announce with Waabi has nothing to do with Phoenix and this just life is what it is. Let's go back one and just close on this topic. Give me your specific timeline for either, I'm not even going to tie you to one of this one or the others, not Austin or Atlanta. When does a divorce happen in Austin or Atlanta between Uber and Waymo?
I'll go on the record and say that I expect it to happen by Q1 2027 at the latest.
At the latest. Okay. And I'll footnote one more thing on this. When that news came out, like Uber stock didn't really get crushed, right? I mean, Uber stock is already down on the concerns of autonomy. And I think, you know, while we, when you and I first started talking about this issue with the relationship when many other people thought it was like rock solid after Austin and we kept kind of picking at the scab so to speak. Um, but I think, you know, based on our listeners, which are kind of the best listeners in the industry, um, the movers and shakers, like I think it's basically in the market, right? Meaning that like I think people realize that the Waymo Uber relationship, you know, is only potentially now upside in the future when this view is that, you know, after, you know, many years perhaps where Waymo puts out 100 cars, 100 cars, 100 cars and all of a sudden they get manufacturing and they drop volumes of cars into each of these markets. Maybe then at some point in the future, you get to the kind of Jason Kana's bull case theory where, well, you have to find demand somewhere. So then they just start putting their cars, you know, to fill it with demand because why not, right? Which again is a logical thing. We're just not close to that event happening. We're going obviously the opposite way right now.
And I think, you know, I'll take the opposite side of what Jason says. I think consumers are going to want a consistent experience and they're not going to have a problem downloading an app that gives them a consistent experience. And once the brand is established, the consumers will just become a habit. Just like Uber's a habit for some individuals, go in the Tesla app, the Waymo app, or insert your favorite robo taxi name app is going to become a habit and the demand narrative is going to continue to fizzle out.
Now, let's talk about something that's not a divorce because there was never a marriage and that is Tesla with the platform companies. Um, there might not even ever have been a flirtation or a date or a one night stand for that matter. Um, I think in general Dara has kind of flipped back and forth and like, oh, we're open to anything and, you know, we'd love to put them on the network and then at one point kind of denigrated cars without, um, LiDAR. Uh, David Risher, CEO of Lyft, not exactly in the strongest position of a company right now overall, you know, takes it a step further and, you know, posts a blog that they published a what they call a multi-sensor safety standard for Lyft. One sensor type doesn't make the network and basically, you know, like an attack on Tesla. I think it's one of these things is like you can't fire me because I didn't quit. We can't get divorced because I'm not going to marry you. It's like, you know, when Tesla, if and when, I know there's people that believe it'll never happen and those that believe it's going to happen in mass overnight, but if anything happens there, they're not going to partner with Lyft or Uber. And now these, you know, now basically Risher's got the cover like, well, we don't want anything that doesn't have all these different sensors. I was told that, you know, Tesla's been around for whatever a year in Austin. And obviously you and I use FSD. I was told that like, you know, there was going to be a really fatal error on this system. Even with a limited number of cars in the first month of this thing being here, we are a year in, right? FSD is what it is. Even this thing that caused a lot of noise last week where someone was accelerating into a building. I think you've seen that person. I think that person was then arrested for manslaughter because, you know, it was in fact not FSD. Now granted on the flip side they haven't gotten there, but I think, you know, we can rest assured, not that anyone believed otherwise, that the Tesla and let's say platform companies, Lyft and Uber, are going to be non-existent. But in the meantime, what was happening at Tesla this week?
Cybercab hit the roads of Austin with an individual who based on regulatory environments I'm under assumption is a Tesla employee cruising around the streets releasing video. Looks good and it's branded for America 250. So, smart political move by Elon there. But Cybercab is hitting the roads getting one step closer to deployment. And why do I say one step closer to deployment? Because Tesla this week released a first responders guide for safety of how to operate on the vehicle in the case of an incident. It is another sign it's getting closer and closer and closer to deployment.
Okay, so again, let's go back on the car itself. Just to be clear, in the Cybercab, there's no wheels, there's no pedals. Um, the Texas, I think, Department of Transportation has confirmed this is a controlless design. If there's no wheels or no pedals, Grayson, what exactly is the safety monitor doing in the front seat? First question. And then second question is I've lost track of your definitions. Does this count as a robo taxi if you have a safety monitor either in the driver or passenger seat? I guess there is no driver seat in the Cybercab.
It is not a safety observer because there is no way for the individual to take over the vehicle. So it is not a safety observer. It is an individual that is testing the technology. So it is a fully autonomous vehicle with individual testing because they do not have the ability to grab the wheel, hit the pedals or take over the vehicle in any manual form.
So what's the point of having the person there? What can they actually do?
The person there can only hit a button just like you and I are in the vehicle. Hit a button and pull over. That's it. To me, it's just you need to look at it as a signal that Tesla's getting closer to putting this into the hands of the public. And when they do put it in the hands of the public, not to go in a regulatory row, they're not going to be able to charge until they get the exemption, but they'll be able to put individuals in the vehicle.
Got it. So, now let's get to the second point because you were so excited to get to both points at once. The first responder guide, which again, in your terms, more signal about what this means. Now, you know, you and I were both at that plant in Texas. We saw the lines. We saw that exact line where that Model Y was getting signed by all the employees came off the line and the capabilities. We went to, you know, parking lot locations in Texas where we saw tons of Ys and obviously the Cybercab starting to stack up. Like, so this is like they hit the milestone of this Q2. Now, just to be clear, they're not hitting production volumes day one. That will obviously ramp over the next couple quarters. And as a reminder, we also saw the location where more capital equipment is going to go in and more Cybercabs will be generated. So, they're still showing the outward signs that, hey, we believe in the technology enough that we're going to continue to crank out these cars. That doesn't necessarily guarantee it's going to happen. What I'm building to, Grayson, is with your signs with the first responder guides where they're working with people to, you know, to deal with this in Miami or whatever. Um, and the signs that we're seeing, like, is it possible that what we've been waiting for all along is they're like, look, there's no reason for us to put a bunch of Ys in the market. It's too expensive. Let's, you know, we're believers in the Cybercab and they've just been waiting for TIG to tee off in the Cybercab before they drop the, you know, our Autonomy Markets guideline of 100 cars in a market, um, you know, in Austin. And is this what we've been waiting for all along or are there still safety issues that they're hashing their way through?
I think you're spot-on correct. I do not believe, I'll say, I'm not a safety engineer. I do not believe that there are safety issues holding this back. I believe based on it is regulatory that is holding Cybercab back and I know that for a fact because you can look at the federal register and see it. What I do believe is that as we have seen with all the photos and all the documentation that's available online publicly, they're clearly ramping up Cybercab. And you say, well, why is that? Because on the federal side you are getting movement on regulatory. We are getting closer and closer to a federal framework that will allow Tesla to legally deploy Cybercab in all 50 states. And drum roll please, charge for rides. That benefits Tesla. It also benefits Zoox and it benefits any US domestic manufacturer of an autonomous driving system that wants to deploy a fully autonomous vehicle with no pedals and no wheels. So, we're seeing that really good regulatory movement which is aligning with the manufacturing movement. And then it is my assumption that once there is a regulatory certainty signed into law, that incredible factory that you and I walked at Giga, you're going to see that thing ramp up pretty substantially. And yes, I do believe you're right. Then all of a sudden you're going to start to see Cybercabs flooded in pretty decently large numbers. And when I see decently large numbers, I will give you a confidence number. You're probably 100 to 150, maybe 200 in a handful of markets to start and then you'll start to ramp from there.
Well, I hope you're right. Um, I might not be as confident as you in the moment. We'll see. Um, frankly, I prefer that they were Model Ys. I find that to be a more comfortable car to ride in. I wouldn't, I hope that the robo taxi fleet is not going to be all... I'm willing to pay a premium, but you know, I get it. You know, you got to get your cost low and the cost quotations for these new Cybercabs are quite low and we've seen it. We see how they get there in terms of the specifications. But it does bring up another question, Grayson, that I have, is a lot of times when we talk to the engineers at these various companies, some have asserted that like when you move from vehicle to vehicle, there's still got to be some testing around that whether you change the sensors or not. So the Cybercab has a different physical footprint, lower to the ground clearly than the Y. Is there some process of time or miles that need to be logged, do you think, before they can unleash the Cybercabs in the market?
I believe they've already accomplished it because what you and I saw and what's been documented on X, they've been driving the Cybercabs around with steering wheels and pedals and you've seen the validation vehicles with the ground truth light on them. I believe in certain markets, let's use Austin for example and perhaps Dallas where we have seen some photos, those markets are relatively close ready to go. I would say Austin obviously for a lot of reasons is further along than Dallas. But if I give you a rollout, I'll give you a prediction. It'll be Austin, Dallas, Houston. Uh, and then it's either going to be Phoenix or Miami in terms of a rollout in the markets getting ready.
