Walt, this week the foreign autonomy desk is the star of the show, and I know you're very, very excited to tell us about your beloved Eagles and their win and your adventures through Manhattan with Tesla FSD. Then there's the Waymo beep-beep issues around depots and Uber's launch service in Abu Dhabi with WeRide fully driverless. Let's start in the Middle East. Foreign autonomy desk starts now. What do you think?
Well, first of all, you know, the Eagles are coming off a loss to the Dallas Cowboys. So I'm hoping the reason you're talking about the Eagles win is because we release this on Saturday and hopefully they will have one on Friday against the Chicago Bears, because our recording time is before that game has happened. So I appreciate that good karma. But yes, let us move from the streets of Philadelphia to the streets of Abu Dhabi. Big win, I think, you know, for two companies really, Uber and WeRide, you know, launching service in Abu Dhabi. That is the first market outside of the United States where Uber has had a market, and for WeRide obviously a big win. And you know, if you look at that press release, that joint press release, there's a picture in there which you can see behind me, that is a ton of cars, Grayson. This is not a five or 10 car launch. It appears that there are a ton of cars that are launching. So what are your initial thoughts?
Not to paraphrase somebody, it's huge. The launch, that's a lot of cars. Positive step for Uber. Just to clarify, it is their first fully driverless launch outside of the United States, because they have had other robo taxi launches, but they've had safety drivers. So there's no safety driver, no safety attendant. So good move for Uber on there. It is a very positive step. And let's go back in time. WeRide first started operating in Abu Dhabi in 2021. Four years to go driverless. Long time, but they did it. But it's another catalyst of Uber's expansion through the UAE and Europe.
I think it also gives Uber an opportunity to flex that they are in fact a global company. A lot of times we get, you know, tied up in the drama that exists with Waymo in the United States. Obviously still a very important market for them, but a good opportunity for them to flex that. Also, Grayson, I noticed that the cars back here are more like minivans, more of the form factor that I appreciate. I know you're not as high on those types of cars. What are your thoughts on the form factor?
It's amazing what you can do when you have government subsidies to build vehicles. That's what I'll say on that. On the form factor, it works. It's practical. Is it my favorite? No. Somebody should go raise the ghost of Lee Iacocca because the minivan is back now. Somebody's got to do the Town and Country version. Then we're cooking, Walt. Now we're cooking.
I mean, it looks kind of like a Town and Country. It looks kind of generic, but at the end of the day, it is utilitarian. It's comfort. It's, you know, it's the room you need. Maybe it's going to be more about shared rides than individual rides there. Grayson, it's not just the expansion of going driver-out in Abu Dhabi. WeRide reported earnings and you covered it. What did you uncover in the earnings report?
For me, you know, there's a lot that they said. There were two things that stuck out. First, on the remote safety driver, which they hope to at some point get to 10 to 1, meaning that for every 10 WeRide cars on the road, you'd have one remote driver there for those moments that the car can't figure out what to do. It's still at 3 to 1. So still some work to do there from a technology perspective. 3 to 1 is still good. 10 to 1 is at least that company's target. The other big thing was the update on the supply, meaning the number of cars that are in the market. So as of the third quarter, they had 1,600 autonomous vehicles in the market. For context, the last quarter the number was 1,300. The quarter before that was 1,200. So really since the first quarter, they've only added about 400 autonomous vehicles. And within the subset of those 1,600 that are on the road, only 750, or less than half, are robo taxis. And that supply has only grown from 500 to 750. So when we talk about the importance of supply, and you've heard us all talk about this a lot in the context of Waymo, let's look at WeRide here, which is again 1,600 total, 750. That compares to what, 2,500 that Waymo has. And frankly, the growth trajectory from this Chinese technology company is frankly just not as steep as what Waymo is delivering in the market.
Why do you think it's so slow? And then I ask that too. One, the ramp is slow, but then it's seemingly the press department at WeRide is on a roll here, announcing new markets. And this goes back to where the vehicles are going to come from. And in terms of where the supply comes from, I mean, WeRide is heavily sourced through Chinese OEM partners like, is it GAC or GAC? I'm not even sure how you pronounce it. Waymo, well documented in terms of Jaguar, Zeekr, right? Chinese as well as waiting for Hyundai. And also when you think about it, when WeRide is scaling, I don't know how many of those cars that they will scale with these Chinese OEM partners, whether that applies to all these additional markets which WeRide talks about, whether it's, you know, Zurich or Belgium for the Robo Bus or things like that.
Is the Robo Bus still a thing? Are they still doing that? Because the vans hypothetically could replace the Robo Bus.
I don't recall if they gave a breakdown of them. I mean, they certainly showed the pictures of them, and there's important... I know you recently did a podcast with Glideways in terms of the need for smaller vehicles in terms of mass transportation, not larger vehicles. So there wasn't a breakdown of the 800 or 900 or so autonomous vehicles that are not robo taxis between buses and vans. I mean, I'm kind of sold on the Glideways concept of over time needing smaller vehicles on demand as opposed to larger vehicles.
But that's a very valid point because if larger vehicles were the answer, this is just hypothetical, Toyota would have scaled the e-Palette much faster, which is a 14-person van. But staying on the theme of scaling, WeRide's biggest Chinese competitor outside of Baidu, Pony, they're expanding with Bolt. What have you learned about that?
Well, Pony also reported earnings. And again, since we're talking numbers, and this should be fresh in everyone's mind when you put the context of those numbers, Pony's talking about tripling its robo taxi fleet by the end of next year to over 3,000 vehicles. But that just implies that they have less than a thousand today, relative to the 1,600 at WeRide and the 2,500 at Waymo. So for them, it's the ramp to 3,000. The question, Grayson, is end of '26. Let's say Pony does get to 3,000. Where's Waymo going to be? Where's WeRide going to be? And where are some of the other competitors going to be? Where will those volumes head?
Waymo will be over 5,000 or 6,000, with a caveat: if the Hyundai vehicles start coming online, that's where I think they'll be. Pony, unsure. WeRide, unsure. Just don't have enough insight into the supply chain, into the manufacturing relationships. A little opaque over there. Don't have that. What do you think?
They're still small numbers, right? So I mean, I think the advantage here may go to WeRide given the Chinese partnerships, but again, relevance to competition with Waymo, which has access to broader markets than just feeding into the US market. And to your point with Pony, again a different competitor partnering with Bolt. There are differences between Pony and WeRide. Pony's trying to get cars off the balance sheet in China with Sunlight Mobility and off its own app in Europe with Bolt, where WeRide, excuse me, is more of a vertically integrated approach. It has its own licenses in Abu Dhabi, Zurich, and other places. So Pony's basically like, let others own the cars and customers. You saw autonomy kind of like more the US approach, and WeRide is kind of more the vertically integrated approach. Which wins? I don't know. Ed Olson came on the podcast yesterday, which I'll be releasing later this month, and so he's trying to offload all the assets.
What does it look like from an investor standpoint when you meet with investors in funds? Is it, okay, we want the asset-light company or do we want to have the Apple company? And you've done such a great job covering Apple. And for our listeners and viewers from time to time, Walt writes really great notes on Apple. So check him out. The Tim Cook one recently, Walt, was well done. Where do you think this is going? Vertically integrated or partnership heavy?
I mean, that's obviously a rhetorical question because investors always prefer to get the highest return on capital, and it's harder to do that when you're a capital-intensive business. It takes a longer term to get that. The reality, the problem, the challenge with that is, you know, sometimes the vertically integrated companies are the ones that can push their products first and gain the share, right? Because they are taking on the responsibility of ownership, and that I think to a certain extent becomes important. Look at Uber. I mean, Uber's owning cars in a lot of these partnerships, capital-intensive now with long-term plans to offload that. So I think my gut tells me that the initial strategy that probably works better is the vertically integrated one to get these things off the ground. Again, you know, saying this over and over, we're still very early days in this. The field is still generally wide open. Highlighting these actual numbers of cars on the road and what those experiences are is important in doing that. But Grayson, the other aspect of tracking what goes on in the market is footprint, right? And where these things are approved, because there's regulatory aspects, and later we'll get into supporting these cars. Waymo just got a massive expansion. I think it occurred right after we recorded last week, in California down to San Diego. What are your thoughts on that in terms of Waymo's usability as a service?
My honest thoughts are, well done to the Waymo policy team. Waymo has done a really great job of building trust with a gentleman named Bernard Soriano at the California DMV, along with the California Public Utilities Commission. They built trust in California. The DMV approval is a clear expression of that trust that they've built. And I believe personally, having spent a lot of my life in policy, it's going to be very hard for other companies to get to the level of trust that Waymo currently has now with the state of California, the California Public Utilities Commission, and the California DMV. And that could be an overall competitive advantage as it relates to deploying robo taxis in the Golden State.
Well, before we applaud California too much, we'll get to Santa Monica later and what's happening there. But let's talk about this massive footprint. And it is a massive footprint. Now, Tesla bulls will tell you, like, 'Oh, we've got this massive footprint.' You still have a safety driver there. So, you know, simmer down for now. This massive one in terms of Waymo and also the amount of cars that they have operating there relative to where Tesla is, even with a safety driver. You know, they're going to ramp more cars. What type of additional infrastructure do they need to put in there in order to service that area? Because, you know, I've been on some of those roads out to Lafayette and beyond, and I think, you know, further down, like if people... this is great for longer trips. But like, what type of infrastructure is in place or getting put in place?
There's been no announcements on that front. Before we get to the infrastructure, you're going to need a lot of vehicles. And I'll give you a number. It's a very large number. You'll need, I would say, between 5,000 to 6,500 vehicles to cover that entire service area if that is indeed truly turned on. And from an infrastructure standpoint, you're going to need, I'll use the term nodes, you're going to need depots. Say San Diego, LA, Napa, you're going to need a lot of depots there. So it's a massive service area. How do you think they're going to be able to service it?
I don't know. It's a challenge, right? And, you know, the other issue is you just said that for that service area alone, they're going to need five or 6,000 cars. And as a quick reminder, Grayson, earlier in this very podcast, you said that they're only going to get to 5,000 total, right, across all of their markets. So we have a press release where neither of us can really figure out the plans for the infrastructure, and it doesn't seem like there's going to be the supply there. So why even announce this other than basically a good PR win for the policy team to basically lock... I mean, obviously you want to lock it in. So I guess that's the issue, right? You just lock it in because you can, but like, is there probably not going to be service there for some time? It's a flex move obviously because it's the California Department of Motor Vehicles that would become public. So I kept putting it out, but it's also a flex move because of the limited number of vehicles that we project to the end of next year. I could see a scenario where people are going to send bows and arrows now, where certain vehicles are geofenced to the areas and perhaps a small percentage, 5%, 6%, are able to go to longer distances, and perhaps that's how they do it, if they do indeed do it.
While we don't know how they're going to operate it, we do know that they are running into issues with some of the infrastructure in Santa Monica around the beeping. Do you know what the beeping is, Walt? Do you know why the Waymo vehicles have to beep?
I mean, I had a friend that claimed that his grandmother, Grandma Moon or something, was the one that was hit by a truck that was in reverse, and she's the reason why there's these beeping on the... I don't know whether he was telling me a tall tale or not. It was something he would tell us in college often. He was very insistent upon it. But yes, the beeping is for when the car is in reverse. Maybe in this case the beeping is for something else.
Tall tales or Paul Bunyan and the Blue Ox. So that's a tall tale there. It is a NHTSA regulation when the vehicle backs up so individuals know that it is coming. Did you also know that electric vehicles have to make noise even driving because that is a NHTSA regulation? And I'll give you a little side note here. Did you know the most dangerous car way back when it first came out was the Toyota Prius? Do you know why? Because it was so quiet that people would not hear it coming.
It was you. It was the number one drive-by vehicle for drive-by shootings in South LA when it first came out.
Oh god. Police took notice, and so that's why you start to have these noises on the electric vehicle. So there, that's one incident. There's other very publicly documented incidents.
