The 2020s will see the electric vehicle market explode in terms of sales, but it feels like last decade was the decade of electric vehicles. That’s when the foundation was laid, when the true breakthrough happened, when the automotive world was turned on its head by electric vehicles — and, in particular, by one electric vehicle startup. The most exciting automotive topic of the 2020s is not electrification, even as important as that is for the future of humanity and as fun as it is to track. In this decade, the hot topic is autonomy — and I can’t stop thinking about the different scenarios that could play out.
While I don’t have a crystal ball to see how this will develop, I’ve narrowed the possibilities down to 4 potential futures. Let’s look at these 4 potential futures and some of the key ramifications.
Tesla Leads, & Others Take A Long Time To Follow
One possibility is, naturally, what many Tesla enthusiasts expect — that Tesla gets true Full Self-Driving capability to market long before others, and that it is then able to operate robotaxis for personal or commercial use. That would essentially give Tesla a monopoly on widespread robotaxi deployment/availability (in regions that approved of Tesla robotaxi service).
It’s hard to quantify that and hard to imagine all of the ramifications, but it would certainly result in Tesla seeing humongous demand for its vehicles, Silicon Valley–like profits, and a massive market cap. It would also presumably lead to the collapse of some other automakers as people wait to buy a Tesla or drop their own cars for convenient and cheap robotaxi service. That’s the dream, anyhow.
Tesla Stumbles, Others Win The Day (Cruise? Waymo? Baidu? DiDi? AutoX? Nvidia?)
There is no guarantee Tesla will be first. Cruise, Waymo, Baidu, DiDi, AutoX, Nvidia, or someone else could be the first to offer widespread autonomy and robotaxi availability in consumer cars. Or perhaps they wouldn’t even go there and would just offer the service themselves, not selling the vehicles to consumers. Either way, if they are first, they get at least some of the benefits noted in the earlier scenario. How far of a head start the leader has is critical, of course. A lead of a few months is negligible. A lead of a few years means enormous profits and growth in valuations. And, if Tesla isn’t first, I assume that would lead to Tesla losing much of its demand, losing shareholders, and not being nearly the giant that many fans expect it to become (or be already).
Everyone Achieves Level 4/5 Autonomy Around The Same Time
What happens if several companies achieve Level 4 (or 5) autonomy at the same time, give or take a few months? Hmm. The auto world as we know it will face disruption, but the balance of power among automakers will more or less remain the same. If a Volkswagen, a Ford, a Tesla, a BMW, and a Cadillac all receive autonomous capability in the same year or so, I don’t see the market balance to change a great deal. However, Tesla could see its stock drop, as it would lose its panache as the only auto company that could do tech and that could achieve such a thing.
That Last 0.0001% Is Too Hard
What if no one can do it? Some critics presume that it will take decades for cars to be able to really get let loose on their own and operate as robotaxis. While I do not subscribe to this view, I figured I have to include it in here. In that case, we’re basically at the same place as in the 3rd scenario. The only real systemic shift in balance in the auto market will be based on which automakers lead on electrification and which lag. Naturally, that would likely give Tesla increasing weight over the next decade. How much of a lead it will have in 2030 or 2040 is highly debatable, though, and it is the frequent topic of debate, so I’m not going through the matter here right now.
What do you think? Which of these scenarios would you bet on (or are you betting on)?
And am I missing any possibilities? Or is there more nuance you want to add?