The newest ad for Whitney Tilson’s Empire Stock Investor ($49, renews at $199) is all about this “Taas” business, and I’ve gotten a few questions since it started circulating a week or two ago… so let’s dig in!
The basic idea is that “TaaS,” which is “Transportation as a Service,” is going to take off and be the next great defining economic trend… which will save lives and money and, if you buy the right stocks, make you rich.
That’s based on two different trends that Whitney Tilson talks up in the ad — electric vehicles, and autonomous driving.
Here’s how he argues that electric vehicles will become mainstream much more rapidly than you’re guessing…
“If you have the choice to get essentially the same car, but one is cheaper to buy, costs 90% less to maintain and use on a daily basis, and lasts up to five-times longer… which car will you buy?
“In just a few years, no one in his right mind is going to buy a new gas-powered vehicle.
“What so many people are missing right now is that this shift to EVs isn’t about the environment or ‘going green.’
“Again, it’s all about economics….
“Mark my words: In five years, electric vehicles will account for more than half and perhaps much more of all new cars sold in the United States.”
But that’s just half of the promised revolution that Tilson sees coming…
“When you pair EVs with another disruptive technology — self-driving vehicles, controlled by very powerful computers — it will be completely transformative.
“Sooner than most people think, you’ll be able to hail an electric, self-driving vehicle via an app on your phone, just like you hail Lyft and Uber ride today.
“And this is TaaS… which stands for: ‘Transportation as a Service’ ….
“Estimates are that TaaS will reduce the total costs of transportation by 10-times, compared to owning your own vehicle.
“TaaS could soon drive down our costs of transportation to just 10 cents or even less per mile!
“Today, it costs about 80 cents per mile in our gas-powered cars, according to AAA.
“Think about that…
“I could soon walk out of my Manhattan home and comfortably ride to the Nation’s capital, in a TaaS vehicle, for less than $25—or even less if I’m willing to share the car!”
And that’s where that “put $5,600 back in your pocket” talk comes from…
“… instead of paying $50,000 for a new car… plus $3,000 a year to fill up your tank… and $1,000 to $4,000 a year for insurance, you’ll instead spend something like $150 a month for unlimited rides with a TaaS subscription.”
That will lead to far fewer car crashes, since we won’t be dealing with human error or road rage anymore… though I guess we have to keep the “law of unintended consequences” in mind when trying to imagine what a few computer glitches could do to the New Jersey Turnpike on a rainy Friday evening.
And Tilson goes on to say that 2020 is the year of “peak car ownership,” with the danger and waste of individual car ownership gradually becoming a thing of the past from here….
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“With TaaS, there will be a HUGE reduction in the number of cars on the road… some say the number of cars we’ll need will drop by 80%.
“Many auto makers will go out of business as a result.
“Over the next few years, you do NOT want to own traditional, indebted car companies like GM.
“You also do NOT want to own most publicly traded car dealerships… or car lenders like Santander and Consumer USA. Nor do you want to own companies that sell personal car insurance like Progressive or Allstate. Or focus on repairing or servicing them, like AutoZone, Midas, or Precision Auto Care.”
A few readers made that point earlier this week when I was talking about an AutoZone teaser, by the way — from a different Stansberry teaser, by the way, so at least we know those editors all have independent ideas, they’re not all singing the same song. And since he mentioned auto insurers but left out GEICO, owned by Berkshire Hathaway, which is the stock Whitney Tilson likes above all others and calls his “#1 Retirement Stock,” I should note that Tilson did try to ask about GEICO and autonomous cars at the last Berkshire meeting, for what it’s worth, but didn’t get his chance last year.
And in case you want to daydream about the other longer-term impacts, here’s more from the ad…
“Imagine a world in which nearly all of the parking lots located on prime land can be converted into new offices, housing, businesses, parks and playgrounds, and other useful spaces.
“It’s mind-blowing…
“Did you know, for example, that approximately 1/3rd of the land some cities is occupied by parking lots?
“According to one estimate, all of the parking space in Los Angeles alone is equal to three cities the size of San Francisco….
“This is going to have the biggest impact of all on one huge industry: Oil.
“The entire industry, starting with the high-cost producers, like Canada’s oil sands, is going to get crushed.
“Oil won’t go away entirely of course, but demand will fall significantly. The long-term price of oil could get cut in half to around $25 a barrel.”
I could be snarky and say that we’re past that already, with oil recently dropping below $20 a barrel… but that’s for May 2020 delivery, when you’re talking about long-term futures the prices are still substantially higher, oil for June 2022 delivery will still cost you about $38 a barrel right now, and if you go out seven or eight years (where futures aren’t really traded much) the futures quotes are for roughly $50 a barrel, so $25 could theoretically be a “cut in half” price.
That’s just a little taste of the massive disruption that this could cause, of course, he goes into stuff like real estate values, and city, state or town budgets that are dependent on parking fees, tickets or gas taxes. And he says it’s coming soon…
“People always overestimate how long a revolutionary breakthrough like this will take to reach massive scale, and that’s the big mistake many are making today too….
“Back in 1985, for example, AT&T hired McKinsey, the world’s leading consulting firm, to predict the adoption rate of cellphones.
“McKinsey’s ‘experts’ predicted the cell phone market would total 900,000 customers by the year 2000.
“But they were off by more than 100-fold… the actual number turned out to be 109 million!
“You see this again and again… every time a truly disruptive innovation enters the marketplace—nearly everyone underestimates how quickly it will catch on and disrupt the status quo.”
And then he starts to get into the individual stocks he thinks you should buy because of this trend…
“If you want to see one simple stat that sums up how quickly this technology is improving… and how fast it’s moving, check this out.
“Waymo announced recently that it took 10 years to reach 10 million miles of autonomous cars on public roads…
“But the next 10 million miles took just a single year….
“Investment #1: Buy Waymo.”
That’s our “freebie” pick that he actually names in the presentation. Here’s a little of what he says about it:
“Waymo is owned by Google (known now as Alphabet), and they are the clear leaders in this space.
“Waymo has driven more autonomous miles than anyone else in the real world—more than 20 million miles as of today….
“Morgan Stanley values Waymo at more than $100 billion. Eventually, we think it will be spun out of Alphabet (the parent company of Google) and become its own company.
“What makes this such a great investment is that you can buy Alphabet today—which is a great, cash-gushing business—and pay essentially nothing for Waymo….
“The stock symbol is GOOGL, and I recommend you do not pay more than $1,600 per share.”
Hard to argue with that, Alphabet is my second-largest investment and I came up with a max. valuation of $1,650 before the coronavirus hit, so I guess Whitney and I are somewhat in agreement there. It’s actually the stock I’ve held the longest in my Real Money Portfolio (about 15 years now), and I’ve even been adding to it this year for the first time in a long time. I think they’re very well situated, though it’s also true that the downturn in ad revenue this year will have a much bigger impact on Alphabet’s results than their still-money-losing Waymo business… and the downturn could be worse than expected for Google’s ad business, since some decimated sectors, especially travel, are huge sources of both search traffic and ad revenue.
Those estimates for the value of Waymo used to be even more aggressive, for a while some analyst had a $200 billion valuation on that business — and it might be that Morgan Stanley’s $100 billion is still pretty high, but you never know, they still don’t tell us very much about the financials or their longer-term plans for Waymo. I’m pretty confident in Alphabet’s future if Waymo is only worth $20 billion, too, so I don’t mind waiting to see how it plays out.
So now, given the freebie, what are our “secret” stocks to seek out?
“Investment #2: Own the Most Important Technology in the Electric Car Space
“The best thing you can do as an investor is position yourself in front of a massive, inevitable, and booming trend….
“Like the boom that took place with smartphones beginning in 2007, EVs are already a superior technology with rapidly declining prices. As a bonus, they are also being mandated by governments around the world….
“Luckily for you and me, there’s a very simple and easy way to do that with one simple investment.
“It lets you own the best electric car technology… and the components EVERY electric car needs.
“It’s THE PERFECT way to invest in the booming future for electric cars. This investment is up 40% since last summer. It’s up more than 75% since the start of 2016… and I expect it to absolutely soar in value in the years to come.”
This is not a 100% certain match, since those clues aren’t all that specific… but this could be Aptiv (APTV), the remnant of the original Delphi auto parts supply company that started life as part of GM decades ago. This part of the surviving company focuses on auto electrification, cockpit electronics, and autonomous driving technologies. The other possibilities that match with some reasonableness are the leading semiconductor provider in the automotive market, NXP Semiconductors (NXPI), and the various electric drivetrain providers among the auto supplier firms, though none of those are “pure play” electric (or even very close). Probably the closest of that latter group, considering the near match on the stock chart clues, is Dana (DAN), but I’d say the best match is NXPI if it’s not APTV.
I owned Aptiv from 2017 to 2018 before being stopped out with a modest gain, and it is a good play on the increasing complexity and electrification of vehicles… though the risk is also that it’s still a broad-based automotive supplier at heart, so to a large degree it’s still a play on the volume of vehicles sold. Much of their profit still comes from selling electronic components in all kinds of vehicles, and vehicle production was already in a decline last year, partly thanks to the GM strike, and will be massively impacted through the coronavirus shutdown this year.
The shares are up about 75% from where they were at their trough in early 2016, and up about 40% since late last Spring… or at least they were a few weeks ago, when Tilson probably put this data and the heart of this presentation together, before the coronavirus plunge. Now, like everything else, it’s a bit cheaper in the high $50s (it was near $100 when the year turned, and could have been around $80 if Tilson’s ad was created in February).
Delphi Technologies (DLPH), the other part of the original Delphi that was spun out of Aptiv a couple years ago, is arguably more of a direct play on vehicle electrification, since they make drive trains… but the transition won’t necessarily be easy for them, because they also make a lot of powertrain parts for conventional cars. Aptiv is more of a bet on cockpit electronics and automotive “brains” than on the electric power train itself, though that’s probably splitting hairs. You could also go with Dana (DAN), another automotive supplier which has moved pretty big into electric drivetrains — Delphi doesn’t match those 40% and 75% price references, but Dana could, and they’d certainly like to be known for their “e-mobility” solutions.
Aptiv’s two big divisions are Signal & Power Solutions, which is their largest and highest-margin business and is benefitting from big investments in higher voltage electronics, and Advanced Safety & User Experience, which includes the self-driving car technologies they’ve built and bought over the years. Their guidance was for a weak first quarter but for overall revenue growth of 4-7% for the year, with earnings per share growing by a couple percent, and they did see strong secular growth in power electronics and in safety technologies at the time that they were releasing their last quarterly update, but they’ve since withdrawn their guidance and that has all been thrown out the window for 2020 at this point, since nobody’s making cars now and few are buying them.
A few analysts have issued updated coverage of Aptiv in the past couple weeks, with a little optimism and some price targets that sound appealing after the fall, with Citigroup calling it a “buy” with a $67 target and Goldman Sachs going to $70 just yesterday, but of course that’s not much solace for those who bought at $90 in January. It’s an odd world when analysts are slashing their target prices by 30% but also giving the stock an “overweight” rating, but I guess you have to make decisions with the price you have in front of you today, not the price of a month or three months ago.
So, like a lot of other companies, Aptiv has now withdrawn its guidance, drawn down its line of credit to make sure they have some financial flexibility, and halted its dividend… which means that they don’t know what’s going to happen this year, and neither do we. This is in part a technology company, but it’s also a big auto parts supplier with factories and huge capital expenses and lots of obligations, so a lot will depend on how long it takes for the big global carmakers to get back to work, with European automakers in particularly being very important for Aptiv, and what the overall restoration of demand looks like — if plants are closed for a couple months and auto sales are down to zero for three or four months, they can probably survive that… if the weakness persists for a lot longer than that, their debt burden will start to be more challenging and the numbers start to look pretty bad.
I do like Aptiv, it’s the part of the auto business I’d want to be in if I were forced to be investing in the auto business… and we might be seeing a bottom-fishing opportunity if things bounce back relatively well from here and Wall Street starts to really focus on a rosier future in 2021, as Whitney seems to expect (he’s been generally pretty optimistic in all his free commentaries)… but I’m also kind of glad that I don’t have to invest in the auto business right now. Aptiv is expecting to host a virtual annual meeting next week, and the first quarter report should come out a week or so after that.
And if it’s one of the others, I’m not so crazy about Dana (DAN), given the very pure exposure to “how many autos are getting sold right now”… and NXP Semiconductor (NXPI) has been a challenge to assess over the past few years because of the tug of war over what’s most important to them — they lead in NFC chips that let your iPhone pay the register at Whole Foods without you pulling out your virus-soaked cash, so growth is sometimes good and there is a bit of sexiness in the business, but they also are very reliant on the auto sector as new cars incorporate more and more semiconductors, which means falling auto sales are a problem. NXPI has been a very “average” semiconductor company, trading pretty much exactly in line with the Philadelphia Semiconductor index over the past few years (I’m using the SOXX ETF for my comparison), and like most chip stocks, particularly those tied to industry, like Texas Instruments (TI), it will probably ride the economic cycle hard — so if we have a prolonged recession it should do worse than most stocks, and if a surge of economic growth comes back, it will probably help lead that growth. Still, NXPI at least has other businesses if automotive demand falls apart for a couple years… Aptiv and Dana, not so much.
And what’s next?
“Investment #3: Own the Two Key Technologies for Autonomous Vehicles
“Driverless vehicles are becoming a reality today because of a dramatic confluence of many technologies: computing power, cameras, sensors, laser range finders (called LIDAR), GPS, and artificial intelligence software, just to name a few.
“But my team and I believe there are two companies responsible for by far the most ‘critical components’ for the best self-driving cars.”
Ah, OK, so “Idea number three” is actually two different ideas. Way to make the Gumshoe work a little harder, Mr. Tilson!
Clues, please?
“The first company makes the most technologically advanced ‘brain’ and ‘nervous system’ for autonomous vehicles. This firm has already partnered with many of the leading companies in this space, including BMW, Hyundai, Audi, Intel, and Lyft, just to name a few.
“This technology helped complete the longest automated drive ever… from San Francisco to New York City… and was selected by one national government to be the technology behind a country’s autonomous taxi’s set to hit the road in 2022.”
Actually, that is a perfect match with Aptiv (APTV)… so maybe I was stretching a bit too much to guess Aptiv for the previous tease. Aptiv, which at the time was still called Delphi, did provide much of the brains and sensors and operating system that powered an Audi Q5 on what they called the first autonomous coast-to-coast trip about five years ago, and they are partnered with all of those other companies.
And yes, they were also selected as the “strategic partner” to implement the “mobility on demand” service by a national government, with the goal of commercialization and implementation by 2022, though that selection — by Singapore — was in 2016, and I don’t know what the current status of the project is. So I guess we’ll have to revert to NXPI as a guess for the first one, though it’s an imperfect guess… if you’ve a better one, feel free to throw it on the pile for our consideration. Or maybe Tilson’s “double dipping” with Aptiv, who knows.
And one more!
“The other key technology you want to own in the driverless technology space is the company that provides the computing power for many of today’s driverless vehicles.
“This is critical for EVERY autonomous vehicle.
“Already, this company has partnered with many of the world’s leading vehicle manufacturers, like Toyota, Volkswagen, Mercedes, and Volvo…
“Plus trucking companies like Peterbilt and Kenworth…
“Auto parts makers like Bosch and Continental…
“Tech firms like Sony and Panasonic…
“And research institutions like Berkeley, Carnegie Mellon, MIT, and Stanford.”
That one, sez the Thinkolator, must be good ol’ NVIDIA (NVDA). NVIDIA has been a big part of the autonomous car “brain” story for half a dozen years now, the first pitch on that I saw was from David Gardner at the Motley Fool back in 2014 (he touted NVDA because it was “Warren Buffett’s Worst Nightmare” — not because it was a pricey tech stock, but because self-driving cars would spell the end for auto insurer GEICO, one of Berkshire’s cash gushing companies), and pretty much every tech-focused newsletter pundit has recommended the shares at some point over the past five years, whether for their self-driving AI systems or their gaming chips or virtual reality processing power or blockchain mining prowess or whatever else. But their first real foray out of serving up faster and faster GPUs for “hardcore video gamers,” at least in the minds of investors, was in the self-driving car space.
And yes, NVIDIA is partnered with all of those companies and tech centers (though Peterbilt and Kenworth are the same company, those are two different brands owned by PACCAR), and clearly has a lead in the heavy data processing work that will be required for autonomous vehicles — for high-level autonomous driving to work in the real world, every car has to effectively have a supercomputer on board to process all the variables and all the inputs from dozens of cameras and lidar or other sensors, and do so extremely quickly. That may not be the story ten years from now, it might be that 5G networks are advanced enough to allow communications that are fast enough for a lot of this processing to take place in a data center instead of in a supercomputer in the trunk, but for now every car needs a really fast processor to help it “think,” and NVDA has arguably been focusing on that longer than anyone. They aren’t the only ones, there are other high-end processors out there, including from their archrival AMD (AMD), and some companies have very publicly gone their own way to develop their own processors (like Tesla, which started with NVDA and then decided it could do it solo), but NVDA is still the big name here.
Of course, it has also bounced back REALLY fast from the crash, mostly, I gather, because folks are expecting data center demand and gaming GPU demand to remain strong during these “stay at home” days. I’d have a hard time chasing this one at $300, since I also found that price a little steep back when I looked at their first quarter results before the crash, but give it a 20% dip from here and it gets pretty appealing for a nibble. Here’s what I wrote about NVIDIA for the Irregulars back when they reported in mid-February:
2/14: NVIDIA (NVDA) seems to have gotten past the disaster of last year, with a couple quarters in a row now of sequential growth and, just last night, their first reported quarter of actual year over year earnings growth in a little over a year. I still think this is a “buy the dips” story if you’re looking for shorter-term opportunities, but I also hold on to a core position because I think NVDA is still likely to be the basic operating system underlying most major machine learning projects — being first with high end inferencing chips and getting their products used by most of the major AI engineers a couple years ago gives them a large head start. The challenge is in buying after one “vast improvement” quarter following a year of weakness, because it’s hard to have confidence in the projections that they will be able to increase revenue again on a steady basis (revenue had almost doubled in 2-3 years before the peak in mid-2018, but fell by 25% over the past year or so before the bounceback this quarter)
The stock soared to new highs on the strength of their earnings report and conference call last night, but I would be wary about chasing it here — they did say that they’re cutting their revenue forecast by $100 million because of likely weakness in gaming chip sales in China (gaming chips are still its largest segment, and China its second largest market), but strength in data center sales is presumably enough to make up for that — they talked up the strength of their AI chip sales into data centers, which was a bright spot in a quarter that was rough for some data center vendors (like Arista and Cisco), but also strong for NVIDIA’s core competitors AMD and Intel. That data center business for NVDA was the real reason they “beat” the earnings estimates, sales grew 43% in that segment thanks to strong buying from the “hyperscale” customers (which usually means Amazon, Google, Facebook and Microsoft, though they called out Microsoft, Twitter and PayPal in the conference call).
The big bright spot for me is that although gaming is still their largest segment, it has shrunk in importance because of the huge strength in data center sales — gaming chips in the quarter brought in sales of $1.5 billion, and data center chips rose to $968 million. That’s a huge swing over the past few years, and a good sign for the future, after this year’s anticipated bounceback in earnings (which will bring earnings growth of about 30% in this current fiscal year, their FY 2021), the stock is trading for about 40X current year earnings and 33X next year’s earnings. That’s steep because investors have quickly fallen back in love with NVDA, but you can certainly justify it given the 20-30% earnings growth rate — I just have a tendency to be more conservative with NVDA, given the volatility of earnings and the memory of being bitten by their cryptocurrency-driven inventory glut last year, so I’d prefer to look for dips — NVDA looks pretty compelling now below $250, which was my “nibble” point before earnings (when it was in the $240s, so I could have bought more but did not), and I hope it will get back there, but at $290 it’s still a hold for me.
And that’s about all I’ve got for you today — it looks like Whitney Tilson is touting Alphabet (GOOG)’s Waymo, Aptiv (APTV) and NVIDIA (NVDA)… and maybe also throwing in a chipmaker or other auto supplier (I’ll guess NXPI, though it could be someone like Dana, or he could be double-dipping on Aptiv for different reports).
Will he be right? Despite what the “prophet” marketing materials say, Whitney is not routinely perfect about calling tops and bottoms. Yes, he has made a few very good calls over the years… but he has also made some terrible ones. Just because I agreed with him that Tesla was going down the tubes a year ago doesn’t make it any more right, we were both really, really wrong, at least so far — TSLA was around $250 or $275 when he wrote that it was the “beginning of the end for Tesla,” and within a year it had gotten to over $900 (it’s at $750 or so now).
So don’t rush to assume that he has the perfect buy or sell point for you, but these are some interesting ideas to consider in the autonomous driving space… and maybe it’s worth thinking about what happens to the world if this idea of “Transportation as a Service” supplants the US car-centered culture faster than we think. For me, I’d guess that Tilson would be less apt to jump to that “faster than you think” conclusion if he lived in Manhattan, KS instead of Manhattan, NY, but we’ve all got our biases … and it’s true that it is very, very hard to imagine the world changing quickly — but very profitable if you guess the direction before everybody else.
And as you might imagine from the thoughts percolating through what I wrote above, in a lot of ways the challenge for those eager to invest in electric car technologies or self-driving car technologies is that the leading companies are often also still very dependent on conventional cars, or on other completely different businesses… though in a positive for folks like Aptiv, NXP or Visteon (VC, they were to Ford what Delphi/Aptiv was to GM), it’s also a business where entrenched suppliers are hard to supplant — nobody wants an untested startup providing sensors or cockpit electronics just to save a few cents. So they may be in a tough and competitive business, with challenging top-line revenue if auto sales fall, but they probably won’t be beaten out by a kid in a dorm room anytime soon.
I’ll leave you there, dear friends, and let you make your own call — if you’ve got thoughts on Waymo or Aptiv or NVIDIA or any of the other ideas we touched on above, or some better plays on these sectors that I haven’t mentioned or imagined, well, please do jump in with a comment below to share your thoughts. Thanks for reading!
The whole electric car rage is blown way out of proportion. There is still poor infrastructure available for charging, the range is pathetic, not to mention the stress of having to figure out your charging options every time you take a trip.
As to the autonomous vehicle thing, I’m licking my chops waiting for one of them to hit me so I can take them to court. After some earlier accidents in that realm they should not be allowed on any public streets whatsoever and I can’t believe the government is allowing them to do it. Have you seen the self-driving 18-wheelers that are already out there? Ridiculous.
Thanks for your short-sighted opinion. LOL!
Instead of arguing against his points you instead choose to ridicule the writer. You are a member of the AOC/Pelosi party.
There’s nothing wrong with the Pelosi Party unless you have your nose up the lying moron in the WH!
Moron, really. As if to say Pelosi is pure as the wind driven snow. She and Schumer are like the witch and the warlock.
Lan. This is an investment site. As much as politics affects the stock market, take your political name calling somewhere else. You are not adding value to the investment discussion.
Please, Gallo started the name calling by insulting the president
unfortunately, while all politicians should be thinking about the “greater good”, the great majority selfishly think about themselves.
Particularly what’s he lying about. I must be out of touch and could use some sound enlightenment!
Personally “Dex” I think “Old Guy” is being a bit realistic.. I believe the change will eventually happen by ‘dribbling’ into society, but NOT in the short span of time they are touting….and have you forgotten…there have been lives lost because of the malfunctioning of the computers.
I believe that there is a BIG PUSH for people to get on board to buy these stocks because ALL of these big name companies are, unfortunately, taking a nose-dive by the ripple effect of COVID-19.
I don’t know, owning a car isn’t as. If a deal to younger generations. Also the concern over the environment. Look at the affect of taking about 1/3 of cars off the road for three or four months. The pollution is is huge with kids 15 to 25-30 right now. Now add 10 years to those ages. You honestly don’t think this is coming? Yes some issues need to be worked out, and they are working on them. Longer battery life, faster and more charge stations. It’s coming and I think 5-10 years is a realistic time frame. Look how far it’s come in the last 10 years.
Great comment. If you, meaning anyone, thinks it’ll be a long time, think again. Jaguar just announced that it’s entire fleet will be electric by 2024. I’m guessing all other carmakers are not far behind.
Well if their autonomous cars work like Windows or Safari or your average Inet provider, we are not in for a lot of fun.
No computer in the world can figure out stupid humans.
Hahaha. Well said “goldrush 126… short, sweet and to the point….it certainly would be a disaster if they could.
Actually, in the near future computers will dictate how humans should behave, so there won’t be a need to figure them out 😉
We already have politicians and health officials that do that.
But the computer can react to the “stupid human” faster than another regular human. If it is programmed in Swarm code to talk to the other autonomous cars, that would reduce chance of multi-car accidents, too.
Looking at autonomous vehicles from a computer-design point of view, we have to try for absolute zero accidents (an impossibility), to defend ourselves from a lawsuit-happy society, looking for someone to sue.
From a Highway Safety point of view, all they have to do to begin saving lives is be one increment better than the average human. A VERY different proposition! (Humans’ accident record actually sets the bar pretty low).
If/when we build a computer that has halves the highway fatality record that we accept today — How can we prevent getting sued for it?!?
They will be insured the same way as stupid humans are now.
So, I actually work in this industry (autonomous electric vehicles). A few things to keep in mind:
1) It’s impossible to make a machine drive perfect with 0% chance of failure. But that’s not the point. They only have to be safer than the average human driver to be a net saver of lives. And let’s be honest: the average human driver isn’t great and getting worse. Computers don’t get drunk, don’t have road rage, don’t text while driving, don’t fall asleep, etc etc. Humans are far from perfect, and autonomous vehicles can easily be safer.
2) The infrastructure argument against EV’s is not valid. We have electric power everywhere. It’s very very easy to add charging stations virtually anywhere. Now, the capacity argument is somewhat valid: we will probably need new energy source capacity, but mankind knows how to do that. It’s not rocket science to add capacity. Yes there are hurdles but it is hardly insurmountable. We know how to do it.
3) The demand is huge. The ability to have a vehicle take you from point A to point B for a certain fee while you can do whatever you want (sleep, work, etc) and not have to park, insure, store or maintain a car is enormous. When there is massive underlying demand for a product, capitalism finds a way. Do not fight it.
Glf076. Thanks for the summary. I can’t wait until the self driving car is more affordable. I agree most accidents are caused by humans. When we get old and unable to drive, self driving cars will be essential.
Unless there’s a snow storm blocking the sensors, or an ice build up, or a Florida summer downpour, or late night southern Cal fog, in which case the autonomous car is impotent. There’s still huge obstacles in the way of autonomous vehicles on public highways.
Maybe it’s just not for you. Don’t drive one.
Many will and they will be around forever, whether you like it or not.
Wow! Wonder how airplanes manage in all those scenarios? Is it not feasible that they may have figured out other sensing methods than the purely visual ones you mention?
The pilot is in command and ultimately makes the decisions
The pilots can sleep from San Francisco to Hong Kong and the plane will find its way just fine making all the decisions for the pilot.
Geez, people can’t drive in these situation either. What about airplanes? They seem to be able to work?
You fail to mention the decay in maintenance when development becomes a cost center. The good engineer move to something new and the normal ones are in charge of maintenance. Then there is slippage, like at Boeing.
These are great points. I wonder if you can expand on the ability of these machines to protect against malevolent hackers. Is there not serious concern about this issue?
gflo any hints of what stocks you would buy in this area? “capitalism finds a way. Do not fight it.” – totally agree with you here so I think its a buy
Great points. It’s worth looking at demographics too. I think it’s safe to say that Millennials, Gen Z’s are mostly on board for the push toward cleaner, safer energy and transportation alternatives. But Baby Boomers are aging as well, and driving concerns will inevitably come up. So, another huge demographic may find themselves pushing for a more independent/clean transportation option as well.
You wont be allowed to drive a car at all in the near future because only self-driving cars will prove safer.
That will not be in the NEAR future, but you are correct. Tesla’s autonomous driving in it’s current state would reduce accidents by 80-90%.
anyone knows how to buy TaaS stock and what’s the name of the company for it?
Google taas stock price
You obviously haven’t driven a Tesla. They are totally amazing.
There was an accident in the UK recently involving a storm, a falling tree (lethal) and two Tesla cars with their automatic brake sensors. It was reported that had the cars not been Tesla, BOTH car occupants would have been killed.
Autonomous vehicles are coming. A Canadian company can now retrofit an existing Truck-Tractor to be autonomous for about 65,000. Do you know what the average pay for a truck driver is? I can tell you that it is more than 65,000. The light at the end of the tunnel is not the other side, It’s an autonomous vehicle-Watch Out.
Long-haul truck driver US 2020, 50th. percentile = $44,796
Friend recently took me for a ride in his new Tesla, The Control display was so complete I couldn’t see any shortcomings in it. A planned trip had all the recommended charging stations already figured out and mapped on the route. AI has advanced much further than I had realized. I wouldn’t bet against TSLA based upon the capabilty of their cars alone.
Only problem, what if someone is using the charging station when you arrive. And another one waiting.
I’ve seen some Tesla charging stations. At one such station just off I-10 in Florida there must be a dozen or more chargers and never more than one car charging when I’m there. Adding capacity for charging will be MUCH easier than adding another gas pump.
Wow people get real do you know how long a trip will take? Did bother to look how long it takes to charge a vehicle? Who has that kind of time? People who have long commutes to work it will be a real problem. Travel from California to Michigan could take two weeks or better. Most vehicles can only go on average 200 miles on a single charge and chargers are not available yet in most places. I live in South Dakota and well haven’t seen a charger yet! Yes it would be nice but its not here yet. Some people don’t want to give up their Freedom and independence just yet!
Im sure they will make batteries go at least 600 miles soon and charge 10 times quicker than now.
I own a Tesla and am constantly amazed at the advancement in basic vehicular controls, even compared to my high-end Toyota hybrid. I just now see other manufacturers trying to play catch-up, while Tesla continues to upgrade its capabilities with routine SW downloads.
As for infrastructure, I see chargers everywhere that are currently unused. I rarely have seen charging stations, Tesla superchargers or otherwise, fully occupied. Most start costing extra if left on the charger too long, an incentive to disconnect and move out. Comes down to common courtesy and changing people’s habits. You wouldn’t park your car at a gas station to go shopping, would you?
You don’t need a ton of infrastructure when your gas station is the electric outlet in your home. New EV’s have range far greater than anyone’s daily commute. So, unless you are travelling, it doesn’t matter. Then the hotel you stay at or a rest stop etc on the way needs infrastructure. You don’t need a gas station at every corner.
Not everyone owns their own home = private charging station. The future wave is for people to live in multi-story condos. That’s the only way to protect the balance of nature by not destroying any more natural lands. And what about the millions people who live in apartments? There is a multitude of drivers who will need access to public charging stations or pay for autonomous vehicle transportation provided by private companies.
I live in a condo in Mexico. They have charging facilities for each condo down in the parking garage. I assume it is the same in the States at this juncture. Not a problem.
Well, at least your name is correct – old guy. You are part the problem. “I can’t wait to take them to court.” Sit in your fear of future. Travis is right. There will be less accidents not more.
I’m an “OG” myself and I for one am waiting anxiously for EVs to become the norm and autonomously driven vehicles as well. If I can read a book while I travel I won’t be staying pissed off (can I say that here?) the whole time by the stupid human drivers. Not all OG’s live in fear of the future. At least not this part of it.
NEVER LET A TEENAGER DRIVE…. they have ACCIDENTS!
NEVER LET A DRUNK DRIVE….. THEY HAVE ACCIDENTS!
NEVER LET A FRAUDSTER DRIVE….. THEY HAVE ATTORNEYS!
DAMN, SURE GLAD THIS GUY HATES PROGRESS!
I BET HE STILL DRIVES HIS 1919 FIRD MODEL T, and likely has a guy, for and aft with EITHER a FLAG, or a LANTERN and a “TOWN CRIER” SCREAMONG OUT WARNIBGS TO ALL THE DELICATE LADIES OF THE NIGHT THAT HE IS SPEEDING DOWN THE ROAD AD 7 MPH!
AIN’T PROGRESS GRATE?
The range is pathetic? 600 miles is a pretty good distance for a single charge. And battery technology is getting even better all the time. Just on that comment alone I can tell you don’t know what you are talking about when it comes to autonomous or EVs.
Maybe sue half the bad drivers that bash into you or someone else everytime…. more drivers kill others than driverless will ever , as computers and AI dont fall asleep or look at there phones and get distracted and kill people. I can assure you we will save many moire lives once we dont have dummies driving on the road and cars driving for them. Insurance rates might even come down with lower number of accidents once the all the tech is proven out and Tesla has billions of km of testing and data already
All the talking heads are missing the point entirely by suggesting that ANY stock purchases be made now. All evidence clearly points to at least a 40-60% drop in the stock market. If anyone has a money left, we might then consider buying on the drop!!! Forget dip.
The trouble is that evidence of future events can be hard to find with certitude. All we know for sure is what happened today, and what stocks are priced at today.
I’m also concerned about another meaningful drop in stock prices at some point in the coming year… but I don’t really know whether it’s a 20% likelihood or 50%, so I try to be ready for both ups and downs and keep my mind focused on 2025-2030 as much as I can
2025-2030? I think that what life and investments will be like then is even more uncertain than it will be for the coming year. However FWIW I think that we are in for a big shakeup over the next year or two, probably including at least one more gut wrenching market drop. So while I think Nvidia is a good bet for the reasons you have expressed, as well as some of their other interests, I will be holding off until there is more “blood in the streets”.
Thanks again for the analyses Travis.
Lower earnings, less buybacks and massive debt vs the Fed and fiscal stimulus is impossible to model.
I agree with you, but the economic destruction that has been done by a worldwide shut down is so enormous that you can only compare it to the Great Depression. US citizens are fortunate because of the Fed and Stimulus packages, but worldwide things are going be tough for quite some time even if we get the economies open relatively quickly. Many corporations are over leveraged due to buybacks funded by debt, consumers are always a paycheck or two away from disaster and Covid 19 could keep reappearing over the next 18 months to disrupt things.
Michael Osterholm opened my eyes to the fact that I had way too much risk in my portfolio and Ray Dalio confirmed it in his Ted Talk “What Coronavirus means for the world economy”. I’m treating the current “rip the heads of the shorts” rally to reduce risk and prepare for making bets on the short side. I’m hoping the gap in QQQ at 230 gets filled as that will be my entry point on the short side.
Long term, I’m a firm believer in America 2.0 but there is going to be a ton of creative destruction between here and there.
Or it goes away like all flu when the warmer weather hits.
Yes, amid the fearmongering about SARS 2 – renamed Covid 19, sounds sexier – being ‘inevitable’ – did SARS 1 (2002) return? Did Swine flu (2010) return? Can we afford to destroy the economy for 8-10 years every 8-10 years so that people in their 80’s and 90’s can live longer?
Covid19 was named such when they identified the virus. The other viruses you mentioned are out there but due to herd immunity are not the problems they were. Covid 19. In 7 weeks went from 15 cases in the US to 1.3 million and nearly 80 thousand deaths, plus patients with permanently damaged organs, lungs, hearts, etc. your promotion of ignorance to this novel pandemic is startling. This virus can be passed while asymtomatic and while viral shedding where one is contagious it can be spread to higher numbers of people than the normal flu or common colds. Leaders should set examples, real leaders do, and mask up. Children and people in the prime of their lives are also dying. The death rate will soon exceed 3000 a day in the US and you could potentially be one of them. I suggest you read the CDC website and not get your misinformation from Fox Pundits. This is a serious 100 year pandemic with a novel virus which we have no immunity to. Being crippled permenantly by this virus also occurs which makes this a particularly damaging virus. And Len, it does not go away When warmer weather hits. If such were true, in areas in southern latitudes where they had summer it would have diminished such as Southeast Asia, Africa, Arab desert nations, because Trump babbles mistruths and wistful thinking, it doesn’t make it true.
Mr. Johnson, thank you so much for your deductions, I am really grateful. I’d just finished watching the ad video, and googled my question and happily got your well-educated guesses. I’ll look over what you’ve generously provided and will choose one or two. It feels apparent to me that this industry will be burgeoning before long. Thanks!
First off – He Wilson probably has investments in the company. That is the only reason he would let us in on his “secret”, so we can drive up the buy.
On the “wet coast”, ride sharing is emerging as a good transport option. Going to electric vehicles, w. much better maintenance costs, will increase the demand for EV’s. That plus ride sharing will decrease demand for fossil fuel vehicles. I hope Washington helps shift production from fossil-based vehicles to EV’s by strongly supporting, or requiring recipients of federal aid to invest in the next-gen of vehicles, and not just throw $ at the “Big-3” automakers.
Asking the govt to fund private business is flat out wrong. Let capitalism work. If EV’s make sense the private businesses will get there on their own.
I believe that the ‘big 3″ automakers should be transitioned in to being a part of this isomorphic advancement, even if it is solely for design. After all, where would we be if we hadn’t had the opportunity to stand on the shoulders of these “giants” in order to get where we are today?
Because we have become a “disposable society,” don’t throw tradition away just to get ahead, but rather embrace it and work it into the fabric of the future.
While the gov’t did bail them out a few years back (at least 2 of them), the gov’t still offers the tax incentives for EVs that play big in buying decisions. It did in mine.
For this intrepid woman driver whose great Aunts snd grandmothers ALL drove IN THE 2920’s!
No driverless cars centrally controlled from somewhere, for this ladies league!
This Dr. THINKO rooter could call these AI SDV’s devices “lemming mobiles!” Just takes a rogue command!
Somehow, though not paid as a professional driver, this commenter, like many of the same era, has driven a ton!
All over Europe, Autobahn! The Alps in all kinds of weather!
Later! As a gov’t medical care auditor, job was typing, and driving! Just did almost as much paper and pen hand writing, checking 11,000 medical chart reviews, drove 1.35 M “otj” miles!
But practically for sanity’s sake truly needed the time in a vehicle not freed-up to type more citations, or read more copies of “charts”- which could happen as ALREADY, NOW, job activity does not cease!
Bosses in for- profit businesses now subtly press competitiveness into all this new electronic portable job tools’ employee access created with everywhere, every hour reachability!
As I left my job before things got so hectic and lap tops were still viewed as an semi luxury, expensive piece not worth handing out to laborers, as a field worker’s paper-work job was not in need of such an expensive, high risk
job tool as recently as in 2011!
Now the time clock is not even shackled to one’s ankle as was feared..,it’s worse!
Calling bosses to worker’s cell phones and pc’s at all hours have made workers work constantly! Unpaid beyond 40, dilutes hourly pay based “salaries!”
So lounging while riding as if on a commuter train, in a computer car, for this hard worker, not a fun prospect! Dodged that ball!
Have bought fuel cell stock!
Electricity from batteries (unless green energy sourced) has a carbon foot print! Battery charging is still slow! Dragging the heavy weight of massive batteries adding to payload weight of the just-charged-up energy being consumed by my electric car!? That is nonsensically repeated often! That concept of battery operation by stored once combusted energy makes only regressive sense-like there has hit to be s better idea!
The image of a story of a first responder (police) sitting by the road with a dead Tesla; the thief long gone! If just seems too impracticable to use universally as reliable work vehicles!
Given my job history. Can see myself on a dark road at night on a field assignment -staying in a hotel-, not having enough time or a handy charge location to-re-charge, before leaving the audit site !
Then the Worst. Being accosted, not assisted, out there stalled or even waiting out the charge…a real labor safety liability to any one, but especially. a solo female worker otj !
Add self-driving central office-head-quarters potential right to cost account our charging times, our autonomous riding paper work task time during traveled miles, will make field work “otj” life unbearable!
The main issue is pollution from gasoline engines-smog, lung illnesses!
Even ultra cheap gasoline, lowest ever modern prices, will not make it more appealing to air-polluted regions like Asia, and Europe!
Neither one Electric cars, nor Self-driving cars have to me appeal!
Hate the thought of loss of autonomy…”Over the cliff…you lemmings!”
A driver who has driven since age 9 with no accidents, or tickets (so no risk to GEICO!)starting with learning to drive on a farm, surrounded with dirt town roads taught by my Grandfather in his retired to the farm, once deluxe 1936 Buick sedan! By modern standards as simple as a well padded large lawn mower; well finished, simply engineered…Dark ages? No! Mothers of small kids often drove them in these routinely! It had a very long gear handle to shift with three on the floor! I was necessarily tall, since it had a large farm truck-like odd flat front wind screen, a high window edge, with no dashboard!
Makes it sound like like this newer retiree lived pre-1900’!
➡️Independent minds will clash with this article’s theme of advancement requiring a centralization! A systemically imposed concept of progress!
Do not like the anxious feeling of being driven by someone who drives worse than I do! Even a robot!
So when I read this pumping piece it seemed a bit classicist!
IE.-Chauffeurs, where I grew up in NE, denoted some noticeable folks’ lack of engagement in life! Seeking a mood of emancipation in a selected helpless, un-resourceful state of mind! Where money allowed them to avoid living lives filled with really interesting self-determination!
To each one’s own…work takes all sorts of shape!
Prof. THINKO! Do not stop making the business-world’s view of life feel palpably essential, real …usefully interesting!
Marion
Wow. So much writing and I can’t follow any of it. It’s as if your brain was replaced by a battery.
That’s funny, but I thought the same thing!
Funny times three. Just when I thought I had found a lucid thought . . .on to the next muddled thought.
…tom…
So, Marion, in your millions of miles you’ve never taken public transportation that involved a human pushing buttons in response to computerized commands from a central locale, or flying in a plane that is “manned” only during takeoff and landing as the majority of time is on autopiliot, and even then relies heavily on sensor information?
This “lemming” still enjoys the thrill of driving, enhanced by the power and intelligence of my EV. And one thing not mentioned here is the possibility of even participating in the TaaS as I could allow my autonomous car to bring in extra income instead of resting idle in a parking lot.
THANK YOU TRAVIS !
EXACTLY WAT I WAS THINKING ABOUT WHITNEY TILSON ……brag ra, brag
HIS SUCCESSES, NOT FOR OURS!
KEEP THINK ING, THINKO- LATOR!!
BOB HAHN
What about MOTLEY FOOLS DOUBLE DOWN STOCK???
The Fool has teased several stocks as “double down” opportunities in the past few years, as I recall, including Markel (MKL), Arista Networks (ANET), Shopify (SHOP) and Match Group (MTCH). Each ad is different, but they all sound similar.
So far as double down – best thing to come out of the financial crisis (and I am being facetious of course, ruined businesses etc. are a tragedy), best thing is the temporary demise of Stansberry’s daily hustle to go all in on his sure-win stocks.
What happens when electric vehicles get in an accident out on the road? Don’t their damaged/destroyed batteries generate hazardous substances? My brother claims that special crews in Haz Mat suits will have to come to the accident scenes to clean things up. Will the Environmentalists be happy with all of this hazardous waste from crash sites soaking into the ground and running off into the water supply?
Dear Travis…this comment I am posting has nothing to do with this particular article. I just wanted to express my sincere appreciation for the work you do on your website. Your investigation skills are in-depth and educational. I look forward each week to your e-mails as I am bombarded with promotional material from investing sites. You give me a way to fact check this information. I also use your newsletter scorecard to evaluate these offers. Keep up the good work!
Craig W
I agree with you ragman4gk, Travis is an amazing researcher and like you use this to fact check all the bombardment of ads.
Thanks Travis
I recognize “Taas” slightly differently although in the same Transportation field, namely; “Tires as a service” which is attributed to Bridgestone. With their purchase of the Tom Tom Fleet solutions in Europe, renamed Webfleet, watch out for this developing phenomenon.
Man this guy is a relentless promoter. I was curious what all this “TaaS” is about and am not impressed. I think these vehicles will grow and I’d love to have a semi-autonomous car that could take over on those long highway drives where all you have to do is stay in the lane and not hit the car in front of you. With construction so common on highways (where they change the lanes and may not even repaint the lines) you still need to stay awake 😉
I believe that nvda is the real winner in this space.
More BS from boiler room stock sellers try to push worthless stock like the pot stocks what a waste
JON: Pot stocks NOT a waste for everyone. Been wanting to tell my story sort of anonymously to someone but not everyone. I started in ’05 with $25K (.05 /share) into a basic startup re booking/inventory system. Best friend told me his neighbor’s brother was just STARTING a company. Yrs later, the company switched interests to CBD. This buy by me was a combo of brain damage & “hearing a voice”. I’m not a wealthy man. I just had $100K to play with. Went from .05 to .10, sold some. Went down to .01, bought a few million more shares. I did buying over the yrs here, eventually putting in $215K until 2019. Was doing $10K to $15K a pop over the yrs. Another goofy move was in November of ’17 or ’18 there was some big happening re Canada. I bought 26 CBD stocks, not all penny stocks. $3K to $5K a pop. Wow, this was easy. Sold all except 9 @ an OK profit in ’19. Last Feb ”20, my .05 stock went to .74 cents. I sold enough to get ALL my invested $ back. The stock now down to .07, but company has a lot of good things ready to happen. Still have 7 1/2 million shares. Wife, early in our marriage was happy I stopped gambling until she found out about my $100K stash ( had prior marriage) & 25K investment. She still hates gambling, but do I care? Hell no & LUCKY ME. Admittedly a 50% investor, 50% gambler. Just sayin.
,
I read Tilson’s TAAS teaser pitch and then out of curiosity to find out which stocks he’s hinting at, I came across your site. Your articles indeed make an interesting read.
I’m based out of India and am quite active in the stock markets. Here’s my take on the current scenario :
(1) First Goal – Preserve liquidity to ensure survival till the threat of Covid-19 is gone. It would be wiser to move savings into gold rather than hold cash.
(2) Second Goal – Think about how I’ll achieve regular income stability in the “new normal” scenario.
(3) Third Goal – Avoid investing now because, over the next 12-15 months there’ll be terrible volitality in the markets. I’m pretty sure the markets will tank at least a further 50% from the present levels.
Frankly speaking, the economic lockdown has brought down world economies on their knees. Having never witnessed such a situation in the past, investors are at a complete loss on how to lay their future bets. In my view, nothing can be predicted till the threat of Covid-19 is completely beaten. Hence, sitting pretty is the best thing to do as of now rather than getting sucked in to make any investments in the stock market as of now.
Firdaus, I’m on the same page as you! Are you buying physical gold coins or gold stock?
Tony Seba I believe was the guy who originally came up with this TAAS concept, which he has been expounding for years. If you have an hour to spare, I highly recommend you view this latest presentation on how it all ties together (EVs, solar, self-driving):
https://www.youtube.com/watch?v=y916mxoio0E
Check out Exro and their more efficient electric motor technology that could solve some of the range problems for EVs.
Electric vehicles might work in a large city, but they don’t cut it for long distance or rural travel. Too much time to recharge! We have to look at Hydrogen powered vehicles for Truckers, farmers, and rural travel. They are lighter and quick to refill. Plug Power and Ballard seen to be the leaders in this field at this time. Once demand and production of them rises, they will be cheaper than electric. Maintenance might be higher though.
that’s where the teasers for the new batteries come in. the one’s with solid electrolyte. They are supposed to charge as fast as pumping gas into your tank.
He mentions one more stock under #4 Small Speculation. I think this is Velodyne Lidar
I have 2 comments about electric vehicles. First, if all the vehicles on the road now instantly became electric would there be enough electricity to keep them all running? When I lived in California they were having rolling power outages and such fairly often. Second, will at some point it be discovered that driving around in electric vehicles causes cancer? Much like their has been some talk about cell phones and electric razors maybe doing so.
Good point on the first, but lost me on the second tangent. What doesn’t cause cancer?