In the previous lesson, an introduction to the first area of focus in the ARK report was provided.AI agent, this week's lesson will focus on another innovative area that Wood is bullish on—Robotaxi.

As technology continues to evolve rapidly, Robotaxi is moving from science fiction into real life, indicating that transportation methods are about to undergo monumental changes.

So, what is the current development status of Robotaxi? How will the future market prospects unfold? Who will be the leader in this wave of transformation? What potential investment opportunities await us to discover?

ARK's forward-looking views and predictions on Robotaxi

To help everyone better understand the future trends of Robotaxi, we have organized and summarized ARK Invest's three core viewpoints and predictions regarding autonomous taxi services:

1. Exponential growth in scale

By 2030, the scale of global autonomous ride-hailing cars will reach 50 million, creating about 10 trillion dollars in market opportunities.

2. A revolutionary decrease in operating costs.

By 2035, the operating costs of autonomous ride-hailing cars are expected to drop to $0.25/mile, achieving over 90% cost compression compared to current American traditional taxis ($2.5/mile) and Online Car-hailing ($1.5/mile), fundamentally changing the travel economic model.

3. Bipolar competition between China and the United States, Tesla may account for half of the market.

ARK believes that by 2025, the Robotaxi market will be dominated by companies from China and the United States, with major participants including:

➤ US market:$Tesla(TSLA.US)$、Waymo($Alphabet-C(GOOG.US)$）、Zoox（$Amazon(AMZN.US)$）

➤ China Market: Apollo Go ($Baidu(BIDU.US)$）、$Pony AI(PONY.US)$、$WeRide(WRD.US)$

Among these major players, Tesla and Waymo, with their leading positions in autonomous driving technology, are expected to gain a competitive edge in the Robotics taxi industry. ARK predicts that this oligopoly competition pattern will continue until 2025, and further forecasts that by 2030, Tesla may capture 50% of the market share, becoming the industry leader.

Tesla VS Waymo

Currently, the autonomous driving market is mainly dominated by Tesla and Waymo. So, who is better between Tesla and Waymo? What is their current level of technology?

First, I want to introduce a very hot concept in the autonomous driving circle — levels of autonomous driving. The American Society of Automotive Engineers categorizes autonomous driving into six levels, from Level 0 (fully manual) to Level 5 (fully autonomous driving), similar to levels in a game from bronze to king.

Currently, Tesla has achieved Level 2 autonomous driving, while Waymo has achieved Level 4 autonomous driving in specific areas.

This means that Tesla is more like a novice driver, with the driver needing to be ready to take control at any time; while Waymo is more like an experienced old driver, capable of handling most situations independently, but can only operate along familiar routes in specific areas.

After understanding this concept, we will compare the performance of the two in three key areas to help better understand their current development status in the field of autonomous driving technology:

1. Technical routes: Software-driven vs Hardware-driven

In terms of core technology, Tesla and Waymo are taking completely different routes, with Tesla primarily software-driven, while Waymo focuses more on hardware.

Tesla: Software-driven

Achieving end-to-end control (FSD system) based on cameras and neural networks, relying on real-time driving data for model training, continuously improving its autonomous driving system.

• Advantages: Collects vast amounts of real-time traffic data, high efficiency in AI training; low hardware costs, easy scalability for mass production.

• Disadvantages: The complexity of actual driving situations leads to long learning and iteration times for neural networks; limited in extreme weather conditions (heavy fog, heavy rain), requiring manual takeover.

Waymo: Hardware-driven.

The combination of LiDAR + high-precision maps + imaging radar + cameras covers 360-degree environmental perception. It does not rely on customer data but mainly collects data through its dedicated fleet of self-driving cars, providing a detailed and comprehensive view of the surrounding environment.

• Advantages: Handles complex road conditions more stably, sensor redundancy enhances safety, capable of more independent operation.

• Disadvantages: High hardware costs, reliance on customized sensors; replication across cities requires remapping high-precision maps, geographical coverage is limited.

II. Cost and Sustainability: Economies of scale vs. long-term cash burn.

Tesla: The potential for marginal costs to approach zero.

As battery costs continue to decline and scale effects come into play, Tesla is expected to achieve a cost of less than $0.25 per mile by 2035, with marginal costs approaching zero.

Waymo: High initial hardware costs and slow scaling.

The hardware cost for each Waymo self-driving car is approximately $0.14 million, with a lifespan of about 4 years. Furthermore, Waymo's technological roadmap makes it difficult to compress hardware costs, resulting in relatively slow scaling. According to Alphabet's second-quarter Earnings Reports, the 'Other Businesses' Sector, which includes Waymo, incurred a loss of $1.13 billion in that quarter, highlighting significant pressure on its financial sustainability.

3. Commercialization Path: Aggressive Commitments vs. Steady Expansion.

Tesla: Multiple delays under the aggressive route.

Musk's repeated cycle of 'commitment-delay' (multiple postponements of L5, currently still at SAE Level 2 automation) will pilot the first Robotaxi service in Austin by June 2025, potentially leading to a landmark breakthrough.

In 2015, Musk predicted that 'full automation' would be achieved by 2018.

In 2017, Musk promised that within two years, drivers would be able to sleep inside the car while driving.

His prediction continues: By 2020, there will be 1 million self-driving taxis, by the end of the same year, there will be "fully functional" FSD, and by the end of 2021, level 5 autonomous driving will be achieved.

Waymo: The cautious king in limited areas.

Waymo has taken a more cautious approach— steadily implementing a "city replication" model, with about 700 driverless cars already operating passenger services in cities such as San Francisco, Los Angeles, Phoenix, and Austin, while Austin, Atlanta, and Miami have also been listed as targets for service expansion. Now, Waymo operates fully autonomous taxis in certain cities - without human safety drivers.

[Course Review] To help everyone better compare the differences between Tesla and Waymo, we have organized a comparison chart for reference, and everyone can review it again.：

Market perspective: How to view the subsequent development of both?

In the long run, compared to Waymo, ARK is more bullish on Tesla, mainly because Tesla has a large data lake from customer vehicles, providing a significant advantage in data scale and manufacturing capability. Although Tesla is not the first company to offer an autonomous driving platform, ARK believes that Tesla is likely to become the first company to scale up autonomous driving technology.

In fact, both Tesla and Waymo face their own challenges. Tesla's autonomous driving system still needs further maturation, while Waymo needs to make efforts in cost control and financial sustainability. Overall, the key to the future development of these two companies will be how to find the right balance between technological innovation and cost control.

So how should one invest in Robotaxi?

1. Focus on technology leaders:

As industry benchmarks, Tesla and Waymo (Google) should be closely monitored for their technological advancements and business models. Additionally, Zoox (Amazon), which is under Amazon, is also demonstrating innovative business applications in the field of autonomous driving, which is worth paying attention to. In the domestic market, Baidu's Apollo Go and Pony.ai show strong growth potential, and their subsequent developments are worth anticipating.

Apollo Go ($Baidu(BIDU.US)$) has launched autonomous driving services in multiple cities in China, operated through the Luo Bo Kuai Pao App.

Zoox ($亚马逊 (AMZN.US)$): focuses on the development of unmanned taxis and plans to launch customized Robotaxi vehicles, currently in the testing phase.

Xiao Ma Zhixing ($小马智行 (PONY.US)$): the world's first publicly listed autonomous driving company with Robotaxi as its core business.

2. Attention to the Industry Chain behind Robotaxi:

The Robotaxi industry chain mainly covers multiple sectors such as Battery, sensors, electronic components, and car parts, with specific upstream and downstream companies listed below:

LiDAR: $Hesai(HSAI.US)$、$Luminar Technologies(LAZR.US)$、$Innoviz Technologies(INVZ.US)$、$QUANERGY SYSTEMS INC(QNGYQ.US)$and;

Visual perception and chips:$NVIDIA(NVDA.US)$、$Intel(INTC.US)$、$Qualcomm(QCOM.US)$、$Mobileye Global(MBLY.US)$、$Samsung Electronics Co., Ltd.(SSNLF.US)$、$ON Semiconductor(ON.US)$Wait for;

High-precision maps and positioning:$Trimble(TRMB.US)$、$TOMTOM NV(TMOAF.US)$Wait for;

Domain controller:$ZEEKR(ZK.US)$Wait;

3. Investment related ETF

$Global X Autonomous & Electric Vehicles ETF(DRIV.US)$: Aimed at investing in companies that have made advancements in areas such as electrification and intelligent driving technologies, covering autonomous driving Industry Chain companies like Tesla, Google, Baidu, NVIDIA, and Intel.

$ARK Autonomous Technology & Robotics ETF(ARKQ.US)$: Funds under ARK Invest, betting on disruptive technologies, heavily invested in the fields of autonomous driving and Robotics, such as Tesla, Google, and Amazon.

$Ishares Self-Driving Ev And Tech Etf(IDRV.US)$: Integrating autonomous driving and electric vehicle technologies, covering the entire chain from Cars manufacturing to technology integration.

4. Event-driven strategy

Key product launches: Focus on Tesla's FSD version upgrades (such as V13), Waymo's new city operating license, etc.

Policy catalysts: For example, California in the United States easing restrictions on fully unmanned testing, expansion of Robotaxi operational areas in pilot cities in China.