Investment firm Nightview Capital has released a new blog post highlighting the long-term potential of autonomous driving technology, particularly for Tesla. The post, shared by Sawyer Merritt on X, argues that autonomy is “the killer app for real-world artificial intelligence” with massive revenue potential.

Autonomy as the Real AI Revolution

Nightview Capital believes Sequoia Capital’s recent viral essay on AI’s value missed the mark by overlooking autonomous vehicles. They assert self-driving cars are already on roads today, with Tesla and Waymo “quite literally driving the next great transformation across transportation.”

The firm emphasizes the real-world impact of autonomous vehicles, stating:

“Here’s the bottom line: autonomy is the killer app for real-world artificial intelligence. A colossal transformation. Machines that think, move, and transport goods and people are a true game-changer. Tesla and Waymo, in our view, are quite literally driving the next great transformation across transportation. It’s one that we believe could reshape industries, disrupt traditional business models, and create unimaginable value.”

Tesla’s Exponential Progress

Nightview highlights Tesla’s rapid advancement in autonomous tech:

Over 1.6 billion miles of Full Self-Driving engaged as of June 2024
FSD packages sold for $99/month or $8,000 upfront
$3-4 billion investment in Nvidia hardware for AI training in 2024

“The pace of improvement is accelerating, and the destination to full autonomy is very clear,” the post states.

They note that while it took Tesla roughly four years to achieve one billion miles of accumulated FSD data, the next billion could accumulate in just months.

Massive Market Potential

The firm projects autonomy could generate trillions in revenue by 2030 through multiple streams:

Direct software sales to consumers: As autonomous features improve, sales could increase dramatically through one-time purchases, subscriptions, or pay-per-use models.
Licensing fees to other manufacturers and fleet operators: Companies with proprietary autonomous tech, especially Tesla, could generate substantial revenue by licensing to others.
Ride-hailing services: Autonomous ride-hailing could drastically reduce operating costs and increase profitability, potentially generating “multiple trillions in revenue annually.”

Nightview sees a “100x difference in viewpoints” compared to Sequoia’s estimates, believing autonomy could reshape industries and create “unimaginable value.” They anticipate a “Cambrian era of new revenue streams” as autonomous vehicles become ubiquitous.

Waymo’s Progress

The post also highlights Waymo’s advancements, noting they’re now conducting 100,000 paid rides per week as of August 2024. Nightview points out that Waymo’s market share in San Francisco’s ride-hailing market has grown from less than 0.1% to 2.1% in just one year – a 2,000% increase.

Long-Term Vision

Nightview Capital emphasizes the need for a long-term perspective when evaluating AI and autonomy investments. They argue that focusing on immediate returns misses the bigger picture:

“It’s not about where the technology is today; it’s about where it could be in a few years from now.”

The firm believes autonomous vehicles could transform various sectors beyond just transportation, including logistics, healthcare, and retail. They highlight key features of autonomy:

2-3x higher utilization rates compared to average vehicles today
Significant reduction in transportation input costs (labor, energy, insurance)
New platforms for emergent business models

EVXL’s Take

This bullish outlook on autonomy aligns with the transformative potential of electric vehicles. As discussed in our recent Tesla coverage, the combination of EVs and self-driving tech could revolutionize transportation. While challenges remain, the progress made by companies like Tesla and Waymo is undeniable.

The potential for autonomous EVs to reduce costs, increase efficiency, and create new business models is immense. As we’ve seen with Tesla’s advancements in both EV technology and autonomous driving, the future of transportation is rapidly evolving.

What do you think about autonomy’s future impact on the EV industry and beyond? Share your thoughts in the comments below.