Tesla, Nio, Robotaxi and the Future

Welcome to 2021. We are now entering the year where developed companies in the EV space have moved on beyond just manufacturing electric vehicles. Legacy automakers have underestimated the value of EVs and are now paying the price. Today, we look at Ford and GM as the underdogs of EV technologies. Modern retail investors today do not look at how many cars is sold but look at technologies that are going to play a big role in our future.

Tesla has been working hard with their Full Self-Driving (FSD) technology for a long period of time and is intending to reach level 5 autonomy. Level 5 autonomy is an exceedingly difficult challenge and very risky. No other car manufacturers would dare try to develop this technology yet. Level 5 autonomy is when the machine performs a task without the need of human intervention. Today, we are seeing level 1-4 but still require constant human intervention.

In late 2020, Tesla launched a new upgraded beta of their FSD. Many were impressed but still not in perfection. The FSD gathers data and learn then the system is updated every 5 to 10 days.

Nio is currently doing research with Mobileye to develop a level 4 autonomous driving. Intel is currently working with Nio to develop and design their own inhouse AI chip. Mobileye, which is also owned by Intel, is helping Nio on a robotaxi project. Nvidia is also partnering with Nio to develop their autonomous driving supercomputer, Adam. It is obvious that Nio is dedicated to moving forward with autonomous driving and robotaxi.

Tesla and Nio are not just car makers but they have graduated from it. Manufacturing EVs are awfully expensive and the margin in EV market is very thin. In order to maximize profits, EV companies must rely on additional technologies to increase their revenues. Autonomous driving software can be a high profit margin sale or be a software as a service (SaaS).

Over the next 5 years, Tesla and Nio will have the attention of many EV investors. These 2 companies are in a good position to manufacture EVs that are installed with robotaxi technologies.

How significant is robotaxi in our future? When you take an Uber ride, the most expensive part of the service is the driver. If you ever take a robotaxi, the price is much lower because the machine does not require a human driver. A fully developed robotaxi industry would not only be beneficial to car owners but also to people who do not own cars. Transportation would become more convenient and cheaper. People who do not own a car can still benefit from the robotaxi network and not worry about the long waiting period of regular taxis or public transportations. I believe that Tesla and Nio will lead many other car companies into manufacturing high quality EVs with robotaxi technologies.

As of today, Tesla is the only company that produce EVs with the capabilities to learn and improve. While there are still many years down the road, Nio is the only company to follow Tesla’s lead. I can not compare Nio and Tesla, but they are highly driven by aggressive innovation towards the transportation experience. This is the competition that the world needs. It is not about who sells the most cars, but it is about who can improve everyone’s lives. Where Tesla and Nio are succeeding, it is where GM, Ford and Toyota are failing. There is a big difference between companies who put their bottom lines first and the companies who put experience first.