Waymo’s 6th Generation of Robotaxis: Will It Galvanize Profit?

• Waymo is ditching the current 5th generation system for its new 6th generation hardware, a move that will usher in new vehicles built from the ground up.

• The 6th generation hardware is largely made in China, by a company known as Zeekr, which is owned by Geely.

• The major goal of Waymo’s 6th generation of robotaxis is to lower the cost of production and move the company towards profitability.

Waymo, the self-driving car company owned by Google’s parent company, Alphabet, has been working on autonomous vehicles for over a decade. In 2020, Waymo launched its robotaxi service in Phoenix, Arizona, and has since expanded to other cities, including San Francisco and San Diego.

Waymo is undeniably leading the charge in the U.S. autonomous vehicle sector, thanks to its unmatched experience and technological advancements. One of the clearest indicators of this leadership is the company’s recent announcement that it has completed over 100,000 fully autonomous trips per week across its service areas. 

This milestone isn’t just a number; it shows that Waymo’s technology is maturing, and people are actually embracing it. Also, it’s a testament to the company’s extensive testing, data collection, and improvements in safety and efficiency.

“At this point, the fully autonomous driving industry is really just an industry of one: Waymo,” former CEO John Krafcik, who is now a board member at the EV automaker Rivian, told The New York Times.

Waymo has also incredibly surpassed Uber, Lyft in customer retention. Over 33% of Waymo customers returned 13 quarters after their first transaction, leading both Uber and Lyft according to Earnest credit card data.

Waymo’s current market dominance has never been in doubt. But, there is one major challenge: profitability.

While the company has recorded humongous successes in the self-driving industry, profitability for Waymo (and many other AV startups) remains a distant target.

Alphabet’s Investment in Waymo

Alphabet, Google’s parent company, is fully committed to Waymo. The exact investment sum is shrouded in secrecy, but it is widely believed that Alphabet has poured tens of billions of dollars into Waymo since its inception. The company’s recent announcement of a new $5 billion multi-year investment in Waymo further solidifies this commitment. 

In 2018, Morgan Stanley valued Waymo at a staggering $175 billion, suggesting significant investment up to that point. In 2020 and 2021, Waymo raised over $5 billion in external funding, indicating continued substantial investment from Alphabet and other investors.

Waymo’s Profitability Dilemma

While Waymo currently leads the charge in autonomous vehicle technology, turning a profit has been a real challenge. The biggest issue? The hefty costs tied to its current fleet, especially the Jaguar I-PACE SUVs. These luxury cars, while showcasing Waymo’s focus on safety and quality, come with a steep price tag—around $100,000 each—which makes profitability feel pretty far off.

Even with a robust ride-hailing network and a growing customer base in cities like Phoenix and San Francisco, the revenue generated has not been sufficient to cover Waymo’s hefty expenses. According to reports, Waymo’s parent division lost a staggering $2 billion in the first half of 2023​, with a chunk of that loss reportedly coming from its self-driving arm.

Is the 6th Generation Robotaxi a Path Toward Profitability?

Waymo’s sixth-generation robotaxis, set to replace the Jaguar I-PACE models, represent a crucial pivot for the company. This new generation is manufactured by Zeekr, an electric vehicle company owned by Geely. The decision to move away from high-cost luxury models and toward more cost-effective electric vehicles is seen as a strategic move to lower operational costs and, potentially, galvanize profitability.

In a blog post, Waymo said the sensors in its 6th generation robotaxis “are optimized for greater performance at a significantly reduced cost.” But how significantly reduced the cost was, was not stated. However, there are rumors that Waymo is trying to match a recently seen announcement of a $28,000 cost for Baidu’s new robotaxi.

If the Chinese company can do it, so can Waymo.

Typically, one of the major factors that contribute to making ride-hailing robotaxis expensive is the cost of AV components. They are pretty expensive. For example, a Lidar sensor costs about $5,000. But there’s a silver lining. When these components are bought in bulk, the price tends to go down drastically. For instance, Lidars that are $5,000 today are forecast to be under $200 when bought by the millions. Hopefully, with Waymo’s strong financial standing, they should be able to go this path.

What Level of Driving Autonomy is Waymo’s 6th Generation Robotaxis?

Waymo’s 6th generation robotaxis operate at Level 4 autonomy.

This means they can perform all driving tasks under specific conditions without any human intervention. However, they might still have limitations in handling certain complex scenarios or challenging weather conditions, and may require a human driver to take over in those situations.

You May Also Like:

18 Key Components of Electric Vehicles (A Complete Teardown)

Driverless Technology: Key Components of Autonomous Vehicles

Key Features of Waymo’s 6th Generation Robotataxis

• Purpose-Built Design: Unlike previous generations that utilized modified existing vehicles, these robotaxis are designed from the ground up for autonomous operation.

• Custom Sensor Suite: The new vehicles boast a comprehensive sensor array, including 13 cameras, 4 lidar units, 6 radar sensors, and external audio receivers. This combination provides 360-degree visibility and perception capabilities, enabling the Waymo Driver system to navigate complex urban environments safely and efficiently.  The number sensors in the 6th generation model is far less compared to the 5th generation, but they are reportedly smarter. Waymo says the new Waymo Driver is designed to function maximally, even in harsh weather conditions.

• Enhanced Range and Performance: The collaboration with Zeekr leverages their expertise in electric vehicle technology. These robotaxis are expected to offer an extended range and improved energy efficiency, crucial for maximizing operational uptime and reducing costs.

• Passenger-Centric Interior: With no need for a traditional driver’s seat or controls, the interior is designed with passenger comfort and convenience in mind. Expect spacious seating, ample legroom, and potentially features tailored for entertainment or productivity during rides.

• Testing Protocols: Waymo’s 6th-generation system currently undergoes a combination of closed course testing, simulation, and public road testing.

Key Facts About China-based Geely/Zeekr

Geely Holding Group:

• A multinational automotive manufacturing company headquartered in Hangzhou, China.  
• Owns several well-known car brands including Volvo, Lotus, Proton, and Lynk & Co.  
• One of China’s largest privately owned automakers.

Zeekr:

• A premium electric vehicle brand launched by Geely in 2021.  
• Aims to compete with Tesla and other high-end EV makers.  
• Focuses on advanced technology, performance, and luxury.

Notable Zeekr Models:

• Zeekr 001: The brand’s first model, a luxury shooting brake with impressive range and performance.
• Zeekr 009: A large, luxurious MPV targeting the premium family segment.  
• Zeekr X: A compact SUV with a focus on urban driving and technology.

Technology and Innovation:

• Zeekr vehicles utilize Geely’s Sustainable Experience Architecture (SEA) platform, designed specifically for electric vehicles. 
• They feature advanced battery technology, fast charging capabilities, and autonomous driving features.

You May Also Like:

• Ten Amazing Things to Know About Waymo in 2024
• 10 Interesting Things to Know About Kodiak Robotics in 2024
• Ten Things to Know About Aurora Innovation in 2024
• Top 20 Autonomous Vehicle Companies in the U.S. (2024)
• Understanding ADAS in Autonomous Vehicles and How It Works

Conclusion

Waymo’s switch from costly Jaguar I-PACE models to the more affordable Zeekr electric vehicles is a crucial step in its journey toward profitability. The cost savings from these new robotaxis, combined with continued advancements in self-driving technology, could galvanize Waymo’s prospects of turning a profit. 

But challenges remain. For instance, the U.S. government had placed a 100% tariff on electric vehicles import from China, with the goal to shield firms from Chinese excess production.

Case in point: Chinese EV companies have a supply chain 25% cheaper than the U.S. But the U.S. government, apparently, does not want millions of robotaxis produced from China.

“We’re monitoring the China tariff situation closely,” a Waymo spokesperson told Automotive News.

It remains to be seen how Waymo will circumvent this seeming setback, although no disclosures have been made.

The new generation of robotaxis is a critical step forward in Waymo’s vision of revolutionizing transportation while achieving sustainable financial success.