Since its inception in 2016, the American autonomous driving industry has undergone two significant rounds of consolidation. Despite some companies being forced to exit the market, the industry continues to thrive and is poised to gain an early advantage in the global autonomous driving competition.

Recently, the American autonomous driving industry has once again come under the spotlight. Cruise, once a "unicorn" valued at up to RMB 200 billion, lost financial support and was absorbed by its parent company, General Motors, with the latest news indicating a plan to lay off half of its staff. Additionally, a Tesla Cybertruck was involved in an accident while in autonomous driving mode, reigniting public doubts about the reliability of Tesla's autonomous driving software. Furthermore, the latest data from the California Department of Motor Vehicles (DMV) shows that the total test mileage of autonomous vehicles in California decreased by 50% in 2024 compared to the previous year. Some industry insiders view this as a reflection of the consolidation trend within the industry, which contrasts sharply with the earlier enthusiasm. However, given that several major American autonomous driving companies are still accelerating their progress and that national and local policy environments remain favorable, the industry is still in a rapid development phase and is expected to secure an early advantage in the global autonomous driving competition.

The Fall of the "Unicorn" Cruise

Despite several American autonomous driving companies exiting the market in recent years, the industry was still shocked when General Motors officially announced its abandonment of Cruise. As the second-largest autonomous driving company in the United States, Cruise's valuation once reached $30 billion (approximately RMB 200 billion) and was seen as a strong competitor to Waymo.

In 2013, Kyle Vogt founded Cruise in San Francisco. The company demonstrated strong technical research and development capabilities from the outset, launching the RP-1, a prototype with autonomous driving capabilities in high-speed scenarios, within about half a year. It then quickly shifted its focus to the development of Robotaxi (autonomous taxis). In March 2016, Cruise, as a dark horse, was acquired by General Motors for $581 million, causing a sensation in the industry at the time. After the acquisition, Cruise operated independently as a subsidiary, and its two founders became the youngest senior directors of General Motors. Subsequently, Cruise received substantial financial and technical support for an extended period.

This was an era when autonomous driving technology was highly anticipated and unprecedentedly popular. In 2016, Google's self-driving project became independent, giving rise to Waymo. Uber officially released test photos of its self-driving cars and soon launched the first batch of self-driving vehicles for trial operations in Pittsburgh. Technology experts resigned from Google one after another to found Otto and Argo AI. Also in 2016, the US government issued the first federal policy document on autonomous vehicles, facilitating the smooth testing of driverless cars and laying the foundation for the subsequent development of the industry.

The United States has always been at the forefront of one of the important application scenarios of autonomous driving technology – the Robotaxi field, and Cruise was one of the "trendsetters." In February 2022, Cruise announced the opening of Robotaxi services to the public. As of September 2022, the company had operated 100 Robotaxis in San Francisco and announced plans to expand its fleet to 5,000 vehicles.

However, due to the technology not being fully mature, the "Great Leap Forward" was accompanied by inevitable risks. In 2023, Robotaxis in San Francisco were allowed to operate around the clock, meaning that driverless cars could provide paid taxi services to the general public. This was seen as a milestone event for the commercialization of autonomous driving technology globally. However, after Cruise became one of the first "pioneers" to try this, it encountered numerous setbacks, including traffic accidents causing passenger injuries and causing traffic congestion that led to public dissatisfaction. The most serious accident involved a Cruise autonomous taxi repeatedly running over and dragging a pedestrian who had fallen to the ground, causing severe injuries. In response, American regulators cracked down severely, and the state of California revoked Cruise's passenger and fee licenses, forcing the company to suspend all driverless operations. Soon after, Cruise's two co-founders, Kyle Vogt and Daniel Kan, both resigned.

Realizing that the technological value was far off, the "big spender" behind Cruise – General Motors – was finally unwilling to "burn money" anymore. At the end of last year, General Motors announced that it would stop providing financial support to Cruise due to the excessive time and cost required to expand its business scale and increasing competition. After nearly a decade and over $10 billion in research and development investments, Cruise's technical team merged with General Motors' team to focus on the development of assisted driving systems for personal vehicles.

In February of this year, Cruise President and CEO Craig Glidden wrote in an email: "Due to the strategic changes we announced in December last year, Cruise will lay off nearly 50% of its employees. As Cruise shifts from the driverless taxi business to providing autonomous vehicles to customers together with General Motors, there have been significant changes in our staffing and resource needs. These measures will enable our team to meet our new requirements and concentrate on continuing to build world-class autonomous driving technology."

Two Rounds of Consolidation, Industry Trend Gradually Emerging

Cruise's exit is actually just a microcosm of the elimination race in the American autonomous driving industry. Since the great prosperity of the American autonomous driving industry in 2016, it has undergone two rounds of centralized consolidation.

The first large-scale consolidation occurred in 2020. In early 2020, Starsky Robotics, a startup focused on unmanned truck research and services, announced bankruptcy and shut down all operations. Founded in 2015, the company was also once a "darling" of capital, with total funding exceeding $21 million, including $16.5 million in Series A funding alone in late spring 2018. Its investors included well-known investment banks such as YC (Y Combinator) and Shasta Ventures. In the year before the announcement of its shutdown, Starsky Robotics' trucks were the first driverless vehicles to run on American highways.

In addition to bankruptcies and shutdowns, there were also many cases of reorganization and integration during this period. In 2020, Uber officially sold its autonomous driving department ATG to Aurora. This marked Uber's departure from the autonomous driving race. The reasons behind this were similar to those of General Motors at the time: ATG was then an unprofitable "hot potato" in Uber's hands. In the year before the shutdown, ATG only generated $42 million in revenue for Uber, but its investments amounted to $500 million. According to Uber's pre-IPO prospectus, the valuation of the ATG department was approximately $7.2 billion, and Uber had already invested over $3 billion in this business.

In the same year, the autonomous driving company Zoox was acquired by Amazon for $1.2 billion, and Nuro acquired the then-autonomous trucking company Ike. The following spring, Cruise acquired another startup, Voyage, while Uber's rival Lyft finally succumbed to pressure and sold its six-year-old autonomous driving business to Toyota's Woven Planet. The transaction price at the time was approximately $550 million.

Around 2023, the American autonomous driving industry ushered in its second round of consolidation.

In October 2022, Ford officially announced that Argo AI, the autonomous driving company jointly invested in by Ford and Volkswagen, would be closed and dissolved, with employees and some components being taken over by Ford Motor Company and Volkswagen AG, respectively. It is reported that the company's valuation once reached $7 billion, with a cumulative fundraising of $2.6 billion and a team size of up to 2,000 people. In December 2022, Quanergy announced that the company had initiated an orderly sale process for its business. Founded in 2012, Quanergy was one of the earliest companies to develop lidar devices for automotive applications. In early 2023, Alex Rodrigues, the founder of Embark, an American autonomous trucking "unicorn," announced that 70% of employees were directly laid off, with the remaining 30% handling the company's shutdown process. From its successful backdoor listing on the US stock market in 2021, with a market value of up to $5.2 billion (RMB 36 billion), to its fall, Embark took less than two years.

By 2024, the American autonomous driving industry showed a further trend of consolidation, with capital cooling down, and many companies adopting strategic contraction measures. At the beginning of 2024, Aptiv announced that it would stop investing in Motional and even consider significantly reducing its shareholding in the company. Aurora Innovation announced a layoff plan of about 3% in January. The DMV's report also reflects the same trend to a certain extent. According to the latest data, the total test mileage of autonomous vehicles in California in 2024 was 4.5 million miles, a decrease of 50% compared to the previous year. Among them, the total test mileage of the driverless category was only 552,900 miles, a year-on-year decrease of up to 83%. Over the past three years, the number of test permits issued by the DMV for vehicles equipped with human drivers has also decreased significantly, with 4, 2, and 1 issued in 2022, 2023, and last year, respectively. Among the current 31 companies holding test permits for vehicles equipped with safety drivers, only 11 actually conducted public road tests last year.

Waymo to the Left, Tesla to the Right

So far, the American autonomous driving industry has produced only a few notable successes, among which Waymo and Tesla are considered the two leading "giants."

Waymo was the autonomous driving project that Google first launched in the industry in 2009 and spun off independently in 2016. In 2020, Waymo became the first company to provide fully driverless taxi services to the public. While the American autonomous driving industry was undergoing consolidation and clearout, Waymo was moving forward against the trend, especially by continuously expanding its service area last year. In June 2024, Waymo opened its driverless travel services to all users in San Francisco; in August, it announced that the number of weekly paid travels by driverless vehicles in the United States had exceeded 100,000, doubling from 50,000 in May; in October, Waymo's weekly paid travel services reached 150,000; and in November, Waymo announced the official opening of driverless taxi services to the public in Los Angeles. As the second-largest city in the United States, Los Angeles has a population of about 4 million and an area of 1,215 square kilometers.

According to public information, Waymo currently has about 700 driverless cars and operates Waymo One, the only commercial driverless taxi service in the United States. It has completed 4 million paid services within the year and currently provides over 150,000 travels per week for passengers in San Francisco, Los Angeles, and Phoenix, covering more than 500 square miles of public roads.

For Waymo, its biggest rival at present is probably only Tesla, although this "competitor" has not officially entered the race. Last year, Tesla unveiled its Robotaxi driverless taxi service, two fully autonomous driving models, Cybercab and Robovan, and launched wireless inductive charging technology for Robotaxi. According to the plan, Tesla's driverless taxi Cybercab will launch ride-hailing services in Texas and California in the United States in 2025 and achieve mass production in 2026.

Unlike Waymo, Tesla has chosen a different technical route – no high-precision maps + pure vision solution. It is understood that Waymo One vehicles are equipped with a total of 13 cameras, 4 lidars, and 6 radars, and their safety level in avoiding injury-causing collisions is 3.5 times higher than that of human drivers. Of course, its cost is also "scary": the hardware cost of each Waymo autonomous vehicle is approximately $140,000, with a service life of about 4 years. In addition, Waymo has to invest operating costs in its continuously expanding fleet, and from lidars, millimeter-wave radars to computing platforms, Waymo has basically achieved full sensor self-research and development. According to Alphabet's second-quarter financial report, the loss of the "Other Bets" segment to which Waymo belongs reached $1.13 billion in that quarter.

In comparison, Tesla's costs are lower. Analysis indicates that through a series of cost optimizations, Tesla may reduce the cost of a single Robotaxi to $15,000, with operating costs 30% to 40% lower than those of Waymo. This is mainly because Tesla abandoned lidars, so the hardware cost is only one-fifth that of Waymo. Coupled with Tesla's self-developed batteries, motors, chips, and integrated production mode, the manufacturing cost is also 50% lower than that of Waymo. It is speculated that with the same capital, the scale of vehicles that Tesla can deploy will be 7 times that of Waymo. Assuming an average of 20 orders per vehicle per day and a passenger fare of $10, the annual revenue potential exceeds $25 billion, close to one-third of Tesla's total revenue in 2023.

A Crucial Year: Who Will Stand Out?

The research department at CICC regards 2025 as a pivotal year for the evolution of autonomous driving. Currently, the regulatory landscape in the United States is undergoing continual enhancement, marked by a permissive stance at the federal level, while autonomous driving applications across various states exhibit a flourishing vitality. Despite the industry's overall spiral of continuous advancements and validations, the diversity of autonomous driving technology pathways and the absence of a clear frontrunner make it uncertain who will ultimately distinguish themselves.

CICC highlights that Waymo and Tesla are merely embarking on the commercialization journey of autonomous driving, with the technological victor yet to be determined. The route competition is anticipated to persist in the medium to short term, although it is evident that both parties' technical approaches will gradually converge in certain directions. "Autonomous driving is not a straightforward objective that can be achieved overnight; rather, it is a complex and gradual systematic process." The agency emphasizes that development cannot be achieved in a single leap but relies on incremental technological breakthroughs, expanded mass production capabilities, progress in commercial explorations, and adaptability to dynamic market demand shifts. Through the mutual influence and refinement of these aspects, the industry gradually matures and perfects, advancing and optimizing along a winding path, ultimately realizing the vision of safe, efficient, and reliable autonomous driving.

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