Software Platforms as Engines of Change: AV Cooperation Overview

Article By : Egil Juliussen

Pandemic and safety are overhauling AV's engine of change. In the last two weeks alone, multiple partnerships and acquisition deals have popped up...

The pandemic and safety are overhauling AV’s engine of change. Over the last two weeks alone, a host of partnerships and acquisition deals have popped up in the AV market. The moves include: Waymo picking up Volvo as a new customer; Nvidia partnering with Mercedes-Benz; Zoox selling to Amazon; Uber acquiring Postmates, and TuSimple launching an AV freight service with UPS and McLane.

While the Covid economy is a leading reason for these events, the realization of how difficult the development of software, especially the safety aspects, is another key factor.

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We will break this down, first by posting the following table that looks at the leading U.S autonomous vehicle (AV) software platforms. The middle column lists which AV segments the software platforms are targeting. The right column lists their partners and customers. The recent activities are marked in red. I will primarily discuss the recent announcements.

AV's engine of change
(Source: Egil Juliussen)

Waymo picks up Volvo as a new customer
In late June Waymo announced it had a new customer in the Volvo Car Group with likely usage by its related brands Polestar and Lynk.

It is interesting that Waymo’s Volvo announcement blog states that the Waymo Driver is “well-suited for ride hailing, local delivery, trucking and personal car ownership.” This shows that the Waymo Driver software platform is targeted for the main AV use-cases. Waymo also said: “We focus on custom designing our hardware suite, software, and compute.” It will be interesting to see how this affects the automotive Tier 1 suppliers when volume deployment of AVs starts in a few years. Will some of the Tier 1 automotive supplier produce the hardware needed for the Waymo Driver software platform? I think that Waymo will license Tier 1s to do the hardware manufacturing, including the processor hardware.

Volvo is also cooperating with Uber and there are questions on how this will impact that relationship. The plan was that Volvo would deliver AVs to Uber for robo-taxi use. These future Uber AVs are likely to use Volvos with Waymo Driver software platform.

The Waymo-Volvo cooperation looks like a very good deal for both companies. With Waymo being the acknowledged AV software leader, Volvo L4 AVs for robo-taxi use could happen relatively quickly.

Nvidia partners with Mercedes-Benz
Nvidia and Mercedes-Benz announced an ambitious and extensive cooperation that ranges from ADAS (assisted driving) to AV systems. It is ambitious because the development includes a new electronic system architecture for all microprocessor-based control systems (ECUs). Minimal details are available except that the ADAS and AV ECUs will use Nvidia’s DRIVE AGX Orin platform for all new and updated models starting in 2024. Nvidia and Mercedes-Benz also emphasized that the system architecture will be software-defined and upgradeable through the lifetime of the vehicles.

It is likely that the system architecture will be based on domain ECUs that are connected via a backbone Ethernet and probably local Ethernets for the most complex domain ECUs. This will be advantageous for built-in cybersecurity and OTA software updates, which are now required for all new auto electronics architectures. This looks like a win-win for both companies with Nvidia getting the biggest win portion.

Mercedes-Benz Jilts BMW, Elopes with Nvidia

There are a few implications and questions from the Nvidia and Mercedes-Benz announcement. It looks like Mercedes-Benz gave up on developing its own AV platform and suspended the cooperation with BMW on AVs. Mercedes-Benz also had a project with Bosch to develop and test L4 AVs in California and it is not clear where that is going.

It looks like Nvidia will develop an AV software platform for robo-taxis and other AV use-cases. Will Nvidia compete in the AV software platform market segment with Waymo, Cruise, Argo, Aurora, and others for robo-taxis and other AV use-cases? To me it looks like Nvidia will become a strong AV software platform competitor in some of the AV use-cases — at least in robo-taxi segment, which will eventually evolve into L4 personal AVs.

Zoox sold to Amazon
Zoox has taken a different approach to developing its robo-taxi by developing both an AV software platform and a custom vehicle architecture with 4-wheel steering and no distinction between going backward and forward. The Covid economy impacted the VC investment environment and increased the risk of obtaining enough future VC investments to complete Zoox’s ambitious AV software platform and new vehicle platform. This is the likely reason why Zoox started looking for an acquisition partner. Amazon looks like a good parent for Zoox even if the estimated price was much lower than the peak valuation ($1.2 billion versus $3 billion). Amazon is planning for Zoox to continue developing its robo-taxi software platform. Amazon is also expected to use the Zoox software platform for goods AVs. Amazon can also leverage the specialized vehicle architecture for future goods AVs.

Amazon already has considerable expertise in goods AVs. It has developed a sidewalk AV, Amazon Scout, with extensive testing taking place in Snohomish County, Wash. Amazon Scout started package delivery field tests in January 2019.

Amazon is also a leader in warehouse automation and is using over 100K warehouse robots in its fulfillment centers worldwide. These warehouse robots are essentially specialized goods AVs with technology that can be leveraged to develop other types of goods AVs.

There is one important question. How will the Zoox acquisition impact Amazon’s investment in Aurora? Will Amazon participate in future Aurora VC investment rounds?

TuSimple works with UPS and McLane
The autonomous truck segment was already growing its testing activities and it got a boost from the Covid economy’s growing transportation needs. TuSimple have been testing autonomous trucks by delivering freight between Arizona and Texas for several years.

On July 1 it launched an AV freight service with UPS and McLane as customers. US Xpress Enterprises, a trucking firm, will also use TuSimple’s freight network in the future. The U.S. Postal Service has also participated in earlier AV testing. TuSimple currently operates freight routes between Phoenix, Tucson, El Paso and Dallas with plans to expand to Houston and San Antonio in 2021. By 2022, TuSimple plans to have coast-to-coast network from Los Angeles to Jacksonville, Fla., via Interstate 10.

TuSimple has 40 AVs currently with 10 more planned in 2020. The AVs currently use a safety driver and an engineer for safety reasons. The goal is to go driverless sometime in the future. In 2024 TuSimple is planning an autonomous freight network (AFN) by adding major shipping routes throughout the lower 48 states.

Uber buys Postmates
Uber’s development of its own AV software platform may not be the best strategy — especially since Covid is straining its resources as the ride-hailing business has dropped a lot. Probably it would be better to use Waymo’s software platform. This would also resolve the lawsuit between the two companies.

Uber just acquired Postmates for $2.65B to greatly increase is delivery business. Deliveries have increased dramatically during Covid economy and is likely to retain many of these new customers. These deliveries are currently via many types of vehicles—from bicycles to motorcycles and cars. Goods delivery market is projected to be a major AV segment in a few years.

Several other companies are included in the table: GM Cruise,, Aurora, Aptiv, Mobileye/Intel and Nuro. They are included as they are leading AV platform suppliers and will be discussed in a future column.

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