Autonomous Vehicles Will Reshape Society, Tesla Poised to Lead the Charge

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In a recent appearance on Bloomberg Radio’s “Bloomberg Surveillance” (watch the full interview here), Wedbush Securities Global Head of Technology Dan Ives made a bold prediction: “If you’re born today, there’s no chance that you’re going to ever need a driver’s license.” This statement, delivered with Ives’ characteristic conviction, underscores the rapidly accelerating development of autonomous vehicle technology and its potential to fundamentally reshape society. This echoes a long-held belief of Ives, who, as he revealed in the interview, made a bet shortly after his daughter’s birth that she would never need a driver’s license.

Ives, a prominent voice in the tech industry known for his often-bullish stances on Tesla, argues that full self-driving capabilities are no longer a distant dream but an imminent reality. He envisions a future where “Sweeney is getting into a cyber cab, no driver, taking him to play golf” within the next four to five years. This shift, Ives contends, represents “a whole new game” with far-reaching implications, impacting not just the automotive sector but also urban planning, real estate, and the very fabric of daily life. He emphasizes that this transition will be driven by both the increasing sophistication of autonomous driving systems and the declining driving skills of humans, citing the statistic that over 40,000 people die in car accidents in the US each year.

Central to Ives’ thesis is Tesla, the electric vehicle giant led by Elon Musk. He believes Tesla’s autonomous driving technology, known as Full Self-Driving (FSD), is significantly ahead of the competition, including Waymo, Cruise, and other players. “Very few people are actually experiencing how far along they are,” Ives stated, highlighting the disconnect between public perception and the reality of Tesla’s progress. He attributes this progress to Tesla’s vast trove of real-world driving data, collected from millions of vehicles equipped with FSD hardware. This data-driven approach, Ives argues, gives Tesla a significant advantage in training its AI algorithms and achieving true autonomy.

Ives’ optimism stems not just from data but also from personal experience. Recounting a recent test drive, he noted, “I tried the latest version of Tesla FSD for 20 minutes and had a couple of interventions. It’s not there yet, but it is remarkable the progress that’s making.” This hands-on approach, combined with his deep industry knowledge, allows Ives to provide insights that resonate with sophisticated tech executives.

This progress, coupled with the increasing number of Tesla vehicles on the road, positions the company to dominate the autonomous driving landscape. “7 million vehicles out there. You have 10 million vehicles over the next year or two,” Ives emphasized, contrasting this with Waymo’s fleet of just 200,000 vehicles. This scale, Ives argues, gives Tesla a significant advantage in terms of data collection and algorithm training, creating a powerful network effect that will be difficult for competitors to overcome. He points to GM Cruise’s recent scaling back of its autonomous driving ambitions as further evidence of Tesla’s growing dominance in this space.

Ives draws a parallel between Tesla’s FSD and Apple’s services business, arguing that autonomous driving will be key to unlocking Tesla’s true value and driving its market capitalization beyond the trillion-dollar mark. “When you think about Tesla, I would compare autonomous software FSD to Apple’s services relative to that Cupertino story. That’s why it’s so important.” This comparison resonates with tech executives who understand the power of recurring revenue streams and the high margins associated with software-based services. He highlights that Tesla’s current valuation does not fully reflect the potential of its FSD technology, which he believes could add a trillion dollars to the company’s market cap.

Furthermore, Ives believes that Trump Administration regulatory changes will further accelerate the adoption of autonomous vehicles. “Now you’re going to really see him [Musk] doubling down in and within the Beltway, there are many major changes. And when that knock at the door happens, it must.” Ives suggests that the Biden administration’s focus on electric vehicles and infrastructure investment will create a favorable environment for the development and deployment of autonomous driving technology. He believes that Musk, despite his past disagreements with the Biden administration, will be a key player in shaping these regulatory changes.

While Ives acknowledges that Tesla faces challenges, including competition, the complexities of scaling production, and ongoing scrutiny of Musk’s leadership style, he remains bullish on the company’s long-term prospects. He dismisses concerns about Musk’s reliance on government support, stating, “I disagree. I would argue you’re talking about he made a bet for the ages with Trump and essentially iced out.” He argues that Musk’s strategic decisions, such as aligning with the Trump administration early on and investing heavily in electric vehicle technology, have positioned Tesla for success regardless of who is in power.

Ives’ bold prediction that today’s newborns will never need a driver’s license may seem like science fiction to some. However, his deep understanding of the tech landscape, Tesla’s capabilities, and the shifting regulatory environment lends weight to his argument. If Ives is correct, the world is on the cusp of a transportation revolution, and Tesla, with its aggressive approach to innovation and vast network of data-collecting vehicles, is poised to lead the way. This message is likely to resonate with tech executives who are constantly seeking the next disruptive technology and investment opportunity.