Ex-Tesla board member reveals how he’s playing the EV boom
There’s one specific trend set to define the automotive industry, according to investor and former Tesla board member Steve Westly: self-driving vehicles. And he says investors should take note. “Waymo and autonomous vehicles are the future, flat out, end of story,” Westly, who sat on Tesla’s board between 2007 and 2010, told CNBC’s “Squawk Box Europe” on Friday. “And they’re coming quickly. In the San Francisco Bay area where I live, it seemed like science fiction just five years ago. Now, you see them everywhere. After you’ve done it once or twice, you completely forget there is no driver in the driver’s seat. This is the future,” he added. While the penetration of autonomous, or self-driving, vehicles is currently low, Goldman Sachs expects the number of these commercial vehicles on U.S. roads to grow from 1,500 currently to around 35,000 by 2030. This would see the burgeoning industry capture around 8% of all U.S. ridesharing trips and generate $7 billion in annual revenue, according to the investment bank. “Make no mistake, whoever wins this technology battle is likely to have the most valuable vehicle company in the world,” Westly said. “It’s coming faster than people think, not just in North America. China is moving ahead. Full bore competition is coming. Price is coming down, and it’s a good thing for the public, because it’s going to enable seniors, people with vision difficulties, et cetera, and women tend to prefer them because they’re safer,” he added. Tesla’s positioning The self-driving race is currently dominated by Alphabet’s Waymo, which is present in U.S. cities San Francisco, Los Angeles, Phoenix, Austin and Atlanta. The company has “done something extraordinary,” according to Westly. “They’re not only going from 12 million rides provided this year to 24 million next year; by the end of this year, they will have permitting — the first autonomous vehicle company to do so — to provide rides on freeways, not just in the cities. Once you can do cities and the freeways, that really opens the door to going global. This is going to be an interesting smackdown, as we say in the U.S.,” he said. For Tesla to compete, it must show that its promise of autonomous vehicles is “real” and that its much-hyped Optimus humanoid robots are coming, “and they’re a little behind on that,” Westly said. “So that’s the thing to keep an eye out if you’re an investor,” he added. Tesla’s robotaxis have a presence in Austin, Texas. They are also being rolled out in the Bay Area, California, and have been approved to expand to Arizona. The EV maker’s shares are up around 6.4% over the year to date, although this is well below the Nasdaq Composite’s 18% gain. Investors Tuesday will be looking for the company to follow up on the tease videos it released over the weekend, amid speculation that it could be gearing up to release a new car . Carmakers must go global Europe is also hoping to get involved in self-driving car development and adoption. “The automotive industry is a European pride, a new technology can save jobs and breathe new life into the sector. So the future of cars, and the cars of the future must be produced here in Europe,” European Union chief Ursula von der Leyen said on stage at Italian Tech Week on Friday. Von der Leyen announced that a coalition of 60 Italian mayors had “already expressed their interests” in setting up a network of European cities where “the first self driving cars can hit the road.” But for Westly, the winning carmaker will be present in every market. “To have a great car company in the past, you needed to dominate one of the three big markets, China, North America, Europe,” he said. “Now the rest of the world is becoming the important marketplace. Are you selling cars in India, Indonesia, Brazil, Vietnam? And that’s where BYD is really excelling with their $20,000 car. Tesla needs something in that market. If they’re going to challenge globally, we’ll see how quickly they can do it.”
