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The effort to commercialize fully autonomous vehicles has spawned an array of supporting hardware and software technologies whose impact could extend well beyond AVs.

The big picture: Fierce competition during the mobile computing boom led to better, cheaper components — cameras, batteries, wireless chips — that in turn transformed technologies from satellites to drones. A similar process could play out with AVs, as the billions of investment dollars pouring into the sector enable advances that spill over into retail, health care and other parts of the economy.

Details: These second-order benefits could come from several AV–related technologies.

Sensors: The low-cost, high-performance laser sensors being developed for AVs will find use cases in numerous other industries. Lidar maker Quanergy is already looking beyond AVs, expanding its target markets to include industrial automation and physical security. 

Simulation: AV programs are investing heavily to build simulation software that trains neural networks in virtual environments using "synthetic data." This technology could democratize machine learning by reducing the need for companies to collect massive proprietary real-world datasets — with applications from warehouse robots to senior-care assistants to military drones.

Mapping: Highly detailed 3D maps designed to enable AV navigation could find uses in advertising, retail and urban planning. For instance, a company could serve a tailored, augmented-reality experience to a customer in a precise location — perhaps to entice them into a store.

Core machine learning capabilities: AV research is driving advances in general machine learning capabilities like object recognition, prediction and path planning that have applications across industries. From leveraging computer vision to monitor crops in agriculture to using image analysis to automate diagnosis in health care, AI companies will benefit from the basic research coming out of the AV world.

What to watch: At present, AV companies are still struggling to make self-driving cars a reality. Expect the benefits of these nascent technologies to play out over the long term.

Rob Toews is an investor at Highland Capital. Previously, he worked on strategy at Zoox. 

The spillover benefits of AV technology could be wide-ranging

The potential applications span health care, retail and agriculture, among other industries.

scientist sitting next to a lidar-equipped drone outdoors in Antarctica

A researcher taking lidar measurements for 3D maps of Antarctica's Horseshoe Island. Photo: Ozge Elif Kizil/Anadolu Agency/Getty Images

Transportation

Autonomous vehicle technology

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Axios Pro: Deals

The effort to commercialize fully autonomous vehicles has spawned an array of supporting hardware and software technologies whose impact could extend well beyond AVs.The big picture: Fierce competition during the mobile computing boom led to better, cheaper components — cameras, batteries, wireless chips — that in turn transformed technologies from satellites to drones. A similar process could play out with AVs, as the billions of investment dollars pouring into the sector enable advances that spill over into retail, health care and other parts of the economy.

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

As autonomous vehicle companies plan for commercial robotaxi deployments, they're weighing everything from city layout to weather in selecting launch markets.

Why it matters: Robotaxis will not be available everywhere at the same time. AV companies must choose cities to start with — a critical business decision that will determine which populations are first exposed to this technology and how it further develops.

Details: Companies must balance a range of factors to determine which cities are most attractive.

Market size: The larger the city, the greater the business opportunity.

City layout: Densely populated cities enable ride-hailing fleets to serve the entire passenger base more efficiently. Simple city layouts and nearby airports are also advantageous.

Regulations: U.S. states vary widely in their receptiveness to AVs, from extremely permissive (Arizona, Florida) to more demanding (California) to downright hostile (New York).

Climate: Since sensors and computer vision systems still struggle with inclement weather, expect the first AVs in markets with no snow and little rain.

Energy infrastructure: A robust electric grid is a key consideration for companies deploying EV fleets.

Competition: City infrastructure and regulators may not support more than one major AV player in any given market, at least initially.

Where it stands: These criteria are already shaping deployment plans.

Large populations, sunny weather and lax state regulatory regimes have led Waymo to Phoenix and lured Ford to Miami.

Aptiv has made a big bet on Las Vegas. Though a smaller market, Las Vegas' ideal climate, strong tourist economy and flat gridlike layout make it a logical beachhead.

Both Zoox and General Motors subsidiary Cruise have gone all-in on the more complicated San Francisco market, whose unofficial status as the global tech capital no doubt played a role. Its large metropolitan area and good weather are offset by challenging local regulations and a notoriously difficult driving environment.

What to watch: These companies will ramp up their presence in their chosen markets over time as they gradually push from testing to commercialization. Expect larger fleets, a bigger real estate footprint and, eventually, heavy advertising to consumers.

Rob Toews is an investor at Highland Capital. Previously, he worked on strategy at Zoox.

How AV companies are picking their U.S. launch markets

Size, weather, regulations and infrastructure all factor in.

GM Cruise test self-driving vehicle driving through an intersection

A GM Cruise test vehicle in San Francisco. Photo: Andrej Sokolow/picture alliance via Getty Images

Automakers

Cities

Automation and AI

As autonomous vehicle companies plan for commercial robotaxi deployments, they&#x27;re weighing everything from city layout to weather in selecting launch markets.Why it matters: Robotaxis will not be available everywhere at the same time. AV companies must choose cities to start with — a critical business decision that will determine which populations are first exposed to this technology and how it further develops.

As leading autonomous vehicle companies seek to bring “robotaxis” to market, their competition could extend from AI-powered software into a new arena: real estate.

The big picture: Today's ride-hailing companies are software-only platforms. But as AV technology goes commercial, companies that plan to own and operate fleets of robotaxis — including Waymo and GM Cruise — will need considerable real estate footprints to store, clean, refuel and repair thousands of vehicles.

Where it stands: AV companies are focusing their robotaxi commercialization efforts on cities, which offer the densest population centers and largest markets. Some have already started to snatch up choice real estate: GM Cruise in San Francisco, Waymo in Phoenix, Ford in Miami and nuTonomy/Aptiv in Las Vegas.

Details: Within each launch city, robotaxi operators will need to find real estate parcels that satisfy a particular set of requirements to support their go-to-market efforts:

Large enough to park hundreds or thousands of vehicles at a time

Strategically located in or near neighborhoods with a high density of ride-hailing demand

Equipped to provide a massive daily power draw from the city’s electric grid, potentially requiring proximity to an electric substation (for EV fleets)

The catch: The U.S. has a finite number of large and attractive launch cities, particularly after factoring in regulatory and climate considerations. And in any given city, there are limited real estate parcels that will check all of these boxes.

To minimize the costs of trips that don't generate revenue, companies will want to locate these operations facilities near cities' commercial centers, where passenger demand is concentrated. 

But they'll have to balance that consideration against the real estate prices that can be staggeringly high in downtown areas.

The bottom line: As more companies get serious about bringing robotaxi services to market, real estate strategy could become an increasingly important part of the AV competition. Expect plenty of land grabs.

Rob Toews works on strategy at Zoox and is the co-founder of SHFFT.

Real estate is emerging as an AV battleground

Waymo, GM Cruise, Ford and nuTonomy/Aptiv are already snatching up city lots.

Illustration of for sale sign with license plate that reads "4sale"

Real estate

Business

As leading autonomous vehicle companies seek to bring “robotaxis” to market, their competition could extend from AI-powered software into a new arena: real estate.The big picture: Today&#x27;s ride-hailing companies are software-only platforms. But as AV technology goes commercial, companies that plan to own and operate fleets of robotaxis — including Waymo and GM Cruise — will need considerable real estate footprints to store, clean, refuel and repair thousands of vehicles.

Ominous forecasts about the impact of climate change serve as the backdrop for the world — led by U.S. lawmakers and companies — to debate big action on the problem, which could upend energy systems and our way of life.

Energy & Environment

Despite the greater hype around fully self-driving cars, a growing number of companies are developing AV technology for industries like agriculture, construction, mining and maritime shipping.

Why it matters: Many of these sectors use human-operated vehicles in structured, repetitive, non-public environments: Think tractors driving down rows of crops or pickups shuttling materials across a construction site. Applying AV technology in such constrained settings could offer a more straightforward path to market — and an equally compelling business case.

By the numbers: Though often considered unglamorous and overlooked by entrepreneurs and venture capitalists, these industrial markets are among the largest in the world.

Construction is an $11 trillion global industry. Agriculture is a $5 trillion global industry. For mining, the figure is $600 billion; for maritime shipping, $500 billion.

The impact: In these settings, AVs would face fewer deployment challenges compared to autonomous commercial passenger vehicles, while improving safety, cost and productivity.

Increased automation could reduce accidents and injuries in construction and mining, which remain among the most dangerous industries in the U.S.

An autonomous tractor or construction vehicle could operate close to 24 hours a day, vastly improving commercial productivity.

In agriculture and construction, labor can represent up to 50% of a company's costs. Given the added strain of labor shortages in these sectors, automation could reduce labor costs and boost profitability.

Yes, but: Automating these functions would entail some technological unemployment, a tension most industries will have to grapple with as AI spreads throughout the economy.

Where it stands: These opportunities attract less buzz than self-driving cars, but a small group of startups is actively targeting them.

Built Robotics is piloting autonomous construction vehicles, starting with track loaders for excavation.

Bear Flag Robotics retrofits tractors with autonomous technology, enabling farmers to automate tasks like spraying, mowing and ripping.

Other companies are working on autonomous maritime vessels. Shone is focusing on large cargo ships, and Sea Machines on a wide range that includes ferries, patrol boats and survey vessels.

The bottom line: "Constrained autonomy" is an under-explored but potentially massive opportunity. Expect more entrepreneurs and investors to take notice.

Startups pivot to AVs for farming, shipping and more

Tech challenges and regulatory hurdles have held up self-driving passenger cars.

Illustration of a tractor giving off sensor waves.

Despite the greater hype around fully self-driving cars, a growing number of companies are developing AV technology for industries like agriculture, construction, mining and maritime shipping.Why it matters: Many of these sectors use human-operated vehicles in structured, repetitive, non-public environments: Think tractors driving down rows of crops or pickups shuttling materials across a construction site. Applying AV technology in such constrained settings could offer a more straightforward path to market — and an equally compelling business case.

Rob Toews

Stories

How AV companies are picking their U.S. launch markets

The spillover benefits of AV technology could be wide-ranging

Startups pivot to AVs for farming, shipping and more

Real estate is emerging as an AV battleground