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Illustration: Rebecca Zisser/Axios

There's a growing realization on Wall Street that self-driving cars are still many years away. That pessimism is weighing far more heavily on traditional automakers than technology companies.

The big picture: Investors are betting the real value of AV companies will come from the estimated 4 terabytes of data each car will generate per day. And based on the way they’re valuing the major AV players, Wall Street seems to think tech companies have a better shot than Detroit at capitalizing on that data.

The bet on data helps to explain why analysts at Morgan Stanley have very different views on the two leading AV companies.

  • Auto analyst Adam Jonas recently reduced the value of GM's self-driving car unit, Cruise Automation, to $9 billion, from $11.5 billion, citing delayed expectations for fully self-driving cars.
  • Meanwhile, tech analyst Brian Nowak figures Alphabet's self-driving car unit, Waymo, is worth $37 billion, and perhaps as much as $175 billion, citing future opportunities from robotaxis, logistics and licensing revenues.
  • Those same opportunities are available to Cruise, too, but for the moment, GM investors are focused more on the roadblocks ahead.
  • Jonas says the massive gap between Cruise and Waymo is realistic because of the advantage Waymo has from Google's superior data analytics capability.

What's happening: The mood has changed about automated vehicles. Bold predictions by Tesla and others that cars would be able to drive themselves by now have evaporated in the face of technology challenges and market realities.

The business model for AVs assumes that by removing the driver, the cost per mile falls dramatically, from today's $2.50 or $3 per mile, to less than $1, unlocking a much larger market opportunity.

  • "If you are going to be more pessimistic on the timing, then it means not removing the safety driver and that means the economics of the whole thing don’t work," Jonas says.
  • "Instead of a $30,000 car with no human, you've got a $300,000 car with one or two humans."

That math looks even more difficult when you factor in the pressures facing GM's legacy automotive business under CEO Mary Barra, who is trying to lead a rapid transformation. It's a race, says Jonas, between management's execution and a cyclical downturn ahead.

The bottom line: "The value is in the data and what you can do with it," says Jonas.

Go deeper

Chris Cuomo accuser: On-air "hypocrisy" spurred report

Journalist Chris Cuomo. Photo: Gilbert Carrasquillo/GC Images

A woman who accused fired CNN journalist Chris Cuomo of sexual misconduct said Sunday she decided to come forward after learning of his comments about women who made similar accusations about his brother. He denies her allegations.

Why it matters: Her attorney Debra Katz said in a statement that she heard "the hypocrisy" of his on-air words about his brother, former New York Gov. Andrew Cuomo, and was "disgusted by his efforts to try to discredit these women," so "retained counsel to report his serious sexual misconduct against her to CNN."

Updated 4 hours ago - Politics & Policy

Omicron dashboard

Illustration: Shoshana Gordon/Axios

  1. Health: CDC director says number of U.S. Omicron cases "likely to rise" — Two years of COVID-19 — Prior coronavirus infections may not protect well against Omicron.
  2. Vaccines: Data demonstrates most-vaccinated counties less vulnerable to worst of COVID — Omicron adds urgency to vaccinating world — Omicron fuels the case for COVID boosters.
  3. Politics: Nevada to impose insurance surcharge on unvaccinated state workers — New Jersey GOP lawmakers defy statehouse COVID policy — Oklahoma sues Biden administration over Pentagon vaccine mandate.
  4. World: Vaccine mandates lose steam in the U.S. while Europe doubles downWHO: Delta health measures help fight Omicron — COVID cases surge in South Africa in sign Omicron wave is coming.
  5. Variant tracker: Where different strains are spreading.

Vulnerable Democrats: Less Trump talk

Illustration: Aïda Amer/Axios

Vulnerable House Democrats are convinced they need to talk less about the man who helped them get elected: President Trump.

Why it matters: Democrats are privately concerned nationalizing the 2022 mid-terms with emotionally-charged issues — from Critical Race Theory to Donald Trump's role in the Jan. 6 insurrection — will hamstring their ability to sell the local benefits of President Biden's Build Back Better agenda.

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