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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

Restaurant software meets the pandemic moment

Illustration: Annelise Capossela/Axios

Food delivery companies have predictably done well during the pandemic. But restaurant software providers are also having a moment as eateries race to handle the avalanche of online orders resulting from severe in-person dining restrictions.

Driving the news: Olo filed last week for an IPO and Toast is rumored to be preparing to do the same very soon.

Bryan Walsh, author of Future
2 hours ago - Technology

How the automation economy can turn human workers into robots

Illustration: Sarah Grillo/Axios

More than outright destroying jobs, automation is changing employment in ways that will weigh on workers.

The big picture: Right now, we should be less worried about robots taking human jobs than people in low-skilled positions being forced to work like robots.

House passes $1.9 trillion COVID relief package

Photo: Screenshot via C-SPAN

The House approved President Biden's $1.9 trillion COVID relief package on a 219-212 vote early Saturday morning, sending it to the Senate for a possible rewrite before it gets to Biden's desk.

The big picture: The vote was a critical first step for the package, which includes $1,400 cash payments for many Americans, a national vaccination program, ramped-up COVID testing and contact tracing, state and local funding and money to help schools reopen.

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