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Comment by Fricken | Hacker News Reader

Bringing Robotaxis to market is very capital intensive. I don't know how much money GM has to throw around, but I'm pretty sure it's a lot less than their nearest competitor, Alphabet.

Waymo announced purchasing orders for 60,000 FCA Pacificas and 20,000 Jaguar IPaces to be converted into robotaxis. If we're to assume a crude ballpark estimate of $150K apiece for those vehicles, then we're talking a $12 billion just for that. GM can't go up against those kinds of capital investments without help.

Argo.ai, Ford's answer to GM Cruise, is also seeking partners/funding from outside Ford. Wish them luck.

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> Waymo announced purchasing orders for 60,000 FCA Pacificas and 20,000 Jaguar IPaces to be converted into robotaxis. If we're to assume a crude ballpark estimate of $150K apiece for those vehicles, then we're talking a $12 billion just for that.

You do know that GM makes automobiles right? If GM wants 60,000 Chevy Cruises to use for robotaxis, they can just keep their lines running for a few extra shifts. Their cost for the same vehicles is COGS, which is something like half the MSRP of an automobile. Doing so would actual increase the profit margin on their products that are sold to outside customers. GM also has ~40% more revenue than Alphabet and could easily borrow $12 billion if it were strategically important.

Man people really don't understand the weight of traditional autos.

Also, if you buy 20k cars from Jaguar (mind, 20k iPace is more than a month worth of Tesla Model 3s) you will be paying a lot less than 150k per car.

There's a lot of extra hardware that goes into a robotaxi. Waymo doesn't just sprinkle pixie dust on them to make them drive themselves. The vehicles, their sensors, compute, adn the 100 miles of wiring needed to hook it all up is just hardware costs. There's all sorts of logistics and real estate that needs to be acquired. Every new area needs to be mapped and tested. They run call centres, and pay thousands of people just to do data annotation.

The plan for all these companies is to scale up to deployments of millions of vehicles, they won't see ROI for a decade or more, and that's only if everything works like it's supposed to, it's still technically and unproven business model built on an unproven technology.

And sure GM can raise funds if they really want to, but they've gone from 0 to $60b in debt in the last 6 years, with $20 accumulated just over the last year. They have to deal with converting their fleet to electric over the next decade. Very expensive. Lots of risk. GM needs to pick and choose which risks are worth taking.

GM raised $3B in debt last year at nominal rates of 4%-5%.[1] In real, terms, that's maybe 2-3%. GM can raise billions from banks if it wants to. The fact that it would rather raise money by selling Cruise equity rather than selling bonds indicates that (a) they value Cruise at less than $15B or (b) they are risk-averse or (c) they see some other benefit from bringing equity partners on-board. It's not (d) they have no other good way of raising capital. GM is a huge company with a relatively low cost of capital (~5%).

https://www.barrons.com/articles/ge-replaces-ceo-and-investo...

"Bringing Robotaxis to market is very capital intensive". With the front and center approaches rooted in the DARPA Grand Challenges yes, with much of that money being spent on propping up simplifying assumptions that break at the tail end and on technologies that will be obsolete in a couple years. HD mapping curated by humans, human annotation for training/testing data, Lidars, and all that superfluous real world testing, will soon be replaced by approaches that are orders of magnitude more capital efficient. The less efficient approaches that currently dominate will sputter at 1% market penetration at best.

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