Waymo, Google/Alphabet's immense autonomous car company, has yet to begin any kind of commercial enterprise operations but that hasn't prevented Morgan Stanley from expecting a lot of potential for Waymo as it becomes the defacto leader in the self-driving market.
A year after his initial estimate that Waymo was likely a $75 billion startup, Morgan Stanley analyst Adam Jonas raised it to a staggering $175 billion, citing greater revenue potential from passenger ride services and licensing of its tech. The biggest source of future revenue, however, is likely to come from autonomous trucking and delivery services, which Jonas thinks could generate as much as $90 billion.
Waymo’s pilot program in Atlanta, in which the company is testing a small fleet of Peterbilt semi-trucks loaded with its sensors, software and computers to handle deliveries for Google data centers, points to a future in which it could “address roughly 80% of the ~$3.1trln global (~$900bn US) freight transportation market and evolve into a logistics player for long-haul and last-mile delivery,” Jonas wrote in an August 7 research note.
“Autonomous vehicles should eventually enable faster and cheaper last mile delivery, improving the customer experience by potentially enabling <1 hour delivery from local stores to the customers' homes rather than from a centralized warehouse to the customer, while narrowing the margin gap between store and eCommerce sales,” Jonas said. As a result, “Waymo could help traditional retailers better compete (from a cost and service perspective) against Amazon.”
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