Motley Fool Money: "EV and Autonomy State of the Union"

Date: September 17, 2025
Host: Travis Hoyam
Guests: Lou Whiteman, Rachel Warren

Episode Overview

This episode provides a comprehensive "State of the Union" on electric vehicles (EVs) and autonomous driving, focusing on business models, technological progress, and investment opportunities. The discussion features in-depth analysis of major players (Waymo, Tesla, Rivian), their respective strategies, challenges, and the evolving dynamics between manufacturing and disruptive technology in the automotive sector.

Key Discussion Points & Insights

1. Waymo’s Progress in Autonomous Driving

• Waymo’s Milestone:
  • Has driven 96 million miles fully autonomously, currently operating in five cities, and preparing for more.
  • Announced expansion into Nashville via the Lyft network—boosting Lyft’s stock by over 10%.
  • Focuses on expensive, sensor-rich vehicles, bucking the “vision only” trend popularized by Tesla.
• Waymo’s Strategy:
  • Lou argues Alphabet’s deep pockets give Waymo an "unfair advantage," allowing for slow, methodical engineering rather than hype-driven growth.

    “Not everyone has Alphabet's money to fall back on... this has always been a kind of boring engineering culture versus a hype culture.” (Lou, 01:23)

  • Rachel attributes their success to precise, pre-mapped, geofenced deployments and a robust sensor suite (lidar, radar, high-res cameras):

    “They rely on these very detailed pre mapped environments which essentially act as a digital twin of the real world.” (Rachel, 03:33)

  • Benefits from lidar cost reductions (~90%) making high-end sensors more viable.
• Profitability and Public Skepticism:
  • Despite leading the pack, Waymo is not profitable—Alphabet’s "Other Bets" lost over $1 billion in operating income in Q2.
  • Public skepticism remains a hurdle despite technical advances.

2. Waymo’s Business Model Exploration

• Testing multiple business models across cities:
  • Proprietary ride-hailing app (San Francisco, LA): Own the vehicles, own customer app.
  • Partnerships (e.g., Lyft in Nashville, Uber in Phoenix): Leverage third-party demand and vehicle maintenance.
• Optionality as Core Strength:
  • Lou believes Waymo's strategic flexibility (“optionality”) is its biggest advantage:

    “They basically are in every boat. So whatever evolves, wins… Waymo, in theory, can win in any of these environments.” (Lou, 06:05)

  • Positioning allows them to adapt as industry norms and consumer preferences evolve.

3. Rivian’s EV Challenge

• Expansion and Financial Struggles:
  • Broke ground on a new $6B Georgia plant, but hasn’t produced vehicles profitably.
  • Production under 50,000 units/year, with plans to expand, but without fully utilizing existing Illinois capacity.
• Market Pressures:
  • Heavily loss-making; stock is down over 80% from IPO.
  • Revenue from regulatory credits is drying up due to tax law changes.
  • Competition from legacy automakers and high vehicle prices limit growth.
• Strategic Dilemmas:
  • New Georgia plant seen as a political and strategic move while government incentives exist, not purely a business case.

    “There's just no need for this… now is the time to grab that [government funding] while it's there. And I think that's what's going on here.” (Lou, 11:31)

• Outlook:
  • Both Lou and Rachel see the EV segment moving past its initial hype phase, now entering a slow, infrastructure-dependent adoption period.

4. The State of the EV Market

• End of the Euphoria:
  • Early-adopter excitement is gone; mass adoption awaits infrastructure and affordability improvements.
  • Lou:

    “The early adopter stage is over. The euphoria stage is over... We're waiting for this next inflection point where either the vehicles come down in price… or we see some sort of battery breakthrough…” (Lou, 13:26)

  • Rachel:

    “Expansion of the critical infrastructure that EV vehicle owners need... unless and until that changes, we'll see a slow adoption phase…” (Rachel, 14:19)

5. Tesla’s Shifting Focus

• Stalling Growth:
  • Despite a trillion-dollar valuation, Tesla’s vehicle production and delivery growth has slowed.
  • Robo taxi service in Austin still requires safety drivers; full autonomy remains elusive.
• Autonomy Strategy Debate:
  • Lou: Not ready to declare Tesla’s autonomy ambitions “busted,” though they're currently behind, especially technologically.

    “As for winning an autonomy, my question is define winning... I'm not sure if there's real value in getting there first.” (Lou, 16:35)

  • Rachel: Tesla’s camera-only approach is technically limiting and increases vulnerability to errors (e.g., glare, shadow misinterpretations):

    “Their reliance on cameras makes their autonomous systems, you know, vulnerable. To things like misinterpreting shadows or other really important [visual cues].” (Rachel, 18:10)

  • Operationally, Tesla is struggling with income and deliveries, while under competitive pressure from lower-cost Chinese EVs (e.g., BYD).

6. EV and Autonomy Stocks to Watch

• Lou’s Pick: Mobileye—supplier to much of the industry, benefits from incremental improvements and commoditization.

  “I like the supplier of that commodity and that's Mobileye to me.” (Lou, 20:06)

• Rachel’s Picks:
  • Amazon (Zoox)—exposure to autonomy through a larger, profitable company.
  • Nvidia—provides key hardware/software for AI-powered autonomous vehicles.

  “There’s another way to approach this too. I mean Nvidia, right, they provide the hardware and software, AI-powered chips for self-driving cars.” (Rachel, 20:24)

• Host’s Note:
  • Points out that tech leaders like Nvidia and Mobileye are increasingly partnering with traditional automakers, signaling possible new winners as the sector matures.

Notable Quotes & Memorable Moments

• On Waymo’s winning strategy:

  “Just shut up and slowly, bit by bit, do the work.”
  — Lou, (02:27)

• On Rivian’s uphill battle:

  “Their vehicles are very expensive. So that does kind of limit its target market compared to lower cost models.”
  — Rachel, (09:22)

• On the transition from hype to boring business:

  “Are we now at a, you know what, this is a manufacturing business. It's just going to be kind of steady and boring as it goes, as the auto business has been for a century.”
  — Travis, (12:56)

• On Tesla’s autonomy challenge:

  “Their systems are really only semi-autonomous. I think Tesla needs to focus on its core business, which... has struggled the last couple of years.”
  — Rachel, (19:31)

• On picking EV/autonomy investments:

  “I like the supplier of that commodity and that's Mobileye to me.” — Lou, (20:06)

Timestamps for Key Segments

• Waymo’s progress & strategy: 00:05 – 04:42
• Waymo’s business model/optionality: 04:42 – 07:17
• Rivian’s expansion & headwinds: 08:14 – 11:31
• Peak EV? Market transition: 12:56 – 14:46
• Tesla’s autonomy debate: 15:55 – 19:56
• Stock picks: 20:06 – 20:48

Summary

The episode delivers a nuanced look at the current EV and autonomy landscape. The guests praise Waymo’s methodical, sensor-rich approach and business model optionality but warn that profitability and mass adoption remain uncertain. Rivian’s expansion is cast as risky given its operational struggles and dwindling regulatory credit revenue. Tesla’s stalling growth and camera-only autonomy strategy are met with skepticism, though hosts aren’t ready to count it out entirely. Ultimately, the panel leans towards bets on industry enablers like Mobileye, Nvidia, and indirect exposure via Amazon for investors seeking EV/autonomy upside as the market transitions away from its euphoric early days.