Group 1 - Baidu plans to introduce robotaxis in London through partnerships with Lyft and Uber, marking a significant step in the UK's autonomous vehicle landscape [1][3] - Lyft will begin testing Baidu's fleet of dozens of vehicles in 2026, with plans to scale to hundreds, while Uber's pilot is expected to start in the first half of 2026 [2] - Baidu's global operations now include 22 cities and over 250,000 weekly trips, competing with other Chinese companies like WeRide and Western firms such as Waymo [3][5] Group 2 - The UK government aims to permit robotaxis for small-scale pilots starting in spring 2026, with Baidu likely to be among the first participants [4] - London has set a "Vision Zero" goal to eliminate serious injuries and deaths in its transportation systems by 2041, with autonomous driving technology expected to contribute significantly [4] - Waymo is also planning to test in London, with a full service launch anticipated in 2026, while Baidu is expanding its testing in international markets like the UAE and Switzerland [5]

December 21, 2025 11:35 PM GMT The Robot Almanac Vol. 6: Autonomous Vehicles Morgan Stanley Global Embodied AI Team December 2025 The content addressing private companies is being provided for informational purposes only and does not constitute a solicitation or imply future research coverage if the company goes public. Content is based on unaudited information. No investment recommendation is provided as there is limited public information available for private companies. Investors should conduct their own ...

Core Viewpoint - Rivian Automotive has faced significant challenges since its IPO in late 2021, with its stock losing over 80% of its value, but there are signs of potential recovery depending on operational improvements and future product launches [1][2]. Financial Performance - Rivian reported a revenue growth of over 78% year over year in its latest quarterly earnings for Q3 2025, indicating improving financials [6]. - The company achieved a profit of $154 million in its software and services segment, although it incurred a $130 million loss in its automotive business [6]. Market Position and Competitive Advantage - Rivian is well-regarded among customers, ranking highly in performance, design, and reputation, which contributes to a loyal customer base [4]. - The company controls most of its technology stack, providing a competitive edge over other EV manufacturers outside of Tesla [4]. Future Prospects - The successful launch of the R2 fleet in 2026 and ongoing operational streamlining are critical for Rivian's future [2]. - New partnerships, such as with Volkswagen, along with advancements in AI and autonomous driving, suggest a promising outlook for Rivian and its investors [7].

Core Points - A significant power outage affected approximately 130,000 residents in San Francisco, leading to the suspension of Waymo's ride-hailing services in the area [2][4][5] - The outage was caused by a fire at a substation, resulting in extensive damage and leaving around 21,000 customers without power as of Sunday morning [4][5] - Tesla's CEO noted that Tesla's Robotaxis were unaffected by the power outage, although Tesla does not currently operate a driverless service in San Francisco [6][8] Company Impact - Waymo has temporarily halted its driverless ride-hail service due to the blackout, with no specified timeline for resuming operations [2][8] - Videos on social media showed multiple Waymo vehicles stalled in traffic during the outage, indicating operational challenges [3][8] - Tesla is positioning itself to compete in the robotaxi market but currently requires human drivers for its ride-hailing service, as it lacks permits for driverless operations in California [7][8] Industry Context - The incident highlights the vulnerabilities of autonomous vehicle services during infrastructure failures, with Waymo being a leading player in the West and Tesla as a key competitor [8] - Regulatory challenges remain for Tesla, as it has not obtained necessary permits for fully driverless services in California [7][8]

Group 1: General Motors - General Motors Co. is considering Sterling Anderson, its current Chief Product Officer and former Tesla Autopilot executive, as a potential successor to CEO Mary Barra [2] - Anderson's focus would be on enhancing hardware and software integration for GM's vehicles [2] Group 2: Tesla - Tesla's Full Self-Driving (FSD) system received positive feedback from South Korean lawmaker Lee So-young, who praised it as a game-changer [3] - The FSD system recently launched in South Korea, and there are plans for a European rollout [3] Group 3: Waymo - Alphabet Inc.'s autonomous driving unit, Waymo, is in discussions for a funding round that could exceed $10 billion, potentially valuing the company at $100 billion or more [5] Group 4: Ford - Ford Motor Company is reportedly shifting its focus away from electric vehicles (EVs) due to lower-than-expected demand [6] - RBC Capital Markets analyst Tom Narayan maintained a Sector Perform rating on Ford, commending the company's strategic restructuring [6] Group 5: Air Taxi Strategy - The Trump administration's strategy to initiate air taxi operations in the U.S. was unveiled by Transportation Secretary Sean Duffy, emphasizing the emergence of eVTOL aircraft and drones [4] - The strategy aims to position the U.S. as a leader in aviation and to compete with China [4]

Core Viewpoint - Tesla is facing a pivotal year in 2026, with expectations of declining sales and profits despite a record high market cap of over $1.6 trillion [2][3]. Sales and Market Position - Tesla is likely to experience its second consecutive year of declining sales, with US and European sales at their lowest in three years [2][3]. - Competitors like BYD and Hyundai are gaining market share globally, which poses a challenge for Tesla [4][7]. - The company needs new models, price cuts, and advancements in full self-driving technology to return to past growth levels [4][5]. Autonomous Driving and Regulatory Challenges - Tesla is significantly behind competitors like Whimo in the autonomous driving space, with Whimo projected to provide 30 to 40 million rides in 2026 compared to Tesla's operations in only two cities [6][7]. - Regulatory approvals are crucial for Tesla to advance its autonomous driving capabilities and expand into new markets [5][6]. Energy Division Outlook - Tesla's energy division is the fastest-growing part of the company and could potentially offset weaknesses in the automotive sector [8][10]. - The energy division is expected to grow from approximately $10 billion in 2024 to about $14 billion in 2025, reflecting a 40% year-over-year growth [10]. - If Tesla maintains this growth, it could shift market perceptions, valuing the company more as a diversified energy and mobility firm [11][12]. Future Growth Metrics - Key metrics to watch for in 2026 include sales numbers for Q4 and annual performance, which are anticipated to be flat for the second year in a row [14]. - To improve growth, Tesla must focus on producing lower-cost vehicles and expanding into emerging markets, particularly in China [15].

Core Viewpoint - Tesla's stock has surged nearly 50% over the past six months, driven by optimism surrounding autonomous driving, AI, and long-term growth prospects, despite sluggishness in the underlying business [1] Group 1: ARK Invest's Actions - Cathie Wood's ARK Invest trimmed its Tesla position by selling approximately $11.2 million worth of shares on December 18 [2][7] - The decision to sell is seen as a disciplined approach to portfolio management rather than a sign of loss of conviction in Tesla [4][8] - ARK's recent trades indicate a pattern of position sizing and profit-taking following a significant rally, with Tesla remaining ARK's largest holding [8] Group 2: Market Sentiment and Valuation - Wall Street's view on Tesla is divided, with optimism about AI countered by concerns over margins and execution, as well as how much good news is already priced in [6][12] - Analysts suggest that Tesla's upside potential may already be reflected in its current valuation, leading to increased valuation sensitivity among investors [12]

Core Viewpoint - Tesla is a leading player in the electric vehicle and energy sectors, with significant market share and innovative projects that position it for future growth [6][20]. Company Overview - Tesla operates in two main segments: automotive and energy generation/storage [2][3]. - The automotive segment includes popular models like Model 3, Model Y, Model S, and the upcoming Cybertruck, as well as commercial vehicles like the Tesla semi-truck [2][3]. - The energy segment offers products such as Powerwall and Megapack, along with solar energy systems for various applications [3]. Competitive Landscape - Tesla faces competition from established automakers like General Motors and Ford, as well as emerging players like BYD, Rivian, and Lucid [4][5]. - In the technology space, competitors include Alphabet's Waymo, which focuses on autonomous vehicle technology [5]. Recent Developments - Tesla began testing its Model Y robo taxis in Austin without any occupants, indicating progress in its autonomous driving technology [7]. - In Q3 2025, Tesla reported earnings that missed EPS estimates by 6 cents but showed revenue growth of 11.6% year-over-year, beating estimates by approximately $1.4 billion [8][9]. - Free cash flow for the quarter increased to nearly $4 billion, a significant rise from $150 million in the previous quarter [9]. Growth Drivers - The robo taxi initiative is seen as a major growth driver, with potential revenue from urban transportation [11]. - The CyberCab and Optimus segments are projected to generate substantial revenue, with CyberCab potentially reaching $54 billion by 2030 [12]. - The energy storage segment is experiencing rapid growth, driven by demand for energy solutions [13]. - Tesla's AI chip roadmap could add an additional $11 billion in annual profits by 2028 [13]. - The company is expected to generate over $100 billion in annual sales in fiscal year 2026 [14]. Challenges and Concerns - Tesla's full self-driving technology faces regulatory and technical challenges, impacting its readiness for mass market deployment [14]. - Ambitious projects like the robo taxi and humanoid robotics may strain financial resources due to their capital-intensive nature [15]. - Tesla's valuation is high, with a forward earnings multiple of over 283 times, significantly above the sector median of 18 [15]. - Sales growth is projected to slow to around 4% year-over-year, below the 5-year average of nearly 30% [16]. Market Performance - Tesla's stock hit a new all-time high of approximately $495 but has underperformed the broader market over the past 52 weeks, with only a 2% increase [18]. - Year-to-date, the stock is up nearly 21%, with strong near-term price momentum [18][19]. - The stock price remains above key moving averages, indicating a positive intermediate trend [19]. Conclusion - Tesla is positioned as a leader in electric vehicles and energy solutions, with ongoing innovations in AI and robotics [20]. - The recent developments in autonomous driving and energy storage enhance its competitive edge and growth potential [21].

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Electric Vehicles (EV) in China - **Current Trends**: EV demand shows resilience, with expectations of continued support for consumption into 2026, driven by government policies and market dynamics [2][9] Core Insights - **EV Market Performance**: - In November, the China passenger car market recorded sales of 2.22 million units, an 8% year-over-year decline, and a 1% month-over-month decrease [2] - EV sales increased by 4% year-over-year and 3% month-over-month, achieving a penetration rate of 59.3% [2][34] - Anticipated growth in EV demand through December due to year-end promotions and potential frontloading sales ahead of tax exemption reductions [2] - **Robotaxi Commercialization**: - Companies like Pony and WeRide plan to expand their robotaxi fleets from approximately 1,000 to 3,000 by the end of next year, with some areas achieving breakeven unit economics [3] - XPEV is set to launch three robotaxi models in 2026, indicating a clear acceleration in commercialization [3] - **Battery Market Dynamics**: - The battery trading market is currently experiencing volatility, particularly affecting smaller firms and upstream battery materials [4] - The battery segment is expected to benefit from an upcycle, with companies like CATL showing growth visibility [5] Investment Recommendations - **Preferred OEMs**: - Companies with strong product pipelines such as BYD A/H, Geely, and Leapmotor are favored due to expected policy support for domestic consumption [5][9] - **Battery Suppliers**: - CATL is highlighted for its resilience and growth potential, especially in the face of demand volatility expected in early 2026 [5] - **Autonomous Driving Enablers**: - XPeng and Horizon Robotics are well-positioned to capture growth in autonomous driving, with Joyson noted for its overseas exposure and robotics optionality [5] Additional Insights - **Market Share Trends**: - The top 10 brands in the China passenger car market captured 72% of the market share in the first ten months of 2025, indicating a competitive landscape with 144 brands vying for the remaining share [13][15] - **EV Market Share**: - The top 10 EV makers accounted for 75% of the market share in November 2025, with 50 brands competing for the remaining 25% [18] - **Discount Levels**: - The discount level for EVs slightly increased to 10.1% in November 2025, while ICE vehicles remained stable at 24.0% [26][28] - **Inventory Levels**: - The inventory indicator rose to 1.57 in November 2025, suggesting potential oversupply concerns [38] - **Future Projections**: - New model launches are expected to peak in the third quarter of 2025 and the second quarter of 2026, with EVs projected to account for 91% of new models [42] This summary encapsulates the key points from the conference call, focusing on the electric vehicle industry in China, market dynamics, investment recommendations, and additional insights that may be relevant for stakeholders.

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