Investors of a certain age may remember Knight Rider. It was a cult TV show in the 1980s that lasted 90 episodes.
It featured a secret agent called Michael Knight. Knight had been disfigured in an assassination attempt. He assumed a new identity after a face transplant.
Knight became a crime fighter with a robotic car named Kitt. The car could talk and take instructions, drive itself and reach supersonic speeds. Leaping over walls was a routine event.
The car was sleek and black. It meant that Knight was like a lone ranger riding a dark horse. Knight was played by David Hasselhoff, who later pounded the beaches in another 1980s iconic show — Baywatch. Hasselhoff suited the part of a lone warrior against crime. He was tall and broad with a mop of unruffled curly hair.
Kitt was the star of the show, not Michael Knight. Kitt was so famous that people bought video cassette recorders to record the show. Foreign programming was rare in Asia. The show was the most popular video in bootleg video stores in India. In Thailand and Brazil, sub-titled versions of Knight Rider topped the charts.
Kitt’s features seemed far-fetched at the time. PCs were a novelty. Macs were launched in 1984. They were more expensive than the average car. The initial models cost US$2,495 each or US$7,400 ($9,745.24) today. The computing power that could create a self-driving car was science fiction.
See also: ComfortDelGro wins three bus franchises worth $1.4 bil in Victoria, Australia
In the 1980s, I used to dream of living long enough to drive a car like Kitt. It has become a reality quicker than expected. But Hasselhoff has aged badly. His bare-chested fashion sense seems dated and his leather jackets seem weird today.
However, the show was on the money in predicting technology. Kitt drove on autopilot, a forerunner of today’s autonomous driving. Some Tesla models operate on this basis. Conventional auto companies like GM have vehicles that auto park and have lane detection.
In the first episode, Kitt detects Knight’s anxiety and suggests that the driver calm down. Knight is shocked that a machine can talk back to him.
See also: How ComfortDelGro continues to drive innovation and return value
This technology, beyond reach in 1982, is now upon us. Artificial intelligence can use facial recognition to read moods. It can even read a driver’s health. For example, if the driver is about to have a heart attack, the car could move into autopilot mode.
In a strange twist, a country that was poor and isolated in the 1980s is about to bring Kitt to America. WeRide, a Chinese autonomous vehicle (AV) company, is about to list on Nasdaq.
The company is looking to raise US$119 million ($156.71 million) at a valuation of US$5 billion. Its venture capital backers are Nissan and Qiming Venture Partners.
WeRide has approval to operate robo-taxis in China, Singapore and the UAE. It is trying to get approval in California. Apart from robo-taxis, it is working on robo-buses and robo-vans for delivery.
Knight Rider’s tagline described Knight as a man who does not exist. Similarly, AVs may have been rolled out, but profits are absent. There are about 15 listed AV companies, which are all bleeding.
WeRide, for example, could generate US$42 million in revenue in FY2024, if we annualise its 1H2024 figures. It is racing towards an annualised net loss of US$242 million in FY2024.
The IPO proceeds would be used to create a subscription-based model for AVs. Customers pay for access to a fleet of AVs rather than owning a car.
Sink your teeth into in-depth insights from our contributors, and dive into financial and economic trends
AV companies could provide ordinary consumers access to a fleet of cars in one fell swoop, eliminating the hassle of driving. Ford suffered many years of losses in the 1920s before cars took off.
San Francisco has approved two robo-taxi companies. This city had mobile phones, computers and the internet before the rest of the world. It is now charting a new course for robo-taxis.
Waymo, the larger of the two, is a subsidiary of Alphabet. It operates using a similar pricing to ride-hailing companies like Uber. You don’t even have to tip a driver.
AVs have patient and deep-pocketed backers. The industry could lose over US$7 billion in the next four years. Operating profits could appear once usage takes off. Like Kitt, it would take a brave man to bet against them.
Nirgunan Tiruchelvam is head of consumer and internet at Aletheia Capital and author of Investing in the Covid Era
