#299: What Autonomous Driving Stocks You Should Buy (and Tesla Isn’t One) (w/ Derek Reilly)

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0:49So go build your dream team today with Indeed. Get a$75 sponsored job credit at Indeed.com slash podcast. Terms and conditions apply. Everyone is talking about Waymo and autonomous and it's completely overtaking the figure, especially around aggregator platforms like Uber in particular is selling off in the form of Waymo fears. This isn't really going to be a reality anytime soon. These are very contained areas. It's not wide scale adoption anytime soon or will be for a long time. Is that fair to say?

1:22Derek Reilly:No, but I think the rate of adoption, like everything within the technology space is going to be hockey stick and it is once it does reach that critical tipping point it is going to be in a lot of lot more places hello everyone and welcome back to stock club the podcast where we find and discuss stocks that anyone can buy many of which we believe will go on to grow your wealth We're approaching our 300th episode next week. This is episode 299 and to celebrate we have something very special. February's Horizon Stock Pitch which is coming at the end of this month, 26th of February, is a departure from my usual method because to find it I started with an almost unheard of academic paper that analysed almost 500 stocks that went on to grow tenfold.

2:19And that paper asked and answered the question, what actually mattered beforehand, before that growth? So I ran the research paper through three custom-built AI systems in parallel to screen for companies exhibiting the same pre-multi-bagger characteristics today. And, as I said last week, the results knocked my socks off because only one name was common to all three. It's an almost unheard of business that I've been considering pitching for a long time. So I'm doing it at the end of this month and will also link to that paper I mentioned. So we have an unreal offer that you just cannot miss. Secure 50 % off, that's$1 ,500 off, and you get Nexus 1, 2, and 3 included with a value of multiple thousands of dollars.

3:12These premium services contain some of the greatest international investments that we'll see in the next 10 years, and a handful of which I just had to buy in Horizon. This is a quarterly enrolment that we've started, so there's a short window. You can secure Nexus 1, 2 and 3, including this massive discount, just email frank at mywallstreet.com. That's frank at M-I-W-A-L-L-S-T dot com to secure just one of the 30 spots that we've reserved. Okay, on with the show. Hi folks, and welcome to another episode of Stock Club. Today I'm joined by an old favourite here at the podcast, our resident EV expert Derek Riley.

3:54Derek Riley is from Nevo, Ireland's only dedicated electric vehicle platform. He's here on the pod today to talk all things autonomous driving. Derek, welcome back. I think this is your hat trick show.

4:02Derek Reilly:Hat trick show not consecutive years now I did miss 2025 so I'm gonna have to be a bit more diligent with reaching out and uh making sure I'm top of my game for it to be a podcast guest but thanks so much for having me back on it's great to be on the show of course of course it's great to have you I think this is a record so we might get you a plaque or something we'll send it out post don't be waiting up all night but no we actually we brought it up on the show I think I think one of Emmet's themes for 2026 was autonomous driving. And I thought, I actually said it on the podcast, I thought it'd be great to get you on.

4:35And when I emailed you, you had actually just, were you in CES in Las Vegas at the time or you had just come back?

4:41Derek Reilly:I think I was in CES. I think I was in an autonomous vehicle driving along the strip. So fate was definitely playing its card. Yeah, autonomous driving is the buzzword at the moment. And every now and again, I'll get a WhatsApp off Emmet to say, have you seen this or have you heard of that? I'll pop them back a link to a video that I've just done about it. So it is top of mind for 26 for sure. Brilliant. So I'm going to, we talked a good bit about autonomous over the last year, I think, on this podcast. So most of our listeners should be at least a little warmed up. But I'm going to give you an awful question to start, which is just a big general kind of state of the union.

5:18Like, if you can give it in like, you know, one minute or less the state of the autonomous driving industry today. Who are the major players? the kind of major milestones it needs to achieve and then the roadblocks I suppose at least in the short term.

5:32Derek Reilly:So autonomous driving, self-driving cars for people out there that don't understand what autonomous driving is, you have three ways of looking at it. The major players would be the likes of Waymo which is the gold standard for level four. There's a number of different levels of autonomous driving. Then you have the likes of Tesla with their level two slash level three camera based only and then you had Zoox which I was in in Las Vegas at CES which is a purpose-built autonomous vehicle. Milestones wise it's not it's gone from can it drive to can it reason and give you an understanding as to why it made that decision which is a big thing for autonomous driving.

6:11We know that they can drive we know that they can go from A to B but understanding why they took that turn or why they slowed down that's starting to come out and we're starting to see a bit of that with nvidia's new as a proud mayo man i don't appreciate how they've said this but it's alpamayo but i like to say um but uh you have that you've got qualcomm etc um so you can see why it made that decision and the reason behind it and then the last thing on that roadblocks why aren't there autonomous cars all over dublin and galway and mayo and berlin uh it's down to legislation and country has just been very wary and you can see the difference between the US and the European side of things US it's kind of a show us how it works and and we'll give you a green light after you've done your testing whereas Europe is very much do the test first and show us before we let you on European roads so there there's that difference in that and then we've got China obviously as well doing huge miles autonomously over there and just getting on with it yeah and And I think China has always been, especially in the auto industry, you'll know much more than me.

7:16They've always been doing their own thing. Is it Baidu? Yes, exactly.

7:21Derek Reilly:AIGo is the name of the product, and we'll be chatting about that later on. Yeah. So I want to talk Waymo first, I think, because Waymo is the company making the waves, especially in 2025. It's really ramped up in terms of its expansion, especially in certain cities. Well, only in certain cities, obviously. It's the clear market leader. Is that fair to say? Yeah, absolutely. They've walked the walk, not just talked the talk. They have hundreds of Jaguar I-Paces on the road for years now, clocking up hundreds of thousands of millions of miles and kilometers. And even at CES, they have their own stand.

7:55We can see now the Ioniq 5 from Hyundai is going to be utilized, and they're looking at purpose-built vehicles as well with the Geely Group. I think it's a Z-Cur that has a purpose-built kind of like a mini taxi on wheels, but a lot more autonomous looking inverted commas rather than a Jaguar I-PACE with a lot of sensors stuck onto it. Yeah, yeah. And I believe that this is where a lot of the argument comes down to. And we'll get into this is, you know, a big expensive Jaguar is probably not the most sustainable expansion plan. But what does the expansion plan for Waymo look like at the minute?

8:33It's very U.S. focused, of course. And do you see it going beyond the U.S. anytime soon? You mentioned regulations, especially in Europe.

8:40Derek Reilly:Very much brought on about it. What they're doing with Waymo is they map a city and then they let the cars off on it. It's not like the car is finding the city out for itself with its LiDAR, which is unlike some of the other things. I'm sorry to interrupt, but that's worth mentioning as well, the difference. So you mentioned earlier the levels of autonomous. So level four is kind of completely autonomous, but within a described, defined region. And level five is just, you know. Off the go. off ago yeah and so level four and it's probably level four is good but then things happen within that mapped environment road works an accident something that hasn't been mapped before so there's still an element of it having to understand it but there's a lot more control on it so with the u.s side of things they're only in a couple of cities with more u.s cities planned they are rolling out at u.s such a huge market they've enough to chew there and i haven't heard them talking about going outside of that but they're doing a good job you know you have a couple of edge cases where there have been accidents unfortunately but if you take a group of Waymo's and the miles that they're doing versus a group of regular meat and bones drivers regular humans and the amount of miles that we do and the amount of accidents that we have Waymo is statistically more safer it's just that it gets the attention when something does unfortunately happen when it does happen.

10:07Of course and that's always going to be the big issue. I think it's emotional versus logical in the sense of we know that autonomous driving would be more safe but the thought of that being the cause of death is really tough to overcome just from the human psyche point of view.

10:26Derek Reilly:Absolutely and what we're finding is the same with the world of electric vehicles when there's a car fire which happens all day every day they don't get reported on but when an EV goes on fire, it's breaking news. Or when a car fire, the first thought is, is it an EV? And so the media are very quick to jump on that. If it bleeds, it leads. And unfortunately, it's the same with autonomous driving. Another thing to consider, Mike, with regards to international expansion with Waymo and others, the US have a standardized road sign system and road layout network system. Whereas if you come into the European market, yes, the European market is a nice group of countries with a nice population and spend base, but 27 different countries, 27 different road signs, 27 different ways of operating traffic.

11:09I watched a real nerdy YouTube video there recently as to the development of road signs internationally over the years and how the UN have tried to bring everybody together. And interesting fact, Ireland has a set of road signs that is unique to everywhere else in Europe because we were getting our roads up and running in the 60s and 70s. And we actually took on the European or the UN standard and we're the only country in Europe that has this European standard for road signs and so if a robot autonomous vehicle is learn it learns Irish roads it'll be different to French roads it'll be different to UK road signs and so there's that whole other hurdle to get over when you're looking at international expansion for autonomous vehicles yeah and so I think it's worth mentioning then that like especially in the markets we very much, if something seems inevitable, it feels like it's happening right now.

12:03It's worth talking about that because everyone is talking about Waymo and Autonomous and it's completely overtaking the picture, especially around aggregator platforms like Uber in particular is selling off in the form of Waymo fears. This isn't really going to be a reality anytime soon for the vast majority of people. There's a novelty to, if you're living in San Francisco and certain other cities, Vegas, Austin, is that correct? Yep. Phoenix. Somewhere else. Phoenix, that's not. These are very contained areas. It's not wide-scale adoption anytime soon, or will be for a long time. Is that fair to say?

12:41Derek Reilly:No, but I think the rate of adoption, like everything within the technology space, is going to be hockey stick, and once it does reach that critical tipping point, it is going to be in a lot more places, not everywhere. And you can see where the likes of London or New York or Tokyo, highly densely compacted urban environments that are easily, I'd say easily mapped. I'm sure the people out there mapping both can say that it is easily done. But yes, you could map 10 square miles of New York City and you're covering millions of people, whereas the same amount of mapping requirements to get millions of drivers or users in Ireland just wouldn't be worth financially would be feasible and so yeah it's very much specific use cases and it is a novelty it's getting a lot of air time but what we will see is that technology been utilized in standard vehicles within certain autonomous levels of driving so when you get your new bmw ix3 which i was driving a couple weeks ago and i'm driving along that spanish motorway you can now take your hands off the wheel and it is a level two plus plus driving where when it asks you do want to change the lane you just look at the side mirror and the bmw knows that you've given it the all clear and it takes the change of lane and your hands still aren't on the wheel and so it's like formula one that technology trickles down into your Ford Fiesta as an example Well, that's a good example.

14:11So I'm going to jump ahead to NVIDIA. And so this came out from CES. It's actually in the first email I sent you. What you mentioned, Alpa Mayo. So it's described as an open source AV stack, basically a kind of plug and play platform for autonomous driving that can be used essentially by any major OEM that wants it, according to Jensen Wang anyway. Is that a fair summary?

14:39Derek Reilly:Yeah, manufacturers, it's a bit like when they all tried to invent their own AI assistant, and then people were like, why are you trying to reinvent the wheel here when the major Googles and series, et cetera, are doing such a good job, and manufacturers went, okay, fair enough. It's a bit like satellite navigation when people just use their phone mirroring and use their Android or their Apple phone, and it's going to be the same way for autonomous driving. Why would manufacturers who are already struggling and trying to fight off competition from new markets and new entrants try and invest billions into autonomous driving when they can go to the likes of NVIDIA with Alpamayo or the likes of Qualcomm or whoever else to say, you know what, can we partner with you on that?

15:19And it works both ways to say that a vehicle is empowered by NVIDIA or to say that a vehicle is powered by Qualcomm. It's a brand that people that understand technology would go, oh, that's a good brand. I understand it. Kind of like that smartphone saying that there's a certain chip inside of it you can see the case and down the line and not that far down the line where a car manufacturer will say we're working with x y or z just to improve or to enhance our autonomous driving levels and so that nvidia alpamayo is very much that and what i like about it and there's a good video up on their youtube channel with regards to um what it is how it works and the data set behind it.

16:00Very impressive. Yeah, and I guess that's, when I'm talking about any OEM can install this, that's probably advancing autonomous as a whole. 5, 10, 15 years. For a small automaker, their priority was never going to be that. But now with the plug-and-play system, it turns around and is, as a whole-scale adoption, and I'm not saying about level 4, level 5 autonomous, But what you were saying about level two on the motorways and all the rest and taking your hands off the wheel, that's going to be a much closer reality. Is that fair to say?

16:34Derek Reilly:Yeah. And some people, buying a car is a very emotional thing. People like the way it looks. It's not about some people. Well, majority of people like the way it looks. So it has to look. And where I'm going with this, Mike, is some of the autonomous vehicles have lumps and bumps that people don't like on a vehicle. and so people would forego the ability of autonomous driving because they don't want it to look like a London taxi with a bump over the windscreen or have these LiDAR units on it. There was another car launch at CES called Tensor and it's the first level four robo car. I did a video up on my YouTube channel.

17:10Now it's been beaten heavily with the ugly stick but it will drive you from A to B. It's launching the end of this year and so yes an OEM can buy in the knowledge from NVIDIA or Qualcomm or whoever it may be. But it also has to have that hardware element as well. But some manufacturers like Tesla are not going with LiDAR and other sensors, and they're only going with cameras to try and preserve the aesthetics of the vehicle. So there's that dilemma happening within the OEM car manufacturing world as well. Yeah, well, I want to bring up that point, actually, because I don't think we can have this conversation without talking about Tesla.

17:52You're saying for the aesthetics and for kind of keeping the car looking like a normal car, but their full self-driving is also very much based on unit economics. So they have foregone lighter and they're pretty much the only car company pursuing autonomous driving to do this. And so it's obviously a big risk, but we've always said that if the risk comes off, their ability to scale and their ability to do this at a much cheaper price should surely kind of catapult them into one of the market leaders in the face. Is that a fair statement?

18:25Derek Reilly:It's a fair statement, but do I agree with that statement? I probably don't. There's too many examples online where Tesla drivers are being utilized as beta testers out in the real world, specifically in the North American market where you can sign up to be a beta tester for Tesla as autonomous driving. and you watch these Tesla drivers like to stick cameras up inside their car and record everything on YouTube. And so you can see where the LiDAR system fails. And other manufacturers said, we can't rely on one system. We have to have a redundancy and a backup and a marriage. And this is why the likes of Volvo, when they were bringing out their EX90, their large SUV, there was a delay in it because they found the difficulty of merging and marrying those three data sets of cameras radar and lidar whereas obviously tesla said we only want to go with lidar and that's fine but when the lidar fails sorry when the camera fails it is there's a problem and so whether it's rain whether it's um cannot see uh in vertical cameras uh what it's supposed to be looking at and scanning for then you're in trouble whereas if that lidar then can can go back up and say camera can't see but the lighter can pick up that there's a pedestrian or a truck on its side or snow is covered whatever it may be that's where you've got that double redundancy but a lot of manufacturers have said we want camera lighter and radar to make sure that we have that because you can see where this technology and we kind of talked about it already like where if it fails you can see stock prices share prices going down very quickly if one or two of these things happen overnight we could solve a boeing when that technology failed recently and the share price where it went to so there needs to be confidence in that product as well too and with the with the uh for people to buy it and for people to buy the shares and but between behind like tesla's full self-driving it seems to be so self-defining of the fact that it is only going cameras it's foregoing LiDAR like if they don't pull it off and you don't sound too confident that they will that's kind of catastrophic no um it is catastrophic if they keep pushing the autonomous driving element of their vehicles if the robo taxis etc etc but people are still buying model threes model y's s's and x's in certain markets that are still for sale on um and so it's a very good electric vehicle not to talk about the man at the top of the pyramid but it is people are still the technology within it is amazing people in ireland aren't buying tesla model threes and model y's or anywhere predominantly for their self yeah for their self-driving capability because it's a bit of a thing where why would you pay for something that isn't currently in my car and i believe the pivot now is it's going to be a subscription model so that you know when you're going on that long journey from Paris to Rome in the summer in July, you can buy or rent, sorry, subscribe to self-driving for that month, which I think makes a lot more sense.

21:30And it's motorway based. But if I'm driving around Galway City in rush hour, I can guarantee a camera based autonomous driving is going to be busy in a January wet evening or morning. Okay, so that's very interesting because you're talking about people are still buying the Tesla cars for their quality and everything else, but investors are buying the Tesla shares based on a lot of these promises, based on Elon Musk's promises for FSD, based on the autonomous robots as well. But very much the robo-taxi network and all the promises are underpinning the stock, which is at all-time highs, basically.

22:10it seems a bit of um i don't want to say house of cards because that sounds like a big word to say to throw around but like the fact that we have an expert here that's maybe questioning the questioning the decision yeah and i'm not trying to

22:28Derek Reilly:scare the horses out higher i'm just being practical go and look go and take a drive in a zoox go and take a drive in a waymo go and take a drive and they've only just started robot taxi services in certain markets. And there's big plans to roll them out, but there was big plans to bring out a Tesla Roadster. There's big plans to roll out big numbers, supposedly going to be for Tesla Cybertrucks. These haven't materialized. And yes, the share price is at a huge time and it's built on a lot of promises and predictions as to where the company is going and where the focus is. But if we're talking about autonomous driving as of start of January 2026.

23:11Derek Reilly:They're not leading the pack. They're not leading the way. They haven't proven themselves yet to me. And I think if you are in that space, hopefully you'd agree with me with that as well. I've yet to experience full self-driving from Tesla. I'm in the process of lining that up so I can. But Robotaxi, from what I could see when it launched a couple of months ago, that service in the Tesla Model Y, it was still using a driver in the front seat at that time. i'm not sure if that's changed but two weeks ago i was in the strip in las vegas in azuc's on my own up and down the strip no problem yeah yeah very interesting okay i'm glad emmett's not on the calling but um but no i want to talk about zooms the zips is the last individual company i want to talk about because it's probably the least talked about um owned by amazon uh maybe because it looks like a bit of a fridge on wheels that it's not as popular to talk about but it seems very much in the mix here as well so and you've been in them over in Vegas and I'm very interested to hear kind of what what their story is because I don't know much about them either I've obviously been well read up on Waymo and Tesla but Zooks is kind of over there in the dark a bit for me yeah and it's been there for years when I was standing in line to get into the static that they had at CES I was listening to one of their marketing people talk to a French journalist and she was saying, if I remember correctly, she said 2016.

24:37Derek Reilly:So that's 10 years that they've been developing this technology and just getting on with it. And again, that's what I like about some companies. Some of them talk the talk, some of them walk the walk. And with Zoox, it is, as you said, fridge and wheels is probably a bit harsh. It is a box on wheels. It's actually, do you know what it looks like a bit? You know, these saunas that are popping up everywhere. It looks as small as it like a mini sauna. Don't give them the idea because potentially that will be coming down the line. I know Ford have an e-transit currently on the press fleet in Ireland.

25:12That's a mobile sauna. So, yeah. But anyway, yeah, so it's like a small little pod. Dedicated EV, ground up. And so wheels out to the corners, maximizes the space, has LiDAR and sensors all around it, good-sized battery. And what they were doing at CES,

25:30Derek Reilly:when I landed and got a taxi to the hotel at CES on the Saturday, I was driving along the road and I was losing my mind seeing these things zooming past the taxi driver, the Uber driver. And I said, like, did you see that? And he was like, oh, yeah, like they've been here since October. It's just the norm. And it's so weird that I'm losing my mind. And they're like, oh, yeah. And so people have just become used to it now. I did see a situation where a Zoox was stopped correctly outside a hotel for somebody to pick up and there was a taxi driver behind them. and they were losing their mind because they couldn't get around it and you can imagine a taxi driver is not impressed with an autonomous robot vehicle that's going to take their job very soon and so has been running in vegas for uh since october so if you're going to las vegas anybody in the coming weeks or months you can go and take a drive a ride in it if you've got a non-europe u.s fail phone you have to have a u.s account to download the app if you don't have one you can go to the sans resorts world and they have a kind of an experience system there where you can sign up when the Zoox becomes free you jump into it and they do you kind of a 30 minute loop up and down and I was in with um Volkswagen Moya which is their self-driving division in in Hamburg a couple of months ago and that they used the ID Buzz electric vehicles but with a lot of sensors on it but there was still a safety driver in the front seat and what I think is disconcerting with the likes of the ID Buzz or Waymo it's a car with a wheel that is moving on its own and you feel it looks normal and non-futuristic kind of like correct but then it starts driving on its own whereas zooks you're sitting in it it's two people facing two it's a carriage format not a fridge and wheels this is the marketing terms but um and then it off it goes and you kind of forget that you're driving at 60 miles an hour in las vegas would it go that fast like it is whipping along i have a video coming along but you kind of the seats are facing you and you haven't the tinted windows and it's not that you can't see out you can see out and see what's happening but you kind of don't feel like oh my god if things go wrong here things go very wrong and i'm sure it's crash tested and all the rest of it and so that it's probably safer than a normal vehicle because it's a pod that hasn't got any weak points around it etc etc but very smooth very stable drive braking taking off taking turns overtaking a parked vehicle you can imagine in in hotels when people are getting dropped off and picked up like there's a lot of stuff going on I felt very comfortable very confident in it and it was a bit like the taxi driver when he when I was driving along the strip and he saw them and went yeah yeah that's a zooks it's been there for a couple months you could very quickly get used of hopping in a zooks and getting to your destination and what they say in zooks world is that uh that found time uh where you used to have to drive or used to have to pay attention to the car that you were driving in if it was semi-autonomous whereas now you can catch up on sleep you can catch up on work you can catch up with friends like commuters this is a dream for commuters and now were the if you were in vegas now where they have it's probably one of the leading cities for uh autonomous driving how would you access so you mentioned zoops was a bit difficult just because you didn't have the u.s account say but like as in could you just go on would you have to download a zoops app or a waymo app or could you go on uber were they available at the moment it's a specific dedicated autonomous driving so waymos the zoops the app is there and you select where you are and where you want to go and it just pulls up you scan a qr code or it asks you for a pin code on the on the b pillar uh doors open off you go out you jump it's it's and was there a major price difference i was using a kind of a pr kind of a loop i didn't have to pay for that journey um but i'm what i'm hearing is that price is comparable with ubers and uh and waymos and other ride-hailing services okay very good it's funny and like this doesn't really have much to do with autonomous driving in general, but this AI wave, and I've read about this, I thought it was a very astute point.

29:42It doesn't really have as many disruptors as other past waves. You know, it seems to be the incumbents. We're talking about Zoox, which is owned by Amazon. We're talking about Waymo, which is owned by Google. And we've talked about NVIDIA, which is the largest company in the market. Do you know what I mean? It's not like there is new up-and-comers here. It is the incumbents who are branching out into the next generation of technology instead, which doesn't really mean anything. It doesn't have much to do with this conversation, but I think it's an interesting point that we're talking about the biggest company in the world when we talk about a new technology.

30:14But on that technology, and I think this feeds into that point as well, is that with especially the NVIDIA's Appa Mayo, is there a future in which this technology becomes somewhat commoditized and more or less there's a big pool of competitors? or is there a future where Waymo and Zoox are the two leaders and no one really can catch them on a unique economic basis they're way out in front?

30:44Derek Reilly:And it's not even a unique economic basis, Mike. It's the data that they've gathered and that's where the likes of the Waymo or the likes of Zoox is coming up. And I called it AI Go with Baidu. It is called Apollo Go in China. and it's all about the data set that you're pulling together so that it can learn from it, very much like an LLM. And you can see that where ChatGVT kind of has been overtaken now by Google just because it's the behemoth of data that it is. It's going to be the exact same space in self-driving. Hardware will be the hardware, the LiDAR units, the camera units, the radar units, that's all fine, but it's the brains behind it.