Episode summary
Driverless Cars Take the Fast Lane
Thoughts on the Market (Morgan Stanley)
· · 10 min · Guests: Brian Nowak, Andrew Percoco
Summary
Autonomous vehicles could move from niche to mainstream in 2026 as availability expands across more U.S. cities. The host and a guest argued that overall U.S. urban access to autonomous driving may rise from about 15% at the end of 2025 to over 30% by year-end 2026, helped by new rollouts from Waymo, Tesla, Zoox and others. They also flagged snow as an important proving ground, with Waymo expected to launch in Washington, DC, and potentially in Colorado and Michigan.
The guest said the main growth drivers are regulatory approvals, safety performance and cost. On cost, Tesla was described as having a meaningful advantage because of its $35,000 vehicle, camera-only sensor approach and roughly 40% cost advantage versus Waymo. But Waymo was said to lead on safety, with a much lower crash rate in public data from Austin, while Tesla’s smaller mileage base means investors should watch how quickly its safety data improves through 2026.
The discussion also focused on ride-share implications. Autonomous trips may still be less than 1% of total U.S. miles by 2032, but they could represent 20% to 30% of the ride-share industry in some scenarios. That makes partnerships critical for Uber and Lyft, while Tesla’s direct approach could reshape both autonomous adoption and ride-share competition if it scales without safety drivers.
Key takeaways
- The host expects U.S. urban autonomous availability to more than double, from about 15% at end-2025 to over 30% by end-2026.
- The guest said Tesla has about a 40% cost advantage versus Waymo today because of vertical integration and a camera-only sensor suite.
- The guest said Waymo leads on safety in Austin, with about one crash every 400,000 miles versus Tesla at about every 50,000 miles, though Tesla’s mileage base is much smaller.
- The host said snow-city launches in 2026, including Washington, DC and potentially Colorado and Michigan, could prove AVs can work in harsher conditions.
- The host said autonomous trips could be 20% to 30% of ride-share in some scenarios, making partnership strategy important for Uber and Lyft.
Notable quotes
“we think 2026 could be a gamecher and a point of inflection for autonomous vehicles and autonomous driving”
“overall availability for autonomous driving in the US is going to go from about 15% of the urban population at the end of 2025 to over 30% of the urban population by year end 2026”
“We have multiple new cities across the United States where we expect Whimo, Tesla, Zuks, and others to expand their fleet”
“Whimo is closer to every 400,000 miles per crash. So today, Whimo is the leader on on safety”
How the episode opens
Welcome to Thoughts on the Market. I'm Brian Noak, Morgan Stanley's head of US Internet Research. And I'm Andrew Pokco, head of North America Autos and Shared Mobility Research. Today we're going to talk about why we think 2026 could be a gamecher and a point of inflection for autonomous vehicles and autonomous driving. It's Thursday, January 8th at 10:00 a.m. in New York. So, Andrew, let's get started. Have you ridden an autonomous car before?
Yeah, absolutely. took a few in in LA, took one in San Francisco not too long ago. Uh, pretty seamless and interesting experience to say the least. — Any any accidents or awkward left turns or did you feel pretty comfortable the whole time?
No, I felt pretty comfortable the whole time. No edge cases, no issues. So, all all fivestar reviews for me.
Andrew, we think your answer is going to be a lot more common as we go throughout 2026. As autonomous availability scales throughout more and more cities, things are changing quickly. And we kind of look at our our model on a city-by-city basis.
We think that overall availability for autonomous driving in the US is going to go from about 15% of the urban population at the end of 2025 to over 30% of the urban population by year end 2026.
Yeah, totally agree, Brian. I'm just curious like maybe lay out for us what you're expecting for 2026 in more detail in terms of city uh rollouts, players involved and and what we should be watching for throughout the next 9 to 12 months. We have multiple new cities across the United States where we expect Whimo, Tesla, Zuks, and others to expand their fleet, expand autonomous driving availability, and ultimately make the product a lot more available and commonplace for people.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- autonomous vehicles
- driverless cars
- auto adoption
- shared mobility
- us autos research
Watch the episode
Watch “Driverless Cars Take the Fast Lane” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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