You may have seen that Kyle Vogt, the co-founder and CEO of Cruise, an autonomous vehicle company owned by GM (GM), resigned over the weekend. The resignation surprised some people given how closely Vogt was associated with the company but was not really that much of a shock to others given the series of events that have befallen the company recently. After a voluntary recall involving around 950 of its robotaxis, Cruise went as far as suspending all operations on public roads after a series of events and accidents that drew criticism from many sides.
The sudden nature of the departure and lack of details offered up by Vogt add an air of mystery, but his resignation seems to be more about operational failures than any intriguing back story. There could, of course, be another shoe to drop but so far, it seems that Vogt was a victim of the worries surrounding the safety of autonomous vehicles and Evs more than anything. Those worries, though, are completely illogical.
A year or two ago, the concerns that were hitting the airwaves and internet were primarily about the safety of lithium ion batteries. There had been a few pictures of Teslas (TSLA) and other EVs gutted by fire, something which the worriers claimed was clearly the product of the batteries. That may be true, but it omits one important bit of information: vehicles powered by internal combustion engines (ICEs) are far more likely to catch fire than those powered by electricity. If you get past the pearl clutching and think logically, there is a pretty obvious reason for that: Gas-powered cars carry around a large amount of highly combustible liquid whereas EVs do not.
The number of vehicle fires in America has dropped by more than 50% over the last thirty years as vehicle safety generally has improved but were still 174,000 in 2021. Obviously, there are a lot more ICEs on America’s roads than EVs. However, if you account for that by looking at the number of fires per 100,000 sales the reduced risk of fire in an EV is still evident. There are, on average, 25.1 fires per 100k Evs sold versus 1529.9 for gas vehicles, according to a study done by Auto Insurance EZ and quoted in this Autoweek.com article.
Pictures of burnt out Teslas or whatever hit the news every now and again, but when was the last time you saw a story about the 476 fires that, on average, occur every day in gas or diesel powered vehicles?
The same headline bias exists when it comes to self-driving cars, too. Accidents involving autonomous vehicles (AVs) are reported breathlessly, but something that happens regularly won’t make the news, so the fact that these stories are reported on tells you that they are quite rare. The 6 million or so accidents that happen every year in gas powered vehicles, however, fall in the “dog bites man” category, and most don’t merit a mention, even in the most local of news. And yet because of the reporting, or maybe because most people are terrible at risk assessment, there is a common perception that Evs and AVs are adding an element of danger to America’s roads.
I know that Elon Musk, the CEO and co-founder of Tesla, is a controversial figure these days, but this is one area where he has spoken the truth on a regular basis. The media coverage of safety issues when it comes to EVs and AVs is ridiculous, and is unfairly damaging not just Tesla, but the whole advanced vehicle industry.
Vogt’s resignation this weekend seems initially to be about safety issues in the robotaxi field and is thus being touted by some as further evidence that the EV and AV industries are doomed. It is no such thing. Assuming there is no reason for the resignation that is yet to become public and that it is simply what it seems to be, it is an example of a hysterical mob demanding, and getting, a public sacrifice to appease their angst about a “problem” that doesn’t really exist. “Witch hunt” is an overused phrase these days, but if it turns out that it is about safety issues, the pressure on Vogt to resign fits that description.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Martin Tillier
Martin Tillier spent years working in the Foreign Exchange market, which required an in-depth understanding of both the world’s markets and psychology and techniques of traders. In 2002, Martin left the markets, moved to the U.S., and opened a successful wine store, but the lure of the financial world proved too strong, leading Martin to join a major firm as financial advisor.
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