Welcome to Issue #107 of The German Autopreneur.

It's 2035.

You're in the back of a BMW in Munich. No one's behind the wheel. The car drives itself. You booked the ride on Uber a few minutes ago.

You look out the window. The city looks different. Driverless cars are everywhere. Next to you at the light: a white vehicle with a logo you don't recognize. Chinese. Coming the other way: a Tesla Cybercab.

You pull out your phone, curious about what's actually driving you. The software in your taxi: developed in San Francisco. The AI chip: designed in California, built in Taiwan. The car itself: made in China. The driving data you're generating right now: stored on servers in the US.

The BMW? At least that was still designed by engineers in Munich. Everything else comes from outside Europe.

This isn't science fiction. This is where we're headed. Robotaxis are about to go mainstream. Hundreds of thousands of autonomous vehicles will fill our streets. But the technology behind them isn't European. It's American and Chinese.

I spoke with Malte Broxtermann about this. He works at AlixPartners and advises automakers and suppliers on autonomous driving. A few weeks ago, he briefed the European Commission in Brussels on why Europe is falling behind. Unless we act now.

Today we'll look at where Europe stands in autonomous driving. The two critical gaps we face. And what it means when the vehicles on our streets run on software we don't control.

The Moonshot That Overtook Volkswagen and BMW

2009: Google launches a secret project for autonomous driving. Today, we know it as Waymo. Over $27 billion has flowed into the company since then.

A lot of money. But that's exactly how the model works. Alphabet runs a dedicated division for radical bets: the Moonshot Factory. On its books, these projects fall under 'Other Bets'. Most fail. But when one hits, it's massive.

And Waymo looks like it's paying off.

Waymo just closed a new funding round. Size: $16 billion. At a valuation of $126 billion. That 2009 moonshot is now worth more than VW and BMW combined. Without building a single car.

Waymo completes 400,000 rides per week. 15 million rides in 2025. Over 200 million autonomous kilometers. And 90% fewer serious accidents than human drivers.

This year, Waymo is expanding to over 20 cities. Including London and Tokyo.

4 of the world's 11 most valuable companies are investing in robotaxis: Alphabet, Amazon, Tesla, and NVIDIA.

The Same Thing Is Happening in China

Robotaxis are already part of daily life there. The biggest player: Baidu with its Apollo Go service. Operating in over 20 cities. Over 20 million rides so far. In Wuhan alone, Baidu runs hundreds of robotaxis.

But Baidu isn't alone. Dozens of Chinese companies are in the race. And they're already expanding abroad. WeRide runs autonomous fleets in 11 markets worldwide, covering 70% of downtown Abu Dhabi. Pony AI is testing robotaxis with Stellantis in Luxembourg and expanding to more EU cities in 2026. Baidu is partnering with Swiss Post on autonomous shuttles.

China's robotaxis are already in Europe.

And Europe? A Strategy Problem

Quick context. Autonomous driving has levels:

• Level 2: Your car assists. But you must keep hands on the wheel. If something happens, you're liable

• Level 3: Your car drives autonomously in certain situations. You can text. But you must take over within seconds when the car asks

• Level 4: Your car drives completely autonomously in certain areas. You're just a passenger

China and the US are building robotaxi platforms at Level 4.

Europe has early efforts. VW subsidiary MOIA tests autonomous shuttles in Hamburg and Berlin. But these are pilot projects. Not commercial service. Yet even this project is set to expand to the US this year.

Beyond these pilots, Europe has focused on autonomous driving features for private cars.

Mercedes and BMW were the only automakers seriously trying to scale L3. The promise: legally take your hands off the wheel on the highway.

But both just pulled the plug. They're going back to L2.

The reason: Too expensive. Not enough demand.

An L3 system costs almost as much as L4. But feels barely different from L2 to customers. And then there's liability. With L2, the driver is liable. With L4, the manufacturer is liable. With L3, liability shifts back and forth. A legal nightmare.

Tesla and Chinese players recognized this early. Their strategy: Get L2 to the masses. As cheap as possible, as many vehicles as possible. Collect billions of kilometers of driving data. Then use that data to train AI models that leap straight to L4. That's exactly what Tesla is doing with the Cybercab.

German automakers approached the problem sequentially. First perfect L2. Then develop L3. Then L4. How engineers think.

Tesla and Chinese players understood it as a data problem. Not an engineering problem.

What Europe Is Missing

But it's not just strategy. Europe has 2 critical gaps.

Gap 1: The software.

The intelligence in the vehicle. Software that drives a car on its own. Recognizes objects. Understands traffic rules. Gets from A to B. No one in the EU has a platform like this. The closest thing: Wayve, a London startup piloting with Uber this year. But post-Brexit, Wayve isn't in the EU.

Gap 2: The chips.

NVIDIA has a near-monopoly. Its chips train the AI that powers autonomous cars. And NVIDIA chips go into the vehicles so they can actually drive. Mercedes, Waymo, Baidu. Nearly everyone runs on NVIDIA. Alternatives: Qualcomm, Ambarella, Tesla with its own chips. In Europe: nothing.

Think smartphones. Countless manufacturers. But only 2 operating systems that matter: iOS and Android. Whoever controls the operating system controls the platform. Whoever controls the platform controls the data. Whoever controls the data improves the system faster than everyone else.

Autonomous driving will likely follow the same pattern. 2 to 3 platforms will dominate. If none of them is European, history repeats itself. Europe becomes dependent on technology from the US and China.

Why This Is Dangerous

Let's be real: robotaxi fleets are rolling surveillance platforms. They map every street in real time. They capture everything around them. Whoever controls these fleets owns the data of entire cities. And whoever owns the software can shut it all down.

The US and China get this. The US bans all Chinese software and hardware in connected vehicles. China bans driving data from leaving the country. Both are locking down their markets.

And Europe? Still wide open.

This is exactly what Malte told the European Commission. Autonomous driving is one of the world's biggest future markets. Europe needs to be in the game. But that means setting fair rules for everyone.

My Take

The question isn't whether autonomous driving is coming. It's whether it comes from Europe. Or just to Europe.

Europe has the hardware. The sensors. The vehicles. But not the intelligence that holds everything together. Not the software. Not the chips.

Everyone's talking about sovereignty right now. About semiconductors. About gas. About defense. About big US tech platforms. But autonomous driving barely comes up.

Yet no one's asking whose technology will be inside these vehicles.

Robotaxis bring together everything we've been talking about for years. AI, chips, software, sensors, cloud, data. Autonomous driving is where it all converges. And in most of these areas, we're dependent.

If you're serious about technological sovereignty, you have to talk about robotaxis.

The problem: Autonomous driving is too big for a single automaker or supplier. Too many disciplines need to come together. It takes billions in investment over decades. Bets like that rarely get funded in Europe.

But Europe has something others need: one of the world's largest mobility markets. Anyone who wants to scale robotaxis has to come here. That's leverage. But only if we use it.

Right now, it looks like we're giving that up without a fight.

That's all for today.

Feel free to reply to this email with your thoughts.

Until next week,
Philipp

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I’m Philipp Raasch.
Ex-Mercedes. Now I help 80,000+ automotive professionals make sense of the industry's biggest transformation.