ARK Disrupt Issue 95: EVs, Autonomous Taxis, Cryptocurrency, and CRISPR

Please enjoy ARK Disrupt Issue 95. This blog series is based on ARK Brainstorming, a weekly discussion between our CEO, Director of Research, thematic analysts, ARK’s theme developers, thought leaders, and investors. It is designed to present you with the most recent innovation takeaways and to keep you engaged in an ongoing discussion on investing in disruptive innovation. To read the previous issue, click here.

1. Electric Vehicles Made Headlines This Week 

Follow @skorusARK on Twitter

This past week GMGM and FordF made headlines in committing to an electric future. GM said it would unveil two new electric vehicles (EVs) in the next 18 months, and another 20 during the next 6 years. Ford announced that it would shift a third of its investment from internal combustion engine vehicles to EVs. Perhaps most illuminating, Ford’s President of Global Operations said, “Electric vehicles will mean auto factories can have a final assembly area that is half the size, requires half the capital investment and 30 percent fewer labor hours per car.”

ARK believes that EVs will transform the automobile industry for the first time in more than 100 years. By 2022, global EV sales should approach 17 million units, roughly 20% of auto sales. For a deep dive on ARK’s EV research, please read our latest white paper: The Future of Autos and Trucks is Electric.

2. Alphabet’s Waymo Could Launch An Autonomous Taxi Service This Fall

Follow @tashaARK on Twitter

WaymoGOOG may launch an autonomous taxi service, with no safety drivers, this fall according to The Information.  If true, autonomous taxis would debut much sooner than analysts and industry experts have anticipated, giving Waymo first mover advantage in what could be a winner-takes-most market.

ARK’s models suggest that autonomous taxi services will not be ready for prime time until 2019, a forecast consistent with some of the hurdles that Waymo seems to be facing today.  In Phoenix, for example, its autonomous minivans are having trouble making left turns.  Yet, even if it were to launch a right-turn-only autonomous taxi service at very slow speeds, Waymo would be well ahead of its peers.

The press coverage of Waymo’s first mover advantage seems to have caught GM’s Cruise Automation autonomous team off guard. Cruise’s CEO Kyle Vogt published a Medium post that compared the straight-forward driving conditions in Phoenix to the challenges it has encountered in San Francisco. GM also announced this week that it has scaled its autonomous test fleet in California from more than 30 to 100 cars.

Seemingly years ahead of most traditional automakers in the race to launch autonomous cars, even TeslaTSLA would be behind the competition if Waymo sticks to its timeline. According to CEO Elon Musk, Tesla cars equipped with the latest generation of Autopilot will be capable of fully autonomous travel from New York to LA by the end of the year…though he also has said that he could end up with “egg on his face.”

That said, compared to Tesla and GM, Waymo has neither the in-house manufacturing capabilities nor the scale seemingly necessary to move into the position of “winner takes most”. According to The Information, Waymo already has encountered challenges integrating with Fiat Chrysler’sFCAU hybrid platform on the Pacifica minivans.

Given ARK’s expectations, if Waymo succeeds in launching an autonomous taxi service this year, it could add another dimension to Alphabet’s equity valuation.   

3. Welto’s App Will Enable More Mainstream Cryptocurrency Adoption

Follow @bhavanaARK on Twitter

As a medium of exchange, bitcoin is beginning to play an important role in remittances and other cross border payments. In 2016, for example, bitcoin facilitated more than 20% of the remittances between the Philippines and South Korea.

Now Welto is planning to bring bitcoin and other cryptocurrencies into day-to-day payments.  A personal financial management application, Welto allows individuals to manage their finances and facilitate payments in cryptocurrencies. This week the company integrated with Coinbase so that users will be able to pay rent or utility bills with bitcoin. Welto also has integrated with CoinPayments to facilitate payments with altcoins, planning to include Ethereum, ZenCash, Crown, and Ethereum Classic.

5. CRISPR Finds More Applications

Follow @msamyARK on Twitter

While scientists are harnessing CRISPR technology to edit DNA and cure genetic diseases, they also are grappling with the risk of off-target effects that can alter the genome deleteriously and permanently.  To overcome this safety issue, they have begun to edit RNA instead of DNA with CRISPR technology, controlling protein production directly. Targeting protein production at the RNA level obviates the need to make permanent changes at the DNA level.  Consequently, therapeutics based on RNA-targeting are reversible, as patients can stop taking the medications.

In contrast to CRISPR-based RNA editing, RNA interference (RNAi) aims to modify diseases with a different mechanism of action, but it also risks off-target effects. Thus far, RNAi has been able to target only liver-based diseases with accuracy.

CRISPR-mediated RNA interference has the potential to target diseases beyond those of the liver. Locana is a private company based in San Diego leveraging IP generated in 2014 from UC Berkley’s Doudna lab to develop therapeutics aimed at treating patients with neurodegenerative diseases, such as ALS and Huntington’s Disease.

In other CRISPR-related news this week, the Broad Institute released a paper in Nature describing a system called CRISPR-Cas13a that is just as effective as RNAi technology but with higher rates of specificity. Because CRISPR is so adaptable, many legacy bio-engineering tools could be facing much more competition in the years ahead.

ARK's statements are not an endorsement of any company or a recommendation to buy, sell or hold any security. For a list of all purchases and sales made by ARK for client accounts during the past year that could be considered by the SEC as recommendations, click here. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. For full disclosures, click here.