Autonomous vehicles are coming fast to a city near you. By 2030, analyst predict that self-driving cars will become a normal way of life. The technology is likely to stand the test of time, but which companies will prosper?
There are plenty of tech companies developing autonomous vehicle technology, but here are five companies working on robocars that could be worth the investment.
Alphabet Was 1st But Will It Remain Standing?
Alphabet Inc’s (NASDAQ:GOOGL) Waymo subsidiary has been deeply involved in self-driving car development since 2009. By May 2012, the company was issued the first state driver’s license by the state of Nevada for a self-driving test in Las Vegas. By 2016, the company’s self-driving cars logged two million miles on the road.
Because the company has extensive expertise in autonomous technology, it has two virtual simulations that it is testing. CarCraft was created in 2017 and is responsible for over 5 billion driven miles. Simulation City was launched in 2021 to help train, test, and validate the “Waymo driver” software for rider-only trips.
Over 300 of the company’s nearly-600-vehicle fleet operate in the state of Arizona, and more specifically in the East Valley surrounding Phoenix. The company started 2020 with 15 billion virtual and 20 million real-world driven miles.
Investors like Andreessen Horowitz and AutoNation poured $2.5 billion into Waymo in the summer of 2021. Some analysts believe the division could be potentially worth around $30 billion, which makes it a strong future revenue stream for parent company Alphabet.
Still, in the perspective of a $2 billion market capitalization, the Waymo basket doesn’t hold all of the tech giant’s eggs.
Nvidia Has Audi, Tesla and Mercedes As Partners
Nvidia Corporation (NASDAQ:NVDA) released the Nvidia Drive AGX autonomous vehicle computing platform to support AI-powered robocars. The platform supports all of the sensors and hardware acceleration needed to create a robust artificial intelligence system.
It also introduced the Drive Atlan system-on-chip that targets 2025 vehicle models with over 1,000 trillion operations per second. This is despite an MIT report estimating we’re still another decade away from truly self-driving vehicles navigating our roads.
The platform also enables a pay-as-you-go model where drivers can upgrade and personalize the vehicle through software updates and adjust as necessary. On-board computers have long been responsible for optimizing our vehicles’ performance, but they’re playing a much larger role in vehicle automation.
And this push helps Nvidia prove the long-term dependency on its semiconductors. That’s a big deal as Intel (NASDAQ:INTC) makes moves to better compete with market leader Taiwan Semiconductor Manufacturing (NYSE:TSM).
Luminar Technologies Best For Commercial Vehicles
Luminar Technologies Inc (NASDAQ:LAZR) is a lidar technology manufacturer with advanced sensors that let vehicles detect and respond better to their environment in real time. Light detection and ranging systems use light to create high-resolution images that provide an accurate view of their surroundings, enhancing a vehicle’s safety.
The technology is often discussed for usage in commercial vehicles like semitrucks and delivery vehicles. However, the cost is prohibitively high for the average consumer vehicle, which Luminar says will add another $1,000 in manufacturing costs per vehicle.
Volvo is the first car company to partner with Luminar to integrate its technology as a standard component in its vehicles. The car company plans to be fully electric by 2030, and its electric flagship EV will use the technology as a standard safety feature.
This helped push Luminar’s market cap to over a $6 billion and some speculate that figure could multiply over the next decade as more companies catch on. But not every car company is excited about the implementation of lidar, including EV frontrunner Tesla.
Can Tesla 3x From Here?
Tesla Inc (NASDAQ:TSLA) is a leader in both electric and autonomous vehicles. The company launched its Full Self-Driving subscription package, which will cost $199 per month or a one-time $10,000 payment. The package includes autopilot navigation, auto lane change, autopark, summon, traffic light and stop sign control, and full self-driving computer.
Instead of lidar, Tesla’s autopilot feature uses eight cameras, 12 ultrasonic sensors, radar, and an onboard computer to help it steer. The technology can read lane paint on the road while also detecting other cars to successfully achieve lane changes and more.
CEO Elon Musk is confident the company will be the first to reach Level 5 autonomy in which vehicles need no input from the driver. In the meantime, it’s continuing to push the boundaries with the first wide-market release of self-driving technology.
This helped propel the company to a market capitalization of over $600 billion and the most optimistic analysts project as much as a 3x rise from here.
Apple Targets $5 Trillion Industry
Apple Inc (NASDAQ:AAPL) started testing its self-driving vehicle technology on California roads in early 2017. The company leased several 2015 Lexus RX450h SUVs from Hertz to complete these tests, and it held talks in 2021 with Hyundai to discuss a Kia-produced Apple car by the end of the decade.
While those talks fizzled out, the Apple car is planned for a 2024 production. Apple’s car could see delays, but its roadmap showcases how technology and vehicle manufacturers are merging in this new IoT-connected world.
The self-driving car team (called Project Titan) is now being led by former Apple Watch and Health executive Kevin Lynch. And it hired a longtime BMW veteran to help with the development.
If the past is any indication, there’s a distinct possibility this over-$2 trillion company will make autonomous vehicles accessible to mainstream audiences, which could provide it with a large bite of this $5 trillion industry by the end of the decade.
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