How to Invest in the Self-driving Vehicle Revolution

With the topic of “driverless cars” seeming to pop up in every other news headline, wouldn’t it be a good idea to invest in the companies that make these vehicles? Some of the biggest names in the automotive industry already have thrown serious money at the technology behind autonomous cars. Mercedes, Tesla, Ford, GM and others are in it to win it.

As a car buff and auto-show devotee, I was shocked at how quickly driverless car technology caught on, and how some of the biggest companies on earth went head-over-heels for the idea. California and a few other states have already put laws on the books to govern the rules for driverless vehicles. Nevada is another state that seems to be out front on this trend, given Elon Musk’s gigantic investment in the Silver State. Musk’s Tesla, along with Google Inc., are two of the prime movers in the autonomous car field, but where does that leave average investors?

I spent time looking for companies that are most involved in the driverless car market, and made a list of the ones that sell stock to the public. That seemed to be the best place to start if I wanted to catch some of the ground-floor investing activity in this exciting, fast-growing market segment.

Here is a short list of the driverless car stocks I found, along with a short description of each one. After that, I have included a brief factsheet about driverless cars that any investor can use as a general information base about driverless technology.

Driverless Car Stocks and Facts

  • Google, Mercedes-Benz and Delphi Automotive are three of the companies at the forefront of the self-driving car revolution. Though all three companies have other, much larger divisions, they are all literally pouring money into self-driving technology. One thing all three are working on is a way to bring costs down. The technology required to build and operate self-driving vehicles is still way above the “consumer toleration” level, according to experts in the field.
  • Nissan hopes to have a fully automated car ready for consumer showrooms by 2020, well ahead of its competitors. Right now, the Japanese innovator is using it Leaf all-electric car as the trial vehicle for automated driving rehearsals and tests.
  • Audi and Bosch/BMW are not far behind Nissan, and have been testing high-level autonomous vehicles for several years now. Look for Bosch/BMW to introduce a fully-automated car to showrooms by 2025. That will be the year, by the way, when about a dozen automakers will be selling fully or partially-automated cars and trucks to consumers.
  • Experts believe that driverless cars could save as many as 30,000 lives per year in the U.S. once autonomous vehicles are the rule rather than the exception. Studies have shown that a mostly autonomous car culture would have 90 percent fewer traffic deaths annually.
  • By the year 2035, about 10 percent of all cars sold will be fully autonomous, meaning that about 76 million “vehicular robots” will be on the road.
  • In 2014, the added cost of a fully autonomous car was $100,000 higher than a normal car’s sticker price. By 2025, that added cost will be in the $10,000 range.
  • The U.S. government has already committed to $4 billion toward autonomous car development between now and 2020, but that figure could skyrocket once the technology proves itself.
  • Experts agree that China will likely be the dominant force in the autonomous car market, having already spent untold (it’s a “state secret”) billions on the technology. One consulting group in the auto industry has estimated that China will sell about 30 percent of the total worldwide number of self-driving cars in the consumer marketplace.

 

Backseat Reading, and a Driverless Car Demo

  • Driverless: Intelligent Cars and the Road Ahead (MIT Press): From MIT Press, “Driverless” is a level-headed look at the entire autonomous vehicle market and its long-term impact on society. The author explains in simple language why the entire economic arrangement we’re used to might be completely redrawn, why the word “commuting” will take on a whole new meaning, and why so many jobs will be eliminated and created simultaneously. Not since the invention of the computer has there been a societal and economic shift so important. There’s reason to cheer and fear the driverless car revolution, but being prepared for it is the best way to deal with the massive changes ahead.
  • The Great Race: The Global Quest for the Car of the Future: Investors who want to navigate the driverless car market for profit need to read this book. It recounts the long journey that the automotive sector has traveled in the past century, from those gas-guzzling days in the early 1900s to the age of green design and fuel-miser cars that fight pollution and save money for their owners. With the advent of driverless technology, many of the environmental challenges will be easier to face. Computerized cars, taken as a collective group, work pretty much as an adaptable version of mass transit, so argues the author. This is good news for the environment and uncertain news for the economy, even if those early to the investment surge stand to make a fortune. For a complete examination of the automotive sector and its possible future, investors can’t go wrong with this insightful, prescient book.
  • Take a ride through the streets of Pittsburgh in an Uber driverless car during a public demo of the high-tech vehicle. Two engineers from the company discuss the capabilities of the Ford model used in the experiment. Click here to see video of the demonstration.

 

No One Behind the Wheel

Experts predict there will be 10 million self-driving vehicles on the roadways by the year 2020. The economic and social impact of this new form of technology will be far reaching, and that’s an understatement. That 10 million figure could easily double within the next decade, or maybe even triple.

What will be the effect of the self-driving car on society? A British firm has estimated that there will be fewer deaths and accidents due to autonomous vehicle technology. Indeed, one of the more formidable barriers to the acceptance of self-driving cars has been the insurance industry. There just aren’t enough laws on the books yet for insurers to feel comfortable with the concept.

It’s strange to see the tech companies competing directly with automotive firms for a foothold in the driverless car marketplace. Firms like Google are heavily invested, as are Mercedes-Benz and other carmakers. It seems like everyone realizes this is going to be the big trend of the next few decades and they all want in on the ground floor.

What are your thoughts on the topic? Do you see driverless cars taking over the roads within a decade? Would you trust your safety to an autonomous vehicle? Let us know your opinions about the topic in the comments section below. Or visit our Facebook page and tell us how you see the issue panning out. 

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