Autonomous vehicle stocks have been red hot.
Next-generation auto technology has been one of the hottest investing themes on Wall Street in recent years. Auto and tech companies have poured billions of dollars into the race to gain market share in what will most certainly be massive markets for electric and autonomous vehicles. In 2020, a handful of companies made groundbreaking advances in AV technology, including the launch of the first publicly available driverless vehicle services in a major U.S. city. Here are seven autonomous vehicle stocks that Guidehouse Research ranked as the early market leaders in next-generation auto technology.
Alphabet (ticker: GOOGL)
In October 2020, Alphabet subsidiary Waymo officially won the race to launch the first Level 4 fully driverless vehicle service in the U.S. Waymo One users in the Phoenix area can now hail fully driverless rides from Waymo’s fleet of more than 300 vehicles. The service is limited to only about a 50 square mile service radius, but after logging more than 20 million test miles, Waymo is looking to expand the service in 2021 and beyond. Given Google’s track record of innovative technology, it’s no surprise Waymo is the market leader in AV tech as well.
New Ford CEO Jim Farley is taking an aggressive approach to autonomous and electric vehicles. Farley took over in October, and he recently announced that Ford would be raising its investments in AV and EV tech to $29 billion through 2025. In October, Ford also unveiled its fourth-generation self-driving test vehicles based on the Ford Escape Hybrid crossover. Ford is adding the new vehicles to its current AV test fleets operating in Austin, Texas; Detroit; Miami; Palo Alto, California; Pittsburgh; and Washington, D.C. Ford and partner Argo AI plan to launch a self-driving commercial business in 2022.
General Motors (GM)
After receiving permission from the state of California to test Level 4 AVs on public roads in October, General Motors’ Cruise AV unit began testing fully driverless vehicles in San Francisco in December 2020. Unlike Waymo’s service, the Cruise service is not yet available to the public. In January, software giant Microsoft (MSFT) announced a long-term partnership with GM to give Cruise access to the company’s software and cloud services expertise as part of the push to commercialize AV technology. Microsoft’s $2 billion investment in Cruise values the company at $30 billion, nearly 40% of GM’s current market cap.
In January, Chinese search giant Baidu joined Cruise, Waymo, Nuro, Zoox and AutoX as the sixth company to be granted a fully autonomous testing permit in California. Baidu has been testing AVs in California with safety drivers since 2016. Baidu received China’s first license to test driverless vehicles on public roads in Beijing in December. The company also showcased its self-driving Apollo vehicles at its Baidu World developer conference in September. Earlier this month, Baidu beat Chinese peers in every testing category for the third consecutive year in the annual Beijing Autonomous Vehicles Road Test Report.
When semiconductor giant Intel acquired Israeli self-driving tech company Mobileye for $15.3 billion back in 2017, it immediately became a major player in the AV space. Mobileye is the world’s leading producer of advanced driver-assistance systems. One of Mobileye’s major advantages is its data. The company currently has data-sharing agreements with six partners, including Volkswagen, BMW and Nissan. Mobileye reportedly gathers roughly 5 million miles of data every day. At the Consumer Electronics Show in January, Mobileye said its laser sensors will make self-driving cars affordable enough to mass-produce and sell to retail buyers by 2025.
Driving software company Aptiv and partner Lyft (LYFT) have given public passengers in the Las Vegas area 100,000 paid rides in self-driving vehicles, and 94% of passengers enjoyed the experience. Aptiv and partner Hyundai are working together on an AV technology joint partnership called Motional. The partnership has already achieved several AV milestones, including launching the world’s first robotaxi pilot test in Singapore and completing the first cross-country autonomous trip from New York to San Francisco. In December, Lyft and Motional said they plan to launch fully autonomous vehicles in multiple cities on the Lyft network starting in 2023.
Volkswagen has invested $2.6 billion in Argo AI, which plans to roll out fleets of robotaxis and autonomous delivery vehicles in the U.S. by 2022. In September, Volkswagen began testing AVs in China for the first time after announcing a $1.18 billion investment in a 50% ownership stake of Chinese electric vehicle company JAC in early 2020. CEO Herbert Diess recently said he expects AVs will be ready for retail sale sometime between 2025 and 2030. In November, Volkswagen said it plans to spend $86 billion on AV and EV technology through 2025.
Top seven autonomous vehicle stocks to buy now:
— Alphabet (ticker: GOOGL)
— Ford (F)
— General Motors (GM)
— Baidu (BIDU)
— Intel (INTC)
— Aptiv (APTV)
— Volkswagen (VWAGY)
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