3 Companies Leading the Charge to the Driverless Car Future

Today, driving long distances can be stressful and boring. Monotonous scenery lulling you to sleep, horrible drivers that make you question how they got their driver’s license, not to mention the wasted time where you could be doing something more productive. Right now, there are companies working on changing all that. Driverless cars, also known as autonomous vehicles, are quickly becoming a reality. With advancements in artificial intelligence and sensor technology, these cars are able to navigate roads and traffic without the need for a human driver. 

Autonomous vehicles provide 5 key benefits:

1. 1 - Improved safety: Driverless cars have the potential to greatly improve safety on the roads by reducing the number of accidents caused by human error. AI algorithms and sensors analyze data from the car's surroundings and make real-time decisions about driving, reducing the risk of accidents caused by distracted, drunk, or tired drivers. To put this into perspective, in Q4 of 2022, there was an automobile crash approximately every 652,000 miles driven in the US. For Tesla’s using Autopilot technology there was a crash every 4.85 million miles driven! That’s a safety improvement of over 7x!
2.  
3. 2 - Increased accessibility: Driverless cars could also improve accessibility for people who are unable to drive, such as the elderly or disabled. With driverless cars, people who are unable to drive could regain their independence and mobility.
4.  
5. 3 - Reduced traffic congestion: Tired of some jerk driving 40 mph in the fast lane? Driverless cars could also reduce traffic congestion by optimizing traffic flow and reducing the number of cars on the road. Self-driving cars can communicate with each other and with traffic management systems to avoid congestion and find the most efficient routes.
6.  
7. 4 - Increased productivity: With driverless cars, people could spend their time commuting working, studying, or relaxing, increasing productivity and reducing stress.
8.  
9. 5 - Environmental benefits: This last one is the most contentious. While electric driverless cars could greatly reduce greenhouse gas emissions, helping to combat climate change, they may need other resources which are not good for the environment.
10.  

While dozens of companies are attempting to carve out their niche in this nascent industry, there are 3 clear leaders.

#1 – Waymo Technologies (GOOG).: Waymo is a subsidiary of Alphabet, Google's parent company, and is considered the leader in autonomous driving technology. Unfortunately you cannot buy Waymo stock directly, you would have to buy Alphabet shares (GOOG). The company has been developing self-driving cars since 2009 and has tested its vehicles on public roads for over 20 million miles.

Waymo's self-driving cars use a combination of lidar, radar, and cameras to detect their surroundings and navigate roads safely. The company's AI algorithms analyze data from these sensors to make real-time decisions about acceleration, braking, and steering. Waymo has also developed its own hardware and software to ensure its vehicles are fully optimized for autonomous driving. Currently Waymo has a fleet of autonomous ride-hailing vehicles (Think Uber) in Phoenix Arizona and is looking to expand to other major US cities.

From a technical perspective, Alphabet has been struggling over the past year. There was an aggressive price decline from $152 in February of 2022 to its recent lows of $83 in November of 2022. The good news is the declines have stalled. The past 6 months have been pretty much sideways for the share price, with higher lows being made since November. 

#2 – Tesla (TSLA): Tesla is best known for its electric cars, but the company has also been working on developing autonomous driving technology for several years. Tesla's Autopilot system uses AI algorithms to control acceleration, braking, and steering, and the company's vehicles are equipped with sensors, cameras, and radar to detect their surroundings.

Tesla has collected data from millions of miles driven by its vehicles and uses this data to improve its autonomous driving technology continuously. The company's vehicles can also receive over-the-air software updates, which means that Tesla can improve its autonomous driving algorithms without requiring owners to bring their cars into a dealership.  

Tesla suffered a much more severe price decline than Alphabet over the past year and a half. However it has shown greater strength in recent months, displaying a bullish cup and handle formation starting back in November 2022.

#3 – Baidu (BIDU): is a Chinese technology company that has been working on developing autonomous driving technology since 2013. The company's Apollo platform is an open-source platform that provides developers with the tools and software necessary to develop autonomous driving technology.

Baidu's autonomous driving technology uses a combination of lidar, radar, and cameras to detect its surroundings, and its AI algorithms analyze this data to make real-time decisions about driving. The company has also developed its own hardware, including a specialized computer chip designed specifically for autonomous driving.

The chart of Baidu is starting to look pretty good. Its long term downtrend was broken back in January of this year, and a strong shorter term uptrend began back in October of 2022.

Transportation is currently undergoing an automation revolution. While we are a ways off from seeing a Jetsons flying car become a reality, the act of physically driving a car may become a thing of the past. The Society of Automotive Engineers (SAE) defines 6 levels of driving automation ranging from 0 (fully manual) to 5 (fully autonomous).

All 3 of these companies are currently at level 4, which is “High Driving Automation”. With just one step left until we get to full autonomous driving vehicles, it’s clear that we are about to embark on a whole new level of transportation. These 3 companies are leaders in the development of autonomous driving technology and are continually improving their AI algorithms to make self-driving cars a reality. As technology continues to improve, we can expect more companies to enter the market and accelerate the development of autonomous driving technology.

More Stock Market News from Barchart

• Hasbro Stock Has a 5.5% Yield, But Attracts Large Unusual Put Options Activity
• Nvidia’s Valuation May Be Frothy
• Strength in Tech Stocks Boosts Market Sentiment
• Should Investors Consider Adding Blue Chip Stocks to Their Portfolios in 2023?

On the date of publication, Merlin Rothfeld did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.