Alphabet’s (GOOGL - Free Report) self-driving unit, Waymo is leaving no stone unturned to bolster presence in the autonomous driving space.
Reportedly, Waymo plans to start the company’s road testing of its driverless fleet in a new hub in Dallas, TX. The fleet will consist of Peterbilt 18-wheelers complete with cameras, lidar and on-board computers.
Though the trucks will not carry any commercial goods for now, they will be loaded up with weights to mimic a commercial load. Reportedly, these autonomous trucks will also be tested on other highways around Dallas.
The latest move of the company gives a glimpse into the execution of the self-driving truck project.
With autonomous truck services, it intends to explore opportunities beyond ride hailing services on the back of robust self-driving technology and artificial intelligence techniques.
The company began the testing of self-driving trucks in Arizona in 2017. In addition, Waymo tested self-driving trucks in a handful of other locations in the United States, including the San Francisco area and Atlanta.
In 2018, the company announced plans to use self-driving trucks to deliver freight services, in a bid to further expand its scope in this particular space.
In the truck and freight industry, driver wages account for large part of the total cost. Consequently, Waymo’s autonomous trucks are likely to benefit the industry by cutting down driver wages.
Despite the alluring benefits of self-driving technology and vehicles, some inevitable challenges prevail in the market. The foremost problem plaguing this technology is the chance of mishaps on road.
However, in order to avoid any emergency or untoward incident on road, self-driving trucks have two trained safety drivers who can take over if required. This will aid the company in countering the major challenge related to self driving.
Further, its strong focus on innovation will aid it in removing technical hurdles.
We believe growing autonomous driving initiatives are likely to aid Alphabet to penetrate into the global self-driving car and truck market. Per Grand View Research, this market is projected to witness a CAGR of 63.1% between 2021 and 2030.
Further, per Zion Market Research, this market is expected to witness a CAGR of 25.7% between 2018 and 2024, and hit $26.58 billion by 2024.
Alphabet is currently riding on growing initiatives in this particular market that are likely to aid it in rapidly penetrating this space.
In regard to this, Waymo unveiled its first paid self-driving taxi, Waymo One in Arizona, which currently serves people in the suburbs of Phoenix, namely Chandler, Tempe, Mesa and Gilbert. Moreover, the company simplified the system by creating an app via which riders can avail the service.
Waymo’s efforts toward licensing its technology to automakers for direct selling to customers remain a key catalyst. Additionally, it is reportedly seeking outside funding in order to expand the autonomous vehicle business unit.
Therefore, Alphabet’s strong endeavors toward enhancing the self-driving service with commercial autonomous driving cars, trucks and taxis will continue to give it a competitive edge against competitors.
Zacks Rank & Key Picks
Currently, Alphabet carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector include Dropbox (DBX - Free Report) , Etsy, Inc. (ETSY - Free Report) and Maxim Integrated Products, Inc. (MXIM - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rate of Dropbox, Etsy and Maxim is pegged at 34.4%, 26.5% and 10%, respectively.
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