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5 Self-Driving Car Stocks With Massive Upside Potential in 2021
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Self-driving car or autonomous vehicle (“AV”) technology is a breakthrough in the automotive industry. AVs are no longer a figment of imagination in the era of artificial intelligence (“AI”) and are radically transforming travel. Imagine traveling being as simple as letting your car drive you with just an input of the desired destination from your end, while you nap or read a book, or maybe surf the web.
The AV technology is based on advanced driver-assistance systems (“ADAS”)—including emergency braking, backup cameras, adaptive cruise control, and self-parking systems. The robot-driven vehicles use AI to enable cars to navigate through traffic and handle complex situations.
The race to get self-driving vehicles on the road has been gearing up in the past couple of years, with multiple auto tech giants making remarkable progress. Last week, tech giant Apple Inc. (AAPL - Free Report) announced plans to release its driverless cars in the market by 2024. The car will be equipped with an in-house battery, which will reduce the cost of batteries and increase the vehicle's range. AVs will undoubtedly usher in a new era for transportation in the coming years, owing to its state-of-the-art technology and rising demand.
Promising Prospects of AV Market
Higher levels of autonomy have the potential to reduce risky and dangerous driver behaviors. Favorable regulatory framework and increasing government funding are expected to play a crucial role in accelerating the self-driving car market’s growth in the coming years. Governments across the globe are administering supportive regulations to enhance the adoption of AVs. For instance, the U.S. government has started procuring AVs for defense applications, while the U.K. government has granted permission to run self-driving cars on roads.
Moreover, the coronavirus pandemic has had a significant impact on the automated mobility sector. Social distancing has prompted the adoption of driverless cars by logistics companies, delivery companies and the food service industry, propelling the demand for AVs.
Growth of the AV market is estimated to gather momentum on rising investment in digital infrastructure and surging disposable income among consumers in developed countries. Per a report by Million Insights, the global autonomous vehicle market demand is projected to account for 4.2 million units by the end of 2030, witnessing a CAGR of more than 63% during the forecast period. Additionally, per a report by Research and Markets, the global autonomous vehicle market is estimated to value $2,044.9 billion by 2030, expanding witnessing a CAGR of 39.1% from 2020 to 2030.
Given the upbeat projections, there are a handful of self-driving stocks, which are considered as a can’t-miss investment for the long term.
Our Picks
Baidu Inc. (BIDU - Free Report) : This China-based multinational technology company is one of the largest AI and Internet companies in the world. In 2019, Baidu entered a partnership with China-based state-owned carmaker, FAW Group, to develop the Hongqi EV AI-powered taxi, being its first mass-produced robotaxi in China.
The vehicle is still being used in unmanned driving tests in multiple cities, including Beijing and Guangzhou. Reportedly, its lineup of 300 driverless vehicles logged 1.2 million miles in 13 different cities. A few months back, Baidu rolled out its first fully AI-powered car as part of its Apollo project. The Baidu Apollo integrated AI system allows vehicles to drive independently, without a safety driver inside the vehicle. To ensure public safety in extreme road conditions, Baidu integrated 5G-enabled teleoperation into its vehicles.
Tesla (TSLA - Free Report) : Tesla is set to release its full self-driving (“FSD”) driver-assistance system as a subscription service in early 2021. Tesla cars are equipped with a standard Autopilot —a driver-assistance feature that can brake, accelerate and steer automatically. The FSD package, however, gives added capabilities that enable cars to self-park, change lanes, and recognize stop signs and traffic lights.
In October, Tesla launched the beta version of the long-awaited feature to some owners. Autopilot Hardware 3.0 is the latest upgrade to the company’s FSD hardware, which happened early last year, and it has all the components necessary for FSD features.Within this upgrade, Tesla began equipping its new vehicles with a new, custom-built computer designed for partially-autonomous and fully-autonomous driving. The new hardware enabled Tesla to demonstrate further progress toward full autonomy. The company plans to use Models S, X, 3 and Y as future robotaxis.
The company currently flaunts a Zacks Rank #1.
General Motors (GM - Free Report) : Cruise, the self-driving car start-up, majority-owned by General Motors, recently deployed fully driverless cars in San Francisco. This will help Cruise to penetrate its way toward launching a robotic taxi service that would compete against Uber and Lyft in the hub of the leading ride-hailing services.
Earlier this year, General Motors unveiled its Origin driverless electric shuttle, which has no steering wheel, pedals or other manual controls. The company has been pushing for a first-mover advantage in autonomous vehicle services and has operated a limited autonomous vehicle ride-hailing fleet with a human attendant in Phoenix since 2018. The most recent round of fundraising for Cruise valued the company at $19 billion.
The company currently sports a Zacks Rank #1.
Ford (F - Free Report) : Ford plans to roll out its self-driving commercial business in 2022 with vehicles based on the Ford Escape Hybrid crossover. The vehicles are based on the automaker’s fourth-generation autonomous technology in partnership with Argo AI, a Pittsburgh-based autonomous vehicle start-up.
Ford and German automaker Volkswagen AG (VWAGY - Free Report) had split an 80% majority stake in Argo AI earlier this year. Ford initially planned to launch the commercial self-driving vehicle business in 2021 but delayed it until 2022 amid the pandemic-induced crisis. Ford has committed $4 billion to autonomous vehicle development through 2023, including a $1-billion investment in Argo AI.The company currently carries a Zacks Rank #2 (Buy).
Alphabet (GOOGL - Free Report) -owned self-driving car pioneer Waymo is the leader of AV technology, being the first company to roll out Level 5 fully AV. Although Waymo is still at its budding stage, the company is valued at $30 billion already. Waymo, which began its autonomous mobility journey in 2009, has logged 20 million test miles on public roads in 25 different cities.
In 2018, the company launched a limited self-driving taxi service in Phoenix along with a driver for safety purposes. This fall, the company garnered the limelight as it kicked off a fully autonomous car service without a driver in Phoenix. The service was made available to members of Waymo One, the company’s premium membership, on Oct 8, and is now available to anyone in Chandler, southeast Tempe, and southwest Mesa through Waymo’s app.
This October, Waymo and Daimler Trucks partnered to create an autonomous version of the Freightliner Cascadia truck. Recently, Waymo inked a deal with the Transportation Research Center to build a full mock-city to test its next generation of autonomous cars and trucks.
Waymo’s parent company Alphabet currently carries a Zacks Rank of 3 (Hold).
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?
These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold.
Image: Bigstock
5 Self-Driving Car Stocks With Massive Upside Potential in 2021
Self-driving car or autonomous vehicle (“AV”) technology is a breakthrough in the automotive industry. AVs are no longer a figment of imagination in the era of artificial intelligence (“AI”) and are radically transforming travel. Imagine traveling being as simple as letting your car drive you with just an input of the desired destination from your end, while you nap or read a book, or maybe surf the web.
The AV technology is based on advanced driver-assistance systems (“ADAS”)—including emergency braking, backup cameras, adaptive cruise control, and self-parking systems. The robot-driven vehicles use AI to enable cars to navigate through traffic and handle complex situations.
The race to get self-driving vehicles on the road has been gearing up in the past couple of years, with multiple auto tech giants making remarkable progress. Last week, tech giant Apple Inc. (AAPL - Free Report) announced plans to release its driverless cars in the market by 2024. The car will be equipped with an in-house battery, which will reduce the cost of batteries and increase the vehicle's range. AVs will undoubtedly usher in a new era for transportation in the coming years, owing to its state-of-the-art technology and rising demand.
Promising Prospects of AV Market
Higher levels of autonomy have the potential to reduce risky and dangerous driver behaviors. Favorable regulatory framework and increasing government funding are expected to play a crucial role in accelerating the self-driving car market’s growth in the coming years. Governments across the globe are administering supportive regulations to enhance the adoption of AVs. For instance, the U.S. government has started procuring AVs for defense applications, while the U.K. government has granted permission to run self-driving cars on roads.
Moreover, the coronavirus pandemic has had a significant impact on the automated mobility sector. Social distancing has prompted the adoption of driverless cars by logistics companies, delivery companies and the food service industry, propelling the demand for AVs.
Growth of the AV market is estimated to gather momentum on rising investment in digital infrastructure and surging disposable income among consumers in developed countries. Per a report by Million Insights, the global autonomous vehicle market demand is projected to account for 4.2 million units by the end of 2030, witnessing a CAGR of more than 63% during the forecast period. Additionally, per a report by Research and Markets, the global autonomous vehicle market is estimated to value $2,044.9 billion by 2030, expanding witnessing a CAGR of 39.1% from 2020 to 2030.
Given the upbeat projections, there are a handful of self-driving stocks, which are considered as a can’t-miss investment for the long term.
Our Picks
Baidu Inc. (BIDU - Free Report) : This China-based multinational technology company is one of the largest AI and Internet companies in the world. In 2019, Baidu entered a partnership with China-based state-owned carmaker, FAW Group, to develop the Hongqi EV AI-powered taxi, being its first mass-produced robotaxi in China.
The vehicle is still being used in unmanned driving tests in multiple cities, including Beijing and Guangzhou. Reportedly, its lineup of 300 driverless vehicles logged 1.2 million miles in 13 different cities. A few months back, Baidu rolled out its first fully AI-powered car as part of its Apollo project. The Baidu Apollo integrated AI system allows vehicles to drive independently, without a safety driver inside the vehicle. To ensure public safety in extreme road conditions, Baidu integrated 5G-enabled teleoperation into its vehicles.
The company currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Tesla (TSLA - Free Report) : Tesla is set to release its full self-driving (“FSD”) driver-assistance system as a subscription service in early 2021. Tesla cars are equipped with a standard Autopilot —a driver-assistance feature that can brake, accelerate and steer automatically. The FSD package, however, gives added capabilities that enable cars to self-park, change lanes, and recognize stop signs and traffic lights.
In October, Tesla launched the beta version of the long-awaited feature to some owners. Autopilot Hardware 3.0 is the latest upgrade to the company’s FSD hardware, which happened early last year, and it has all the components necessary for FSD features.Within this upgrade, Tesla began equipping its new vehicles with a new, custom-built computer designed for partially-autonomous and fully-autonomous driving. The new hardware enabled Tesla to demonstrate further progress toward full autonomy. The company plans to use Models S, X, 3 and Y as future robotaxis.
The company currently flaunts a Zacks Rank #1.
General Motors (GM - Free Report) : Cruise, the self-driving car start-up, majority-owned by General Motors, recently deployed fully driverless cars in San Francisco. This will help Cruise to penetrate its way toward launching a robotic taxi service that would compete against Uber and Lyft in the hub of the leading ride-hailing services.
Earlier this year, General Motors unveiled its Origin driverless electric shuttle, which has no steering wheel, pedals or other manual controls. The company has been pushing for a first-mover advantage in autonomous vehicle services and has operated a limited autonomous vehicle ride-hailing fleet with a human attendant in Phoenix since 2018. The most recent round of fundraising for Cruise valued the company at $19 billion.
The company currently sports a Zacks Rank #1.
Ford (F - Free Report) : Ford plans to roll out its self-driving commercial business in 2022 with vehicles based on the Ford Escape Hybrid crossover. The vehicles are based on the automaker’s fourth-generation autonomous technology in partnership with Argo AI, a Pittsburgh-based autonomous vehicle start-up.
Ford and German automaker Volkswagen AG (VWAGY - Free Report) had split an 80% majority stake in Argo AI earlier this year. Ford initially planned to launch the commercial self-driving vehicle business in 2021 but delayed it until 2022 amid the pandemic-induced crisis. Ford has committed $4 billion to autonomous vehicle development through 2023, including a $1-billion investment in Argo AI.The company currently carries a Zacks Rank #2 (Buy).
Alphabet (GOOGL - Free Report) -owned self-driving car pioneer Waymo is the leader of AV technology, being the first company to roll out Level 5 fully AV. Although Waymo is still at its budding stage, the company is valued at $30 billion already. Waymo, which began its autonomous mobility journey in 2009, has logged 20 million test miles on public roads in 25 different cities.
In 2018, the company launched a limited self-driving taxi service in Phoenix along with a driver for safety purposes. This fall, the company garnered the limelight as it kicked off a fully autonomous car service without a driver in Phoenix. The service was made available to members of Waymo One, the company’s premium membership, on Oct 8, and is now available to anyone in Chandler, southeast Tempe, and southwest Mesa through Waymo’s app.
This October, Waymo and Daimler Trucks partnered to create an autonomous version of the Freightliner Cascadia truck. Recently, Waymo inked a deal with the Transportation Research Center to build a full mock-city to test its next generation of autonomous cars and trucks.
Waymo’s parent company Alphabet currently carries a Zacks Rank of 3 (Hold).
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?
These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold.
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