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 bring autonomous trucks to the Phoenix area. Initially, these autonomous trucks will start driving on freeways and later expand to other areas.
The latest move of the company gives a glimpse into the execution of the self-driving truck project.
With autonomous truck services, the company intends to explore opportunities beyond ride hailing services on the back of robust self-driving technology and artificial intelligence techniques.
Commencement of Testing
In August 2017, the company had begun testing self-driving trucks in Arizona. 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 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 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 Facebook, Inc. (FB - Free Report) , IAC/InterActiveCorp (IAC - Free Report) and AXT, Inc. (AXTI - 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 for Facebook, IAC/InterActiveCorp and AXT is currently projected at 20.2%, 20.5% and 15%, respectively.
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