It's becoming increasingly common to see driverless cars on the road. The technology isn't perfect yet, but there are plenty of companies working on getting it there. No One at the Wheel: Driverless Cars and the Road of the Future author Samuel Schwartz and Wedbush Senior Equity Analyst Dan Ives share their thoughts on investing in the autonomous vehicle space.
Schwartz highlights Alphabet's Waymo (GOOGL, GOOG) as being a company in the lead. Schwartz also points to General Motors' Cruise (GM), and Tesla (TSLA). However, Schwartz notes that one of the big problems for the industry is the "lack of sharing of information and data," which means "we don't know enough about how these vehicles are performing." Schwartz estimates that it could take another 20 years for driverless vehicles to handle dirt roads or mountain roads, given that these vehicles can't yet do everything that one with a driver can.
Ives compares the rise of driverless vehicles to what we're seeing in AI in that there will be "derivative plays." Ives makes the case for Uber Technologies (UBER) as a potential play because he believes "not just one of five, but potentially two of every five Ubers, end of decade, could be self-driving, autonomous." Ives echoes Schwartz's comments about GM's Cruise unit, saying it is a "significantly undervalues asset" at the automaker.
For more from this episode of NEXT:
Self-Driving Cars: The Road to Autonomy (full episode)
- What are, in your mind, some of the big companies that play in this space that people should be on the lookout for?
SAMUEL SCHWARTZ: Yeah, the big companies-- of course, Waymo is probably in the lead at the moment. And GM Cruise is certainly there. As Dan mentioned, Tesla, of course.
But one of the problems with a lot of this industry is the lack of sharing of information and data. And so we really don't know enough about how these vehicles are performing.
And while I don't disagree that perhaps one out of five by the end of the decade will have some degree of autonomy-- and many of them, in fact, have some degree of autonomy right now, with Super Cruise and others. I just think it's going to be a little tougher for the average American to take a vehicle, perhaps without a steering wheel, when in fact, it can't do everything that a driver can do.
I think we're probably 20 years away from being able to go on dirt roads, going on mountain roads, and other kinds of things. But for everyday driving, I think by the end of the decade, you're going to see quite a few. And one out of five is a pretty good estimate on the road.
- Yeah, we have different levels of autonomy here, from things, like you said, Super Cruise to potential of robotaxis and things like that. So, Dan, putting your investor hat on, what do you think are some of the big plays here? Is it the automakers? Or is it even chip makers, like NVIDIA and companies like that?
DAN IVES: Well, I think it's similar to what we've seen with AI. I mean, there's derivative plays from the chip perspective in terms of when you look at that ecosystem from a self-driving autonomous and who plays there. That's throughout Asia as well as the US, NVIDIA and others. They are going to be going after this market.
But then ultimately, I think the first derivative, it's going to be the OEMs. I think that's where you look at Tesla. I think ultimately, Uber is actually a tangential play because we believe, not just one of five, potentially two of every five Ubers in the decade could be self-driving autonomous, basically no driver. And then you're going to look at the commercial side in terms of some of these commercial players.
And I think Sam brings up GM. I do think that's really important. I think Cruise is a significantly undervalued asset at GM. And for anyone that's done any sort of test drives there in San Francisco, it's eye-popping in terms of that technology.