Some of the emerging tech in the autonomous technology market is truly exciting, like something out of Blade Runner or the Jetsons (yes, there are flying cars, but we’ll save that for another issue). And the growth potential is substantial, with the self-driving vehicles market projected to balloon to $802 billion by the middle of this decade alone. And it’s not just personal use vehicles, we’re seeing an explosion in demand for self-driving busses and so-called robo-taxis, especially with growing calls for a reduction in the amount of single-person use vehicles on the road. It seems that, globally, there’s a call for more public transportation and ride-sharing, and self-driving vehicles are coming to the rescue.

Multiple Routes To The Destination

Let’s take a look at what’s considered an autonomous (self-driving) vehicle… there are levels to this.

Autonomous driving is defined by the Society of Automotive Engineers (SAE) on a six-point scale and describes the extent to which the vehicle can take over driving tasks. On one end of the spectrum, you have Level 0, a car with no driver aids whatsoever, and on the other, a Level 5, which has no steering wheel, pedals, or any other mechanism with which a human driver could control the vehicle.

What a lot of people may not realize is that we’ve had some level of automation in cars for decades, and you’ve probably only ever driven a true Level 0 car if you are of a certain age (conjuring images of crank cars… just kidding, that’s too far back). Older cars didn’t have any sort of driving automation technology at all to assist drivers. Level 1 vehicles have some of this technology, including cruise control, lane departure warnings, and emergency braking functions. They help with safety and convenience, but don’t replace human drivers in any way.

Level 2 combines assistance systems to enable the vehicle to independently perform some driving functions like parking, or getting through traffic, but the driver is still largely in control. Level 3 is called conditional automation, and this is where the car can actually start to drive itself a bit. A person is free to do other things (maybe you’ve seen the videos of Tesla drivers asleep on the highway). Drivers still need to navigate the hard stuff, but the car can do plenty alone at this stage.

Level 4 is high automation, and here we see cars able to handle an entire trip (mostly) without human intervention. The car is equipped for human control, but the car is ultimately doing the heavy lifting. Finally, we have Level 5, where stuff gets wild… this is full automation. In this case, riders don’t even need a license, because they become the passenger and there aren’t any pedals or a steering wheel. No human input necessary, period… all the person does is tell the car where they want to go, and they are free to enjoy the ride.

Get Ready For Science Fiction

When we think of self-driving cars, they may seem like some far-off, futuristic tech… or like only the really wealthy will get to enjoy them anytime soon. Remember the movie Judge Dread with Sandra Bullock and Sylvester Stallone? The writers imagined a time in the year 2102 where cars drove themselves and took passengers out to dinner at the only restaurant available, Taco Bell (vegan only, of course). Well that future is now, and we don’t have to wait 100 years… it’s happening.

Speaking of movies, be sure you check out this week’s Crypto Corner, where we cover how blockchain is disrupting the movie industry!

If you’re familiar with this space at all, you are probably familiar with Waymo (Google’s self-driving car project launched in 2009). That project has come full-circle and we’re now living in a time where they have made the robo-taxi a real-life thing. It’s called the Waymo One and it’s a ride-hailing service that offers a fully automated ride experience. You simply call the car (like you would an Uber), and it takes you where you need to go. Wow!

The vehicle is Chrysler Pacifica-based and outfitted with 19 cameras, one long-range and one mid-range LiDAR sensor, four short-range LiDAR sensors, and six radar sensors. The data from these high-tech cameras, radars, and ultrasonic sensors is pulled together into a stream with high-definition map data and processed by a computer, acting as the vehicle’s “eyes and ears”. Currently, the service is limited to customers in a few areas in Arizona, but will expand, and is testing rides in San Francisco.

Toyota Versus Tesla

Tesla’s Elon Musk has announced his plans to manufacture and deploy self-driving taxis on a massive scale. He wants to help with the transition to sustainable energy on a scale that will truly have an impact. Recently, at the opening of a factory in Texas, when talking about the project, he stated that Tesla would “… move to truly massive scale — scale that no company has ever achieved in the history of humanity.”

Toyota has big plans in the space as well. Its subsidiary Woven Planet will be using low-cost cameras, artificial intelligence, LiDAR, and radar to collect data and train its self-driving fleet through a Neural Network. The company recently acquired Level 5, a division of Lyft, dedicated to self-driving technology and has taken over Carmera Inc, an AI company based in the U.S. that specializes in next-generation road intelligence… all this in an effort to position themselves in a spot of leadership in the self-driving vehicles game.

And don’t count mighty Apple out.

The Stocks

We’ve seen some impressive companies IPO in this space recently, such as Rivian (RIVN) at $77 billion in November (the company is an EV startup that rolled out their first all-electric pickup truck in 2021) and Lucid Motors (LCID), an electric vehicle manufacturer headquartered in New York offering semi-autonomous technologies, via a SPAC merger. For this year, we’re expecting a couple of possible IPOs, with the key companies we’ll be watching being Argo AI and Intel’s Mobileye.

Argo AI, an autonomous driving technology company headquartered in Pittsburgh, is working to develop self-driving systems that would completely remove drivers from behind the wheel and is engaging in private fundraising in order to pursue an IPO later this year. The company, which is testing prototypes in six cities in the U.S. (and soon Europe), has partnered with Ford and Volkswagen Group. Both companies plan to launch services using Argo AI technology in the near future. Argo AI’s most recent valuation was $7 billion.

Intel will list shares of its self-driving-car unit Mobileye, which develops autonomous driving technologies and driver-assistance systems, mid-year 2022. The company owns 100% of shares and will retain majority ownership following the completion of the IPO. In its filings with the U.S. Securities and Exchange Commission, Intel indicated that it hasn’t determined how many shares will be offered or how much they will cost, the IPO will come after the completion of the SEC review process. I love Mobileye. We made money on it before Intel bought it.

Whether you’re a science fiction fan or not, it’s an exciting time to be an investor in this space. It’s easy to imagine the transformation that self-driving vehicles will have on our society and how different things could look, and how the public will get around, in just a few years. Stick with us as we keep exploring the possibilities in future newsletter and keep watching to find out whether we recommend either of these innovative companies for my Buy List later this year.