Five Driverless Car Stocks to Buy in 2016

Five Driverless Car Stocks to Buy in 2016
By Jason Stutman | Wednesday, December 9, 2015
The emerging market of self-driving cars (SDCs) is now expected to become a $42 billion industry within less than a decade.

Today, we’re going to share five companies with you today that could see huge benefits from driverless tech.

While none of these companies are pure plays, they’re all investing heavily in self-driving R&D today and have the capital to back up their lofty ambitions.

In fact, each of these companies already has at least one vehicle on the road today with self-driving features. As leaders on the forefront of innovation, these firms should prove to be sound long-term bets, bucking the driverless trend.

Google Inc. (NASDAQ: GOOG)

Google self driving podWhile Google continues to make progress with its self-driving vehicles, it’s still too early to know exactly what the company’s plans are. What seems likely, though, is that unlike most major OEMs, Google wants to remove drivers altogether.

In terms of hardware and software IP, Google undoubtedly has the largest head start in this space. It’s been working on driverless cars since around 2006 and has already begun developing 100 cars — with no steering wheels — beginning testing in 2016.

While Google’s initial prototypes using the Toyota Prius worked out just fine, the company’s engineers have decided that allowing a human driver to take over in an emergency didn’t actually make its cars any safer.

In fact, the sudden switch from driverless to human-controlled driving turned out to make self-driving cars more dangerous, which is why Google is giving its computers full control.

By not giving drivers the option and making autonomy mandatory, Google is setting itself up for regulatory hurdles, but the company has so far proven impressive lobbying power when it comes to getting SDCs on the road.

If its plans succeed, Google could see drastically improved margins over its competitors by cutting out all operation expenses associated with manual, human driving.

Luxury car manufacturer Audi was the second company behind Google granted a license to test autonomous cars in Nevada.Audi AG (OTC: AUDVF)

At the 2014 Consumer Electronics Show, the company debuted its first self-driving vehicle, which could drive without human intervention at speeds up to 40 miles per hour. In 2015, Audi then developed an autonomous car that drove on a German racetrack, hitting speeds in excess of 140 mph.

Audi calls its driverless system “piloted driving” and considers it a “logical, evolutionary step in the development of the car.”

In addition to driving autonomously on open roads, Audi aims to equip its vehicles with self-parking systems that will allow you to exit early and let the car find parking on its own.

Audi executives predict Japan will be the first market to see such features in their cars, adding that “the traffic and parking situation in Japan is quite outstanding.”

Daimler AG (OTC: DDAIF)

Mercedes-Benz parent company Daimler AG has been on the forefront of innovation when it comes to driverless vehicles. The company envisions a future where cars are much more akin to living rooms and workspaces, where passengers can travel in comfort without a second thought.Mercedes f015

The self-driving car tagline being used by Mercedes right now is “Luxury in Motion.” Its F-015 prototype (shown to the right) is truly stunning and could prove to be exactly where the automotive industry is headed.

Like something out of a science fiction film, the F-015 seems more like a futuristic limousine than a car. With chairs that swivel towards the center of the vehicle, you wouldn’t even have to face the direction you’re traveling, but could instead spend time catching up on work or simply lounging with friends.
One of the more exciting stories surrounding self-driving cars comes from none other than Elon Musk’s Tesla Motors, a company that has already proven its ability to disrupt the automotive status quo.Tesla Motors Inc. (NASDAQ: TSLA)

In late 2015, Tesla showed the world it was capable of something pretty incredible: It could stream a software update to vehicles already on the road, giving them additional driverless features with its “Tesla Autopilot” feature.

At the mere push of a button, Model S cars could now automatically steer, change lanes, and park on their own. This was possible because the vehicles were already equipped with the appropriate hardware.

This includes ultrasonic sensors to detect objects around the perimeter of the car, a forward-facing camera to determine where the lanes are, forward-facing radar to see through rain, fog, and dust, and a GPS receiver for painting high-precision digital maps.

Caterpillar Inc. (NYSE: CAT) & Komatsu Limited (OTC: KMTUY)

While driverless cars that travelAutonomous Haul on public roads have hogged the headlines recently, many investors have been left out of the loop when it comes to one fully autonomous vehicle market that already exists.

This particular technology is arguably much more impressive than moving a two-door sedan — we’re talking about autonomous mining trucks weighing in at over half a million pounds.

In late 2015, mining giant Rio Tinto (NYSE: RIO) began running its first two autonomous iron ore mines using remotely operated trucks from an operations center 1,200 kilometers away.

In total, the company is operating 69 driverless trucks across its mines at Yandicoogina, Nammuldi, and Hope Downs 4. These trucks can run 24 hours a day, 365 days a year without a driver.

Leading the charge in driverless mining are U.S.-based Caterpillar Inc. and Japan-based Komatsu Limited. Both companies have their own respective strengths in the emerging driverless market, but Caterpillar’s fundamentals and 4.33% dividend payout make it the more attractive company to own.

Until next time,

JS Sig

Jason Stutman

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