With the integration of artificial intelligence and machine learning in advanced driver-assistance systems, robots are finally taking over wheels. While it’s definitely going to take years for autonomous vehicles (AVs) to go mainstream, significant progress is underway with auto and tech giants racing toward automated mobility.
Tesla’s TSLA much-awaited autopilot option, Full Self-Driving (FSD), is launching today. A fleet of fully-autonomous vehicles will be rolled out this week for a small number of careful and expert drivers for testing. A few days back, General Motors GM received green light to test AVs in San Francisco without a safety driver. About a week ago, Alphabet’s GOOGL well-performing self-driving unit — Waymo — opened the robotaxi service to the public in Phoenix, AZ. While Alphabet currently holds a Zacks Rank #2 (Buy), Tesla and General Motors presently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
One can’t deny that the coronavirus pandemic prompted us to reconsider the need for AVs, which are poised to emerge stronger. Per a report by Grand View Research, global AV demand is expected to reach 4.2 million units by 2030, at a CAGR of 63.1% between 2021 and 2030. Efforts undertaken to develop autonomous innovation today are likely to reap rewards in the future. Here’s a rundown of the key players in the driverless car race and their efforts toward achieving the goal.
Meet the Chief Contenders
Waymo: Alphabet-owned self-driving car company, Waymo — which started its autonomous mobility journey in 2009 — is still the one to beat. It enjoys a first-mover advantage in this space and is already operating on level 4 autonomy. Waymo vehicles have logged more than 20 million miles on public roads. It is developing driverless vehicle systems in collaboration with other auto companies. In 2018, the company received the permit to test driverless cars in California, the first such certification. Earlier this year, Waymo raised more than $3 billion in fresh capital from private equity groups and venture investors. The self-driving car company has around 600 vehicles in its fleet and makes its own sensors in-house. Just around a week back, the firm grabbed limelight as it launched fully driverless robotaxis sans human attendant in Phoenix.
Tesla: Tesla launched Autopilot, a suite of advanced driver-assistance system features, in October 2015. Autopilot Hardware 3.0 is the latest upgrade to Tesla’s FSD hardware. The company is using a range of ultrasonic sensors and camera-first approach for its robotaxi plans, integrating the vehicles with an eight-camera array, which gives a good 360-degree view of the vehicle. Tesla vehicles logged more than 1 billion miles driven on Autopilot as of November 2018. Per Electrek, Tesla cars have racked up another 2 billion miles with Autopilot activated, since November 2018. Tesla CEO Elon Musk claims that its in-house chip has faster data processing capacity than the ones it could buy off the shelf. Tesla stated that self-driving taxis will hit the road next year in some markets.The company plans to use Models S, X, 3 and Y as future robotaxis.
GM Cruise: General Motors acquired Cruise Automation in 2016 in a bid to launch driverless cars as part of its ride-sharing fleets. Cruise's investors include SoftBank Vision Fund, Honda Motor and T Rowe Price Group. A few years back, General Motors unveiled an autonomous Chevy Bolt electric vehicle (EV). Having its own EV gives the company an advantage over many other players. GM Cruise recently got a nod to test autonomous Chevy Bolt EVs in California without a backup driver. The company plans to test the vehicles before 2020-end. Early this year, General Motors — in collaboration with Honda — unveiled Cruise Origin, an electric AV designed for a ride sharing service.The Origin is set to enter production in the coming years at General Motors’ Factory Zero.
Argo AI: This driverless startup — having a valuation of around $7 billion — is backed by two automotive giants, Ford F and Volkswagen VWAGY.In June 2020,the German auto giant closed $2.6-billion investment in Argo AI, which involved $1 billion in cash and Argo taking over Volkswagen’s European self-driving unit, valued at $1.6 billion.Argo AI is the first AV firm to have commercial partners across both North America and Europe. Amid the coronavirus pandemic, Ford has delayed multi-city commercial rollout of robotaxis and driverless pods in the United States to 2022. With ample financial and engineering resources, Argo AI’s efforts to make automated driving a reality are likely to come to fruition.
Other Notable Mentions
In addition to Alphabet, many other tech giants have been intensifying competition in the AV space. Apple’s AAPL acquisition of a self-driving shuttle firm, Drive.ai, is in sync with its strong efforts toward bolstering expertise in neural networks, which play an important role in developing software for driverless vehicles. Amazon’s AMZN agreement to acquire driverless vehicle startup Zoox and investment in Aurora are likely to strengthen its competitive position in the autonomous mobility space. NVIDIA is working with more than 320 automakers, tier-one suppliers, automotive research institutions, HD mapping companies, and start-ups to develop as well as deploy artificial intelligence (AI) systems for self-driving vehicles.Intel’s $15.3-billion buyout of Mobileye helped it build chips for self-driving systems. The chip maker has been making efforts to double down on the AV business with the Moovit buyout. Qualcomm is riding on theautomotive platform, Snapdragon Ride, which enables automakers to transform their vehicles into self-driving cars using AI.
How can we miss China-based search engine giant Baidu while talking about AVs? With a fleet of more than 300 level 4 vehicles, Baidu — which uses the Apollo operating platform — is the leading AV developer in China, with robotaxi pilot operations in multiple cities across the country. Its autonomous driving tests have logged more than 3 million kilometers on roads across 23 cities in China. Around 10 days back, the company rolled out the Apollo Go Robotaxi service in Beijing. Passengers can hail a robotaxi for free via the Baidu Maps or Apollo Go apps. A security driver sits in the driver seat but doesn’t intervene. Notably, Velodyne Lidar recently inked a three-year sales agreement with Baidu for its Alpha Prime lidar sensors, which will further enhance vehicle capabilities.
Auto bigwigs including Nissan, Toyota, Daimler AG and BMW AG and Volvo are also ramping up efforts to gain market share in the autonomous driving space. Nissan’s Skyline sports sedan, unveiled last year, is the company’s first effort in automated driving. Toyota’s investment in Pony.ai to accelerate the development of robotaxis bodes well. German giants Daimler and BMW are leaving no stone unturned to capitalize on the prospects of automated driving. The arch rivals are collaborating with each other for more advanced fully autonomous driving Level 4 cars. Meanwhile, Daimler has also joined forces with Bosch in an effort to put driverless vehicles on road. The pilot test project in San Jose for an automated ride-hailing service is a testament to its efforts. BMW’s partnership with Intel, Mobileye and Fiat Chrysler to develop an autonomous car platform also remains noteworthy.
We believe Waymo, Tesla and General Motors are the frontrunners in the driverless space as of now.
Waymo is leading the race and has indeed been the first to hit many milestones in the AV industry that has witnessed many ups and downs. Currently, if you want to enjoy a truly driverless ride, you can do it only in Phoenix where Waymo is offering paid rides to the public. This places it well ahead of peers, as most of its competitors are still in the testing phase. Waymo also has by far the best self-driving disengagement rates.
Tesla is likely to have a cost advantage on the back of vertical integration with vehicle and battery production, along with in-house designed computer hardware and software development. Importantly, Tesla does not use lidar, a technology that almost every company focusing on driverless technology uses. Tesla can indeed be the low-cost leader in the robotaxi race.
General Motors is also not far behind. While GM Cruise may be the fifth to receive the driverless permit in California, it intends to be the first to test fully driverless cars in California. While Waymo has already launched the driverless ride hailing service in Phoenix, Cruise’s efforts are no less laudable as the streets of San Francisco are much more chaotic and difficult to navigate than Phoenix.
The race to AV supremacy will only get fiercer in the coming years. Enhanced neural networking capabilities and advancements in digital mapping and obstacle-recognition functionalities are expected to lead to safer navigation, reduction in accidents, as well as commuter comfort.
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