The automotive industry might be marching towards electrification, but further down the road lies the prospect of driverless cars. Development in the field is moving quickly as car manufacturers, technology firms and governments look to find more efficient, safe and sustainable ways of getting people from A to B.
This makes it a sector with plenty of opportunity for investors, combining Silicon Valley behemoths, legacy automobile brands and emerging start-ups all working towards a seismic change in transport.
Driverless cars may feel like science fiction, but autonomous technology is already baked into today’s vehicles as standard. Many have driver-assist functions that can automatically brake in an emergency to avoid collisions and aid in manoeuvres like parallel parking.
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Moreover, cars with level four autonomy (that’s vehicles operating by themselves with the option for human override) are already on our streets. Google’s self-driving subsidiary Waymo recently tested Chrysler Pacifica minivans in Arizona, while last October saw the London boroughs of Croydon and Bromley host FiveAI driverless cars. UK tech firm Oxbotica also fitted Ford Mondeos with autonomous tech for trials around Stratford’s Olympic Park in late 2019.
The holy grail of autonomous cars
Level five autonomy, requiring no driver input at all, has been described as the holy grail of driverless vehicles. Tesla founder Elon Musk recently told attendees at the World Artificial Intelligence Conference that the company is "very close" to achieving the basic requirements of level five. All new Tesla cars come with a level two Autopilot system – meaning a person must remain in the driving seat with hands on the wheel – but Musk revealed that future software updates could bring level five autonomy without the need for new hardware.
"I remain confident that we will have the basic functionality for level five autonomy complete this year," Musk said. "There are no fundamental challenges remaining. There are many small problems."
These small problems will need to be ironed out before we see the widespread adoption of driverless cars. Safety is paramount, and one of the key factors in the development of autonomous vehicles. It’s estimated that the driverless car industry could help save some of the 1.25 million lives lost each year in road traffic accidents. This would make them an innovation that not only transforms society, but one that could drastically cut road fatalities.
Leading GPU manufacturer Nvidia has already developed a 'Safety Force Field' to increase trust in self-driving cars. It’s a powerful safety feature that collects and analyses data from a moving vehicle’s environment and determines a set of actions to protect the car as well as others on the road. Other large tech companies are making moves in the sector, too. Earlier this year Qualcomm announced a new chip system called Snapdragon Ride, which will give cars autonomous capabilities and could be included in production as early as 2023. Rumours of an Apple 'iCar', meanwhile, have swirled for years, with car designers and engineers being recruited and talk of a former military base outside Silicon Valley co-opted as a test track.
Revolutionising transport
Driverless vehicles will also transform taxis, public transport and delivery services. Uber has its own self-driving car division, the Advanced Technologies Group, and has brought a renewed focus on safety after a fatal crash involving one of its vehicles in 2018. Toyota, the world’s second-largest car maker, has also made a significant investment in trialling RoboCar MiniVans and had planned to use them at the 2020 Tokyo Olympics.
Established auto manufacturers are currently making progress in the field of autonomous delivery. Last mile urban logistics could be transformed by vehicles like the EZ-PRO concept from Renault. This vehicle consists of driverless electric pods that form a 'train' behind a lead vehicle. Each pod can be programmed to reach a specific destination, breaking away to make a delivery then reconnecting with the lead vehicle when the job is complete.
The driverless cars field is evolving rapidly, sitting at the intersection of the automotive and technology industries. If you’re looking for a straightforward way to take an investing position in this cutting-edge sector, then CMC Markets offers a route in through its share baskets. These offer a way for investors to trade cost-effectively in a wide range of themes, while diversifying their exposure. CMC’s driverless cars basket includes some of the biggest names in the sector – from auto companies Tesla, Ford and General Motors to tech firms Apple, Nvidia, Alphabet and Qualcomm.
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