Say you had a challenge car budget and you really wanted to invest in driverless car tech. Which company's stock (or group of companies, or mutual fund/etf) would you buy and why? What is your strategy (buy and hold for 10+ years, buy and sell after x happens, etc)?
Do you buy the software company or the hardware company (or the sales, logistics, dealership, etc company)? Do you buy 5-10 teensy startups and hope one hits the big-time? Do you buy large established companies who are dabbling?
do you buy the financeers? (banks, venture capitalists, etc) who are investing heavily in the sector?
It seems like a mess from a prospective investors point of view. There are companies large and small across 3 different business sectors that are each developing the tech, while simultaneously partnering with their competition.
Google's Waymo seems to be the leading software company as their fleet is currently functioning on actual roads. They have tons of capital, and their maps should prove very useful.
Id say GM is probably the leading car manufacturer, as they've done trials using modified Bolts on real city streets. GM of course has plenty of experience with manufacturing and supply chain to actually build these things, and they have a vast dealer network that could be used as central hubs for these vehicles if used in a ride sharing or subscription capacity.
The final group of companies are the fancy taxis like Uber, Lyft and NuTonomy. Their long term prospects for profitability drastically increase if they can bring automation to their fleets. Uber has more cash, But seems highly dysfunctional. Lyft has more backing from industry giants.
Things get complicated when you realize that GM has a sizeable investment in Lyft, and so does Google, but they're not exactly equal partners. Google currently gets their vehicles from FCA though, so that adds another wrinkle.
If you want a long term investment, I'd stick with Google or GM. They're probably the leaders in their respective segments, and possess critical assets for making automation a real thing in large scale. The fact that they've invested in ride sharing companies might act as a hedge if those companies are able to make this stuff work sooner. And, worst case scenario you end up with stock in solid companies that should still be able to profit even without the automation.
I bet the people who owned GM stock prior to 2008 thought they had invested in a solid company too.
if I was going to put cash up I would put it on a O.E manufacturer. Reason being they know how to build cars ( see Tesla lack of production and quality issues) and have people that know how to integrate new tech and the cash to buy technology if needed. Don't forget their dealer network, service shop, and parts supply chain. Most customers do not want to wait for service or parts.
I would save my money for a different segment.
There is merit in the major driver assistance tech. A lot of merit.
But some of the ideas around autonomous cars are not valid to me. Especially the idea that car demand will go down. Fleets of Uber and Lyft cars are not going to happen.
Buick. Even when there is some blue hair behind the wheel, I'm reasonably sure no one is behind the wheel.
Appleseed said:Buick. Even when there is some blue hair behind the wheel, I'm reasonably sure no one is behind the wheel.
I just invested my life savings in Buick based on your advice. I'll let you know how it goes.
alfadriver said:I would save my money for a different segment.
There is merit in the major driver assistance tech. A lot of merit.
But some of the ideas around autonomous cars are not valid to me. Especially the idea that car demand will go down. Fleets of Uber and Lyft cars are not going to happen.
I kinda agree with Alfa. It's too early to pick the winners.
I think, however, there WILL be fleets of Uber and Lyft cars, but they won't be manufacturerd or owned by Uber and Lyft. They will be manufactured by multiple companies (like GM, Volvo, and even Tesla), and they will be micro fleets owned by independent contractors.
The impetus to maintain a system of independent contractors is too strong. Uber should never enter the ownership arena- it will put them in direct competition with their own customers. They should use their resources to help some of their best operators become owners of small fleets.
Betting on the winners right niw is like trying to pick VHS or Betamax in 1977. Too many different methods and approaches.
The real win will be when someone recognizes that the systems need to integrate into one huge transportation system. They all have to talk with each other. It doesn't matter who builds the best system, what matters is that the chosen format is universal so ALL players can participate.
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