Today, I’m going to reveal three ways to profit off the self-driving car megatrend, which is gaining momentum.
The technology behind this trend has been ready for years. But I believe this is the year it’s about to finally be unleashed. And it’s opening up a huge moneymaking opportunity for everyday investors.
With COVID and post-election lawsuits dominating the news, you won’t read much about this in the mainstream media. But this industry quietly hit two major milestones in December.
COVID Hit The Fast-Forward Button
I’ve written before about how COVID has basically hit the “fast forward” button on a lot of important industries from solar to 5G to online delivery. It pulled all these trends that were likely to play out in 2025/2030 to right now.
And I’m not just talking about opportunities in the stock market. Just think about how quickly the new COVID vaccines debuted.
Previously, the fastest vaccine to go from development to deployment was for the mumps in the 1960s. It took about four years. COVID vaccines came out in less than 12 months. That’s the fastest ever, and I couldn’t be happier.
The world together is focused on solving one single problem for essentially the first time in history. Even during WWII there were two distinct sides, and not every country was involved. But today, all the richest countries and their smartest scientists raced to create vaccines to stop this virus once and for all.
Not only that, but think about the FDA approval. It usually takes a long time. It’s a rigorous process with lots of regulation. The mRNA technique that was used to develop the vaccines was written within a couple days. And before long was on the fast track to FDA approval. Normally these things take years and years.
COVID also hit the fast-forward button on self-driving cars. Let me explain.
This is the Year Self-Driving Cars Go Mainstream
I’ve been writing about this opportunity since 2018. In fact, I published an article that summer titled The End of the Steering Wheel. The technology has been ready for a while, as evidenced by Waymo, which is Google’s self-driving car arm.
Waymo is the front-runner in the self-driving race. It’s been ferrying paid passengers around Phoenix in its minivans for the past year. And often with no human “safety driver” standing by to grab the wheel if something goes wrong.
Its robotaxi service, Waymo One, topped 100,000 trips last year. Since 2019 its fully driverless vehicles drove 70,000 miles on US roads. But it just achieved its biggest milestone yet.
A few weeks ago, Waymo introduced a fully driverless ride-hailing service in Phoenix. Previously, the company only allowed a select few people to test it. Now, anyone in Phoenix can ride in a Waymo vehicle without a human safety driver in the front seat.
All you have to do is download their app, hail a self-driving car just like you would an Uber or Lyft ride, and it’ll show up in no time. Now, it’s important to note that Phoenix has flat, wide, well-maintained roads, and it’s sunny most of the year. There’s no black ice or mountainous terrain to contend with. Conditions are ideal for self-driving cars.
But there are at least 100 suburbs and metro areas around the U.S. that are similar to Phoenix in this way, and those are the places Waymo will launch next. Then it’s only a matter of time before we see self-driving cars driving around Manhattan, Chicago, San Francisco, you name it. And it’ll happen sooner than most people think.
Waymo did the heavy lifting. Its robotaxis are up and running in Phoenix, and now it can transfer that knowledge to dozens of other U.S. cities. By the end of 2021, I believe fully self-driving cars will be in at least 15 major US cities.
Amazon-owned Zoox unveiled its autonomous robotaxi on December 14. It’s a fully driverless vehicle built for ride hailing. Passengers face each other. It can’t be driven by a human — because there’s no steering wheel. It can go up to 75 mph and can run up to 16 hours on a single charge. Take a look at this thing.
These are incredible milestones. But most people didn’t hear about them with COVID and the election sucking all the air out of the room.
This Technology Is Finally Ready For 'Prime Time'
The only thing holding this massive disruption back is regulation. Back to the COVID vaccines example. They are the first mRNA vaccines approved for use. But mRNA isn’t new — it’s been around for years. It’s just that the FDA regulated it to the point where it couldn’t be used.
I think the same is going to happen to self-driving cars this year. The need for them is greater than ever. A lot of people don’t want to get in a car with a stranger who may have been exposed to COVID. They’d rather get in with a robot that can disinfect itself.
The question is: how can you start profiting off this trend? One of my greatest frustrations is that investors tend to get really excited about a tech trend in its early stages only to find there aren’t many direct ways to profit.
You can’t buy Waymo or Zoox, for example. You’d need to buy Google and Amazon, which own them. Obviously, those aren’t “pure plays” on the self-driving car trend.
But new, investable areas are now emerging in self-driving cars. For example, LIDAR is a cutting-edge technology which stands for “Light Detection and Ranging.”
In short, these tiny sensors that resemble a lawn sprinkler are affixed to the roof and front grill of the car. These sensors then send out roughly 160,000 pulses per second in all directions. These pulses can detect the smallest detail, like a leaf blowing in the wind.
Three Ways to Profit
There are three specific stocks on my radar. The most intriguing LIDAR play right now is InterPrivate Acquisition Corp. (IPV). It’s a “SPAC” that’s buying a company called Aeva.
Aeva makes 4D LIDAR sensors — and I believe it has the best technology. You can grab a piece of this company by buying the SPAC, ticker IPV.
Another is a Peter Thiel-backed company called Luminar Technologies (LAZR). And the last is Velodyne Lidar (VLDR).
These are all new developments in the last year or so that weren’t available before. If you’re interested in buying them, keep your investment small for now. These are volatile, “unproven” stocks with intriguing technologies. Not companies you want to bet big on quite yet.
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Stephen McBride is the editor of the RiskHedge Report, a popular and rapidly growing advisory dedicated to helping investors understand and profit from disruption.
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