Google popularized the idea of autonomous driving with its cute, self-driving mini-cars. But the first cars to come to market with true autonomous-driving capabilities will probably look a lot more like big luxury sedans. Source: Google.
This article was originally published on June 11, 2015. It was updated on Dec. 17, 2015.
Who will win big in the race to the self-driving car?
It's easy to point to companies like Google -- or rather, Alphabet (GOOGL 0.55%) (GOOG 0.74%) -- which has done a great deal to advance the idea of a car that can drive itself. But Alphabet is now expected to commercialize the Google self-driving effort as an autonomous car service, a competitor to Uber rather than to Detroit.
Cars that can drive themselves under any conditions are still several years away (at least). But even if a full-blown robot car is still a ways off, more and more self-driving features are coming to the cars we can already buy -- and the cars we'll be able to buy in a few years.
How best to invest in this trend? My Foolish colleague Sam Mattera recently named four companies that could be worth an investment as the self-driving future starts to unfold. Here are two more that I think will have a big role in the autonomous-driving future. Both are well-run companies in good financial shape -- and both are worth watching.
The first autonomous car to hit the market wasn't a Tesla
Nope, Tesla Motors' (TSLA 12.06%) "Autopilot" wasn't the first self-driving system to hit the market.
So who was first? Mercedes-Benz.
Some versions of the Mercedes-Benz S-Class have been available with the company's Traffic Jam Assist feature since 2014. Like Tesla's Autopilot, it's pretty limited: In certain situations (think stop-and-go highway traffic at rush hour) Traffic Jam Assist will enable the car to accelerate, brake, and steer itself, up to speeds of 37 miles per hour.
The new-for-2014 Mercedes-Benz S-Class was the first car to bring limited autonomous-driving ability to market. A slew of competitors are set to follow. Source: Mercedes-Benz.
The system, part of a larger suite of high-tech "assisted driving" features called Intelligent Drive, is admittedly very limited. But it's also very significant: It was the first system to come to market that allowed drivers to take their hands off of the steering wheel while the car was under way.
Most of Mercedes-Benz's luxury-car rivals are planning to bring limited self-driving systems to market over the next couple of years. But Mercedes' system was first (and Mercedes will always be able to say that it was first). That's because Mercedes' parent company, Daimler (MBGA.F -0.04%), has been making big investments in automated-driving technology for years.
Expect Daimler to be a leader in this space for years to come. And not just with luxury sedans: Daimler also makes a full range of commercial trucks, including Freightliner tractor-trailers.
That's significant. While a self-driving car service has some obvious appeal, especially to city-dwellers, self-driving cars themselves may turn out to be a tough sell to consumers, at least at first. But reliable, efficient, safe self-driving trucks should be an easy sell to the businesses that rely on timely deliveries of goods and freight.
If you're looking for a way to invest in the future of autonomous cars and trucks, take a closer look at Daimler. Obviously, it's not a "pure play" -- it's an investment in much more than autonomous-driving technology. But CEO Dieter Zetsche has Daimler moving in the right direction on a number of fronts, including advanced autonomous driving technology. Keep a close eye on this one.
This company will have a hand in many of the first autonomous-driving vehicles
Silicon Valley and the big automakers aren't the only ones pushing autonomous-driving technology forward. A couple of big auto-industry suppliers are also making significant progress with the technology. Sam mentioned Delphi (DLPH), which recently sent a car equipped with its self-driving innovation on a coast-to-coast journey that the car (mostly) completed on its own.
Delphi is already a big player in self-driving technology, and it's definitely worth a closer look. But it isn't the only big supplier that has geared up to help its clients into the autonomous-driving future. Sweden's Autoliv (ALV -0.04%) is the world's largest supplier of automotive safety systems, a category that includes everything from airbags to advanced night-vision systems.
Autoliv is a big company (revenues of $9.2 billion in 2014) that does business with all of the world's major automakers. It has made very big investments in a slew of what it calls "active safety systems," the technologies that will be key parts of the autonomous cars of the near future.
Already, Autoliv supplies assisted-driving features like adaptive cruise control (which automatically keeps your car a set distance away from the car in front of it on the highway) and forward collision braking (which will stop the car if it detects an obstacle to which the driver isn't responding).
Those aren't quite self-driving technologies, but they incorporate things like cameras and radar and decision-making logic -- and they, along with other "assisted driving features" like road-sign detection and recognition systems, will be key parts of the first fully self-driving cars.
And where will the automakers that aren't leaders in developing these technologies on their own go to get them? To Autoliv, which is well-positioned to profit handsomely as the autonomous-driving future continues to unfold.
