Autonomous vehicles will become more prevalent in the coming decades, and technology companies and automakers are repositioning themselves to benefit from these machines and the $7 trillion passenger economy estimated to be created by autonomous vehicles by 2050. The transition from traditional vehicles to autonomous ones may seem like slow going now, but IHS Markit predicts that in 2040, 16% of all new vehicles sold will be fully autonomous.
Even if you don't know much about driverless vehicles, you've likely heard a bit about what the big players like Alphabet's Waymo and NVIDIA are doing, or a lot about Tesla's driver assistance system, Autopilot. But lots of companies are investing in autonomous technologies, including some you may have never heard about, and others that you'd be surprised to know are knee-deep in the tech.
Aptiv's singular focus on driverless tech
Some technology investors may not be familiar with Aptiv, considering that the company changed its name from Delphi Automotive late last year after spinning off its vehicle powertrain business into what's now called Delphi Technologies. The pre-spinoff Delphi was a longtime supplier of automotive parts and systems to automotive companies, but it decided that it would be better to break into two parts in order to allow one to focus on its autonomous vehicle technology. After an associated rebranding effort, Aptiv was born.
What's unique about Aptiv compared to nearly every other company in the autonomous vehicle market is that it's as close as you can get to a driverless car investment pure play. The company makes both hardware and software for advanced driver-assistance systems (ADAS) and completed 5,000 commercial autonomous rides in partnership with Lyft in Las Vegas back in August.
For investors looking for a company with a long track record of supplying advanced technology for automakers, Aptiv is worth consideration. The company may not get the same attention that Waymo and Tesla get, but it's making waves in the autonomous vehicle market all the same.
BlackBerry's second act
BlackBerry is, of course, most infamously known for its rise and fall in the smartphone market. But the company has worked hard to put that past behind it and forge ahead on a new path. Part of the company's new identity is wrapped up in a business that it's had for quite a while, called QNX.
QNX is a software platform that's been used in everything from automated assembly lines to trains, and BlackBerry is now using it to allow automakers to create safe and secure advanced driver-assistance systems. QNX in its various forms (including infotainment) is already used in 120 million vehicles worldwide, and the relationship QNX has with automakers could help the company's ADAS software platform gain momentum as the driverless vehicle market grows.
In the most recent quarter, BlackBerry's technology solutions segment, which includes QNX, grew revenue by 29% year over year to $49 million. And with the company's developing partnerships with automakers and technology companies, investors should take note of BlackBerry's moves in this expanding market.
Intel's big bet
Intel has long been searching for its next growth market and, at least in part, it believes it's found it in autonomous vehicles. The company bought an ADAS leader, Israel-based Mobileye, last year for $15.3 billion. Mobileye holds about 70% of the ADAS market and just completed a massive deal with a European automaker.
The company will supply the EyeQ5 chip that powers the autonomous vehicle driving system for 8 million new vehicles in 2021, which marks one of the largest deals the company has made to date. Mobileye is already testing about a hundred cars on public roads right now, it already supplies ADAS technology to 27 original equipment manufacturers, and its tech is in 313 car models.
Though the financial details of the latest Mobileye partnership weren't disclosed, the number of vehicles that will implement Intel's Mobileye EyeQ5 chip is a pretty big deal. Advanced driver-assistance systems are the building blocks of fully autonomous vehicles, and the latest deal proves that Intel's massive investment in Mobileye is paying off. Investors looking for an established tech company that has made a wise move into the autonomous vehicle space should give strong consideration to what Intel's doing right now.
What would-be investors need to know
Lots of companies will benefit from the autonomous vehicle market, and though these companies may not be on some investors' radar for self-driving tech, each is worth consideration.
I should point out that investors will need to be patient to see the self-driving gains reach the top and bottom lines of these companies. There are plenty of regulatory hurdles to overcome, and autonomous vehicles are still years away from becoming ubiquitous. But finding out which companies are making the best moves now can help you benefit from these companies once autonomous vehicles begin hitting the roads en masse.