The driverless vehicle market has the potential for explosive growth over the next two decades driven by technological advancements, safety improvements, and commercial applications and could be worth trillions of dollars as soon as 2030. It’s likely to be a long bumpy road with challenges to gain public trust, navigate regulatory hurdles, and scale the business to generate profits.
Those challenges aren’t stopping a "who’s who" collection of companies from investing heavily in the space. Some companies investing heavily in driverless vehicles are traditional automakers such as General Motors, Toyota, and Volkswagen, as well as technology giants such as Alphabet’s Waymo, Amazon’s Zoox, and many others from both worlds.
While investing in this potentially lucrative opportunity is in its early stages, here is a list of seven different and intriguing driverless vehicle stocks to keep an eye on in the years ahead.
Cream of the crop
Let’s start this list off with companies that are essentially no-brainers when it comes to investing in driverless vehicles, before we step into some of the more "out of the box" ideas.
Alphabet’s (GOOG 0.04%) Waymo. Google’s parent company, Alphabet, operates Waymo, which is largely considered a leader in the driverless vehicle space offering a Level 4 robotaxi service in several U.S. cities. Alphabet checks a lot of boxes, including: immense financial backing, technological expertise, and a head start as Waymo has tested fully driverless vehicles on public roads as early as 2020.
Amazon’s (AMZN -0.57%) Zoox. Amazon acquired driverless vehicle startup Zoox and continues to develop fully autonomous and bidirectional electric vehicles (EVs) designed to thrive with urban ride-hailing services. Similar to Alphabet, Amazon has a significant resource advantage but it also has an intriguing tie-in for synergy considering its driverless products and technology could eventually be integrated with its last-mile logistics network.
Nvidia (NVDA 1.04%) has turned itself into a juggernaut business with an economic moat built around its leadership in graphics processing units (GPUs), hardware, software, and networking tools. Not only does its business expertise and innovation place it as a leader in the developing world of artificial intelligence, Morningstar predicts the company’s automotive business alone to expand at a 20% compound annual growth rate (CAGR) over the next decade to nearly $11 billion in 2035. Nvidia’s DRIVE platform is used by major automakers such as Mercedes-Benz, Volvo, Lucid, BYD, and Toyota, among others.
Key pieces to the puzzle
The next companies offer investors perhaps less of a full-driverless solution, but remain a key part of the puzzle.
Mobileye Global (MBLY -5.64%) should be looked at as a critical partner to development of robotaxis thanks to its Advanced Driver Assistance Systems (ADAS) and assorted driverless vehicle technologies. With solutions such as Supervision, Chauffeur, Drive, and EyeQ, the company can offer end-to-end driverless vehicle solutions that revolve around improving safety, productivity, and vehicle utilization. ZEEKR announced it would use Mobileye as its launch partner for ADAS, and Mobileye has also tallied design wins from automakers such as Porsche, among others.
Uber Technologies (UBER -2.14%) can also throw its hat into the driverless vehicle universe with its recent global robotaxi program designed exclusively for its namesake ride-hailing platform. Launching late in 2026 the program will combine Lucid’s vehicle architecture of its newly launched Gravity crossover EV with Nuro’s Nuro Driver Level 4 autonomy system, all backed by Uber’s vast global network and fleet management systems. The current plan calls for Uber to deploy 20,000 or more Lucid vehicles equipped with Nuro Driver over the next six years.
Image source: Uber Technologies.
Hesai Group (HSAI -1.08%) has its hands in many things driverless thanks to a leading position in lidar solutions and technology. Its products enable a long list of applications that include passenger and commercial vehicle ADAS, pure autonomous vehicles, robotics, and even last-mile delivery robots. The company’s expertise in lidar technology makes it a key partner for many automotive OEMs and the company noted a number of new design wins with 20 models from nine leading automakers, which will help drive the company’s top line higher in the near term.
Outside of the box idea
QuantumScape (QS -13.39%) may seem like an odd choice for this list, as the company is solely focused on developing the next generation of solid-state lithium-metal batteries for use in EVs. However, it’s highly likely that driverless vehicles will be electric as the platforms are simply much more advanced than historical internal combustion engine counterparts, and many of the EVs are being developed with the necessary electrical infrastructure for sensors, computers, powertrains, as well as offering lower running costs for high-mileage fleets. QuantumScape is attempting to revolutionize the battery industry with solid-state batteries -- which has yet to be achieved at commercial volumes -- that will significantly improve safety, range, charge time, and cost all in one package.
Remember the names
The driverless vehicle industry is poised to boom over the coming decades, and could radically transform transportation. The good news for investors is that this boom won’t have only one winner as many companies are positioned to thrive as the industry expands and navigates choppy waters of regulations and scaling the business. Savvy investors would be wise to keep their eye on a long list of companies developing technologies for driverless vehicles, and spread out investments to a number of smaller positions to offset some of the risk involved in investing in such a young and uncertain industry.
