Autonomous Vehicles: What No One Is Talking About [Part I]

Matthew Carr By Matthew Carr
Emerging Trends Strategist, The Oxford Club

Market Trends

Editor’s Note: Today, Emerging Trends Strategist Matthew Carr discusses a controversial topic: driverless cars.

According to one Energy & Resources Digest reader, “[It] sounds like 1984.”

But this is no dystopian novel.

What’s happening here could be a game changer for multiple industries… and investors who stay ahead of the trend.

Matthew recently discovered a company in the autonomous sector that is using technology the size of an Altoid to save 1.5 million lives every year. To learn more, click here now.

– Patrick Little, Managing Editor

We love our cars. They’ve helped us build the country we have today.

But there are changes on the horizon. And they’re going to affect our daily lives and our daily commutes. For investors, there’s potential to make a great deal of money.

No matter how you feel about them, autonomous cars are expected to be on the road in full force by 2021.

That may seem like a distant future, but it’s less than a handful of years away. And there are some major changes that autonomous cars will bring that no one is talking about…

First, let’s take a closer look at the companies building these vehicles.

Detroit City Still Rocks

Recently, Tesla (Nasdaq: TSLA) surpassed Ford (NYSE: F) in market cap.

This was huge news that the financial media spent a lot of time on.

Admittedly, Tesla delivered a record number of cars in the first quarter: a robust 25,000.

Meanwhile, Ford’s sales tumbled 7.2% – much larger than the 5% drop analysts were expecting.

Tesla is a Wall Street darling, and CEO Elon Musk is a daring businessman. The company is seen as being at the forefront of not only autonomous vehicles but several other technology frontiers.

All of Tesla’s vehicles are being built with autonomous driving hardware in place.

And other West Coast tech giants like Alphabet Inc. (Nasdaq: GOOGL) and Uber are betting on autonomous vehicles. Even Apple (Nasdaq: AAPL) is tinkering with its own car.

So there’s a perception that the West Coast – particularly Silicon Valley – is the hub of this new trend.

But the opposite is true.

Detroit is still king in the auto industry… even when it comes to autonomous driving.

A study by Navigant Research rated 18 companies working on self-driving technology in 10 different categories. Those ratings were compiled into a single score to separate the “Leaders” from the “Followers.” And the results may surprise you…

General Motors (NYSE: GM) and Ford are out in front.

Close behind them are Daimler and Renault-Nissan. And the laggards are Honda (NYSE: HMC), China’s Baidu (Nasdaq: BIDU), nuTonomy and Uber. Tesla is trailing in the “Contenders” category.

And the reason for this is quite simple: experience.

Ford’s been building cars for more than a century. It’s seen every trend and innovation in the industry. And it’s adapted to survive.

A Silicon Valley upstart can introduce new technology and design new components. But Ford, GM and other Detroit manufacturers actually have experience building vehicles.

So Silicon Valley is great at manufacturing ideas. But Detroit can take those ideas and manufacture something commercially viable.

This is important to remember… especially when we start talking about scale and widespread adoption.

Ford and GM can produce autonomous vehicles in the millions. Tesla is still selling only tens of thousands of cars per year.

But don’t make the mistake of thinking that this is the only opportunity for investors. The fact is that autonomous driving will have an enormous impact on the energy sector. Few people understand how big this impact is going to be.

When it comes to investing in autonomous vehicles, it helps to think a bit outside the box…

Next week, I’ll explain how the energy market is bracing for the impact of autonomous cars… and share the surprising opportunities that await investors.

Good investing,