In today’s Exponential Investor:

  • The future is autonomous
  • Why autonomous vehicles?
  • How to ride the autonomous vehicles trend

Imagine you could step into your car and not even think about driving.

You could relax and enjoy a coffee. Watch a film on your dashboard. Or even send a few emails whilst “driving” to work.

It sounds unheard of, and very unsafe. However, it could soon be a reality.

When you consider the frequency of car accidents, it’s probably best the driving is left to the vehicle, and not the human.

Road traffic accidents are the main cause of death for people aged 5-29 years. Around 1.3 million people die in road accidents around the world each year.

Autonomous vehicles are vehicles that operate without full driver control. Their main purpose is to combat driver fallibility and improve road safety. Autonomous vehicles have been on roads for years.

The hundreds of car models that have autopilot or parking assist are technically autonomous vehicles.

It’s the fully driverless vehicles which are yet to arrive.

Along with electric vehicles (EVs), the trend is transforming the automotive sector.

How does it work?

There are six stages to vehicle autonomy.

Level zero is complete driver control.

Level five is completely driverless, with the vehicle systems taking complete control of the vehicle at all times.

The amount of automation rises as you move up the scale.

This includes steering and braking controls, which are engaged by perception scanning technology called LiDAR.

Currently, the world finds itself at level three. In particular, Mercedes-Benz has achieved this.

With level three, vehicles have environmental detection capabilities, where the vehicle can briefly intervene. For example, accelerating past a slow-moving vehicle.

However, for most of the journey, driver control is required.

Achieving level four would be a huge breakthrough for the world.

It’s significant because it would see the vehicle systems conduct the majority of the driving.

Level four vehicles can operate in self-driving mode, although some driver intervention is still needed.

Currently, level four vehicles are restricted to commercial passenger routes.

For example, In August 2021, a UK government-backed programme called Project Endeavour saw 100 autonomous vehicle journeys offered to local residents.

The vehicles completed a set five-mile route around Greenwich, London, with two operators present throughout the journeys.

Self-driving vehicles are either electric or hybrid. Governments are currently phasing out petrol and diesel engine vehicles.

For example, the UK government is seeking to ban the sale of petrol and diesel-engine vehicles by 2030. Hybrids will be phased out by 2035.

By default, all autonomous vehicles will be electric in the near future.

This promises an integration of the electric vehicle (EV) trend and autonomous vehicle trend.

Benefits of autonomous vehicles

The main benefit of autonomous vehicles is the improved road safety they bring.

As noted, driver error is responsible for millions of deaths each year.

Driver error can include drunk driving, tiredness and speeding.

For example, early autonomous systems use sensors to scan the face of the driver. If the system detects sleepiness, the system takes control of the vehicle.

Autonomous systems mitigate driver error, improving road safety.

Another benefit is greater productivity. Autonomous vehicles will mean less time is needed to be spent driving. As a result, this frees up time to do other things, such as working and eating.

Finally, autonomous vehicles will improve mobility.

Those that don’t have a driving licence won’t need one to use a fully autonomous vehicle.

Is autonomous technology the future?

The irony with driverless vehicles is that they currently bring safety concerns.

The infancy of the technology poses uncertainties.

For instance, will the systems really have complete control of the vehicle, or will they falter and lead to a crash?

We’ve already seen this with Tesla. In 2018, a Tesla X model operating on “autopilot” crashed into a barrier in the United States, killing the driver.

As a result, autonomous vehicles are subject to rigorous and often unsuccessful trial periods.

This explains why the world has only achieved level three.

Nevertheless, the world is moving through the levels of autonomy.

For example, the government of Germany is seeking the introduction of level four autonomous vehicles to its roads next year.

Policymakers are also starting to include autonomous vehicles in their legislation.

In April 2022, the UK introduced changes to the Highway Code to include autonomous vehicles.

Under the terms, drivers must intervene when they are prompted to – for example, when approaching motorway exits.

The plans will also allow drivers to view content that is not linked to driving on built-in screen displays.

This includes films, although phone use is still prohibited.

There is huge promise from the autonomous vehicles trend.

However, it still needs to overcome regulatory hurdles before reaching mass adoption.

Who’s involved in autonomous vehicles?  

Many automotive giants are involved in the autonomous vehicles trend.

For example, Tesla’s (NASDAQ: TSLA) model S has an autopilot feature.

In particular, it includes “traffic aware cruise control” which matches the speed of your car to surrounding traffic.

It’s a level two autonomous vehicle.

Another company involved with autonomous vehicles is Alphabet Inc., (NASDAQ: GOOGL), the parent company of Google.

Alphabet operates an autonomous vehicle company called Waymo. In the United States, the company has been transporting passengers via “minivans” on commercial passenger ways since 2020.

The minivans are fully driverless.

There are specialist autonomous system developers too.

For example, Seeing Machines (LSE: SEE) creates optical processors and sensors which monitor driver behaviour. Its technology alerts the vehicle systems if anything abnormal is detected.

Another example is Luminar Technologies (NASDAQ: LAZR).

The company develops LiDAR technology for car manufacturers. LiDAR is sensory and perception technology that uses lasers.

Luminar has a commercial partnership with car manufacturer Volvo.

Further deals involving car manufacturers and companies providing autonomous vehicle technology are likely to be announced in the coming months.

Elliott Playle
Contributor, Exponential Investor