In today’s Exponential Investor…

  • Staring out the window
  • Finally some passenger fun
  • Knowing the nuts and bolts of high-tech cars

It’s rare that I’m a passenger in the car.

If we’re heading somewhere as a family, typically I’ll drive. For a start I’ve got more driving experience than my wife, also she’s not a fan of driving my car anyway. Hers is a small hatchback, mine’s practically a boat.

Therefore when we’re all piled in somewhere, with gear, we take the bigger car, as my son puts it, “daddy’s car”, and I drive.

However, in the odd occasion that I am a passenger, such as when I’ve had a couple of drinks and it’s more responsible for my wife to drive, I find being a passenger incredibly boring.

As a passenger, you’re often not really needed to do anything else than sit there, participate in conversation, and generally stare out the window.

Same goes for the back seats. My son is big enough now that a long ride in the back seat requires more than just a few snacks. It requires snacks and entertainment.

The way in which the car is evolving as more than just a thing to get you from A to B is one of the big tech trends of this decade. My view is it’s going to open up some of the best investment plays as the car becomes the next great technology platform.

Everyone with something to do

Neither of our cars have inbuilt entertainment in the seats. That means when it’s time to head out, it’s the £7 tablet holder fixed into the headrest and the tablet inserted with a bunch of downloaded “Toonies” on Amazon Prime, Netflix or Disney+.

The thing is, it works. It works so magnificently that I feel jealous of my son. When I was a kid, there was nothing like that. It was either stare out the window, get into some kind of bickering fight with my brother, or get yelled at – or all of the above.

It wasn’t until we were a bit older that something like a Game Boy found its way into our back-seat lives. Even then it probably resulted in more fights and bickering because we only had one.

These days, even without inbuilt rear seat entertainment, as I say, it’s pretty easy (and relatively cheap) to get a £7 tablet holder from Amazon, a cheap (sub-£100) tablet and a bunch of downloaded shows or games to keep the back seat busy.

However, watching the keynote presentations this week at CES, it’s clear that the car is the next major platform for breakthrough technologies.

Mercedes-Benz debuted what’s effectively a giant, single screen that stretched from the driver, across the car and to the passenger. Its giant infotainment screen has all the necessary driver information in front of the driver where traditional dials would exist.

Then there’s a huge centre console screen for navigation, car controls and “immersive” applications. There’s also a third screen in front of the passenger, which enables everything from app access to navigation and even (in some markets they say) TV and streaming sites.

I wonder why it’s taken this long to put a screen in the dash in front of a passenger really. Either way, it’s coming, and considering its history of pioneering technology in cars, I would expect that most automakers will follow suit.

The next generation of cars will have more access to screens, “immersive” technologies and entertainment in car than any other device you’ll come into contact with. They will also be jam-packed with next-generation driver assistance and safety systems, as well as all the controls needed to keep the car functioning and moving where it’s supposed to.

In short, the car is going to be the most high-tech, powerful, connected and immersive device anyone will ever use.

It will be more high tech than all your computers, smartphones and smart devices put together. It will be more fun to be inside, more fun to travel in and more entertaining than any console you’ve got plugged in.

Not only that, expect the car to connect with all those devices anyway.

Sony Car?

There’s a reason why at 2020’s CES Sony debuted its own car. Yes, that’s right, Sony built a car for CES 2020. This year, it made mention of it again. It’s continuing to test it and develop it – primarily it seems for its ability to use its vision technology in safety systems, but I expect also internally to connect with everything from audio streaming services to gaming platforms, like PlayStation Online.

Imagine playing Call of Duty on a PlayStation 5, jumping in the passenger seat of the car, and then picking up exactly where you left off as you head off on a road trip holiday.

Meanwhile, underneath the hood (so to speak) some of the most sophisticated safety systems are constantly computing and processing data to ensure the complete safety of passengers and the environment around them.

To achieve all this, you need immense processing power, vision and sensor technology, communications and networking technology, immersive entertainment tech from screens to haptic feedback and then of course, comfort systems to ensure air purity and comfort within the vehicle.

To achieve all that you need millions of different components to bring it all together and to make it seamlessly work while ensuring the utmost safety.

When you dig into it all, you quickly find there’s a vast array of companies at the nuts and bolts level that develop this tech and ensure that it finds its way into the likes of Mercedes-Benz, Audi, Toyota and even possibly in the near future car makers new to this space like Nio, BYD, Fisker and some of the other “challenger” car companies.

You’ll hear those names in the mainstream. Companies talking about Mercedes-Benz’s amazing new screens and entertainment systems. That’s part of it, understanding where the tech ends up.

But to really see the investment angles, you need to understand the companies that are at the start of the process and bring it from concept to reality.

It’s companies that, as I say, you might not have heard of at the nuts and bolts level which help bring all this together.

Companies like Magna, ZF, Mobileye (as part of Intel), NXP Semiconductors and Continental AG are just some of the names that will bring the high-tech car of the future into the showrooms and on to our roads over the next few years.

I think it’s one of the most fascinating and exciting areas as we move to a world of truly high-tech cars.


Sam Volkering
Editor, Exponential Investor