4 Most-Disruptive Trends Powering Autonomous Vehicles

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“Our industry is going to change more deeply in the coming 10 years than in the 100 years before.”

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Matthias Müller, the former CEO of Volkswagen, spoke those words in May 2017. And if he’s smart, he’s worried about all the change coming to the auto industry.

Just behind Toyota, Volkswagen is the world’s second largest car maker. Its industry is facing one of the most powerful and most varied set of disruptions in the history of capitalism.

During this time of epic change, huge, seemingly-dominant companies will go out of business very quickly. Longstanding billion-dollar brands will become worthless virtually overnight. New companies will spring up in their place and make their shareholders very wealthy.

If you understand what’s about to happen, you could make a tremendous amount of money in a short time. What’s coming is going to be that powerful and that fast.

Think of the auto industry like a large dining table that took decades and hundreds of billions of dollars to set up. The tablecloth is about to get yanked out.

Let me explain the “perfect storm” of change coming to one of the biggest industries on the planet. While this perfect storm is terrifying to some, I hope you’ll see it as a huge opportunity.

The 4 Horsemen of the Auto Industry Apocalypse

If the old auto industry is about to get demolished, here are the four horsemen of its apocalypse … the four major disruptive changes hitting the industry:

Disruptive Change #1: The decline of the internal combustion engine.

The 20th century was the age of oil … thanks in large part to the internal combustion engine. Some of the world’s largest industries have been created to extract fossil fuels, refine them, and burn them while getting from point A to point B.

But over the past decade, electric vehicle technology has advanced by leaps and bounds. Companies like Tesla (NASDAQ:TSLA) and Toyota (NYSE:TM) have invested billions of dollars in the pursuit of increasing the range and reliability of electric vehicles.

In addition to technology improvements, electric vehicles have governments on their side. Thanks to environmental concerns, governments in China and Europe are moving to phase out internal combustion engines and phase in electric vehicles. Bloomberg estimates that at least 50% of cars sold by 2040 will be electric.

What’s coming is a profound shift in how the automotive industry works. I don’t believe we’ll see the “death of oil” anytime in the next decade. But we will see a continuing shift toward electric vehicles. This means I’d much rather own the best companies involved in electric vehicle battery technology and materials for potential 10X gains over the best oil companies.

Disruptive Change #2: The rise of ride sharing services.

Thanks to ride sharing services like Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT), the concept of “car ownership” has radically changed in the minds of many consumers. Instead of going through all the expense and time associated with owning a car, many people — especially the under 40 crowd — would rather just “Uber” to get where they need to go.

We’re talking tens of millions of consumers who don’t care about American “car culture.” This is a radical shift from days past.

I think we’re already seeing the impact on sales. U.S. total vehicle sales rebounded strongly coming out of the Great Recession, exceeding 18 million per month in mid-2015. But except for a couple of spikes since then, sales have largely plateaued and even trended down.

Disruptive Change #3: The rise of autonomous vehicles.

Just like electric vehicle technology, autonomous vehicle technology has grown by leaps and bounds over the past decade.

Self-driving cars have gone from a science fiction fantasy to actually operating in the real world. Waymo — owned by Google parent Alphabet — is successfully testing self-driving taxis in Phoenix, Arizona. Tesla has invested enormous amounts of money into making its vehicles autonomous.

While estimates of autonomous vehicle adoption over the next 20 years are all over the place, it’s safe to say this technology is extremely disruptive to the “old” transportation industry. Autonomous vehicle technology leaders like Nvidia (NASDAQ:NVDA) stand to benefit.

Disruptive Change #4: The growing importance of “tech” in cars.

The “in car” experience of the future is going to be drastically different than the “in car” experience of the 1990s.

From entertainment systems to navigational systems to voice-activated controls to autonomous driving features, the role that software-driven high technology plays in cars is growing every year.

For example, Alphabet (NASDAQ:GOOGL) leads the world in self-driving car patents. The technology behind digital assistants — which are operated with voice commands — is dominated by big tech companies like Amazon (NASDAQ:AMZN) and Alphabet.

These tech giants will wield increasing amounts of power in the transportation industry.

Summing Up

For generations, the auto industry didn’t change much. Car makers sold cars with internal combustion engines. There were no ride sharing services like Uber. And the thought of a self-driving car was science fiction.

Today, most drivers fill up their cars the same way they did a century ago. The photo below is not much different than today.

But now, everything automotive is about to radically change. Transportation will change more in the next 10 years than it has in the last 100 years.

Thanks to extraordinary advances in technology, an epic period of change is coming for the trillion-dollar auto industry.

If any of today’s giants are unable to navigate the coming perfect storm of change, they’ll quickly go out of business.

Powerful new car makers, component makers, and software makers will take their market share and deliver massive rewards to shareholders. I’m talking on the order of 2X, 3X, 5X and even 10X your money.

As with any major business change, I hope you see it as a huge opportunity.

Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of Investment Opportunities and Early Stage Investor. He has dedicated his career to getting investors into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA), +1,044% in Tesla (TSLA), +611% in Liquefied Natural Gas Limited (LNGLY), +324% in Bitcoin Services (BTSC), just to name a few. If you’re interested in making triple-digit gains from the world’s biggest investment trends BEFORE anyone else, click here to learn more about Matt McCall and his investments strategy today.


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