The Autonomous Age: 3 Stocks to Buy for the Age of AV


  • Although American consumers won’t be able to buy autonomous vehicles anytime soon, these autonomous vehicle stocks are well-positioned to rise tremendously over the longer term. 
  • Aurora Innovation (AUR): AUR will generate a great deal of revenue by providing its autonomous-driving system to trucking companies. 
  • Xpeng (XPEV): Xpeng has deployed its impressive semi-autonomous driving system in many Chinese cities. 
  • Mercedes (MBGYY): Mercedes became the first firm to obtain a permit to obtain a permit to use a Level 3 autonomous driving system in a state. The system is slated to be sold to consumers this year. 
autonomous vehicle stocks - The Autonomous Age: 3 Stocks to Buy for the Age of AV

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Many pundits and investors are skeptical about the idea of autonomous vehicle stocks. And their doubts have some validity. After General Motors’ (NYSE:GM) mistakes with autonomous vehicles in San Francisco, individual consumers probably won’t be able to purchase self-driving automobiles for many years. It will take several more years for robotaxis to start spreading rapidly around the U.S.

Still, in America, autonomous delivery vehicles are going to start rapidly proliferating soon, while robotaxis are already becoming quite ubiquitous in China. Also noteworthy is that many consumers in both countries are obtaining vehicles with semi-autonomous capabilities. Here are three autonomous vehicle stocks to buy for investors who want to exploit these trends.

Aurora Innovation (AUR)

Closeup of mobile phone screen with logo lettering of cannabinoid company Aurora Cannabis (ACB, blurred marijuana leaf (focus on left part of letter R in center)
Source: Ralf Liebhold /

For years, Aurora Innovation (NASDAQ:AUR), working with major partners including FedEx (NYSE:FDX) and Uber’s (NYSE:UBER) Uber Freight, has successfully tested its autonomous Aurora Driver system on trucks in Texas. With “human safety drivers” behind the wheel, trucks utilizing Aurora’s software successfully made dozens of trips per week last year on multiple routes in Texas. Later this year, driverless, Aurora Driver-powered trucks should start traveling on the Dallas-Houston route, and AUR will begin charging for its software.

Given the tremendous shortage of truckers in the U.S., Aurora should be able to generate immense revenue and profits over the longer term, making it one of the best autonomous vehicle stocks.

Also noteworthy is that AUR recently “finalized the architecture and requirements of its Aurora Driver hardware.” Moreover, it is partnering with another firm, Continental, to develop and sell driverless trucks. These vehicles may be ready to hit highways in 2027, providing Aurora with a huge, new revenue stream.

Xpeng (XPEV)

XPeng (XPEV) car logo in Shanghai International Automobile Industry Exhibition
Source: THINK A /

On Dec. 29, China-based electric vehicle maker Xpeng (NYSE:XPEV) disclosed that it had deployed its XNGP Advanced Driver Assistance System in 27 additional Asian cities. By “early this year,” the high-tech ADAS will be deployed and “will be available in 200 cities across China,” Xpeng stated.

According to CNBC, XNGP “enables the car to carry out some driving functions automatically but requires a driver behind the wheel.” According to the automaker, the system includes autonomous lane changing expected to incorporate “overtaking and parking” and gains the equivalent of a year of human driving knowledge every quarter.

By 2026, in partnership with Volkswagen (OTC:VWAGY), XPEV is slated to launch EVs that feature its ADAS systems and Volkswagen’s designs.

Mercedes-Benz (MBGYY)

Mercedes b class electric vehicle
Source: Mercedes

Mercedes (OTC:MBGYY) tests vehicles with Level 3 autonomous-driving capabilities in Beijing, China. The company says that these vehicles utilize “highly autonomous driving technologies.”

Moreover, the system is already approved for use in California, as “the first Level 3 technology to be state-certified in the United States.”

With Level 3 ADAS, drivers can take their hands off the wheels and stop watching the road. According to The Wall Street Journal, Tesla’s (NASDAQ:TSLA) “Enhanced Autopilot” is “more capable” than the Mercedes system. However, Tesla’s offering is only Level 2 on the ADAS scale.

Mercedes’ offering should be available for $2,500 in 2024. I believe the product will generate significant revenue for the automaker while enabling it to sell many more vehicles.

On the date of publication, Larry Ramer held long positions in AUR and XPEV. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.

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