Nearly 100 years ago, a Czech physician and novelist by the name of Miles J. Breuer predicted the future. In his 1930 science fiction book Paradise and Iron, Breuer “invented” the concept of autonomous vehicles, offering up this idea of a mysterious paradise island where all the cars, trucks, and boats drove themselves.
Of course, over the next few decades, autonomous vehicles became commonplace in science fiction – from the KITT self-driving car in the 1980s TV series Knight Rider, to the Johnny Cab in Total Recall.
But the existence of self-driving technology was limited to the imaginations of novelists and screenwriters…
Until now.
Over the past decade, relentless innovation and multiple technological breakthroughs have set the stage for the exciting science fiction concept of self-driving vehicles to finally become a disruptive reality.
Semi-autonomous cars are already on the roads, conducting test drives in various cities throughout the world, including Phoenix, Detroit, Boston, Berlin, London, and many, many more.
Fully autonomous cars are not too far behind. Indeed, in China, fully autonomous vehicles without any driver in the car are already being tested.
It’s only a matter of time before these semi-autonomous and fully-autonomous cars go into production mode and end up in the garages of consumers all across the globe.
Worldwide, about 70 million new passenger cars are sold every year. In 2020, only 8 million of those cars sold will have some level of low autonomy.
By 2030, all 70 million are expected to include some form of autonomy, with many projecting to have high autonomy.
This is a disruption like no other.
The entire multi-trillion-dollar auto market is on the cusp of being uprooted by AV technology.
How to Play the Autonomous Vehicles Revolution
What’s the best way to play this emerging Self-Driving Revolution? By investing in the core technology which is making all of it possible: LiDAR.
The key to unlocking full autonomy is to enable cars to have complete “vision” – or, more specifically, to give them a human-like ability to see and respond to their surroundings.
Ideally, you want to do this with built-in cameras, since cameras are space and cost-efficient.
But computer vision (which is what you get from cameras) has significant limitations that have proven difficult to overcome, so it has become commonplace across the AV space to equip cars with add-on, laser light perception sensors called LiDAR.
The science and engineering behind LiDAR are complex. But at a high level the idea is pretty digestible.
LiDAR sensors beam out lasers to their surroundings. Those laser beams hit objects around the car, and then bounce back to the sensors. The sensors then either carefully measure the travel time of those laser pulses – called time-of-flight (ToF) – or a change in frequency of the returning light wave – called Frequency Modulated Continuous Wave (FMCW) – to create a proxy for distance.
Do this thousands of times in a 360-degree frame-of-view and voila… you have a complete and dynamic “picture” of the surrounding environment.
Sounds pretty neat, right?
It is. More than that, it is revolutionary – revolutionary enough to create the building blocks upon which Breuer’s utopian concept of self-driving-everything becomes a reality.
To be sure, some say that CV technology will make significant enough advancements over the next few years to make LiDAR sensors antiquated. Elon Musk is one of those people, and history shows that the Tesla (NASDAQ:TSLA) CEO is often right.
But… most other industry experts agree that LiDAR will forever have a place as the foundational technology of self-driving. They argue — and correctly so — that CV is still a long way from being very good. And even when it is very good, it will never be perfect, meaning there will always be a place for LiDAR to “fill in the gaps.”
To that end, LiDAR sensors will forever remain a commonplace manufacturing part for the cars of the future.
Indeed, if all 70 million cars have some form of self-driving capability by 2030, then it is quite likely that most of those 70 million cars will be outfitted with LiDAR sensors.
In other words, thanks to the self-driving revolution, LiDAR sensors are on the cusp of going from niche to ubiquitous in the auto market.
This is an unprecedented transition, which implies enormous growth potential for LiDAR companies.
The Best Stocks to Buy for LiDAR
So which LiDAR stocks should be on you radar today?
My favorite is Luminar (NASDAQ:LAZR). The company has firmly established itself as the unmatched cost and performance leader in proven ToF LiDAR. Thanks to these tech advantages, Luminar has landed several huge contracts – with big names like Volvo and Daimler – the likes of which should cement this company as the LiDAR industry leader for the foreseeable future.
Aeva – which is going public through a merger with InterPrivate Acquisition Corp. (NYSE:IPV) – is also interesting. As opposed to using the same ToF techniques Luminar employs, Aeva is building FMCW LiDAR that measures distance using changes in wave frequency.
Theoretically, FMCW is supposed to have some benefits over ToF, because it uses one continuous laser beam to measure distance as opposed to multiple laser pulses. The continuous beam lends itself to higher signal, less noise, instantaneous velocity information, and potentially longer ranges.
But, relative to ToF, FMCW is nascent, unproven, and expensive… meaning it is presently not superior to ToF LiDAR. Still, there is potential for FMCW LiDAR to “grow up” in the coming years and make waves across the industry. If so, Aeva will emerge as a huge player in this space.
Between Luminar and Aeva, you have two of the most interesting, exciting, and innovative hypergrowth companies in the market.
And, between their stocks, you have two names with some of the biggest upside potential in the 2020s.
So… don’t be afraid of the self-driving revolution… instead, use this unprecedented disruption to create unprecedented profits.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
The New Daily 10X Stock Report: Dozens of triple-digit winners, peak gains as high as 926%… 1,326%… and 1,392%. InvestorPlace’s bold new initiative delivers one breakthrough stock recommendation every trading day, targeting gains of 5X… 10X… even 15X and beyond. Now, for a limited time, you can get in for just $19. Click here to find out how.
In addition, you can sign up for Luke’s free Hypergrowth Investing newsletter. Click here to sign up now.
