8 Best Self-Driving Car Stocks to Invest in  

When it comes to self-driving cars, the future is now. What once seemed like a far-off futuristic concept is fast becoming a reality, and the time to invest is here.

Organizations worldwide seek to jump in on the emerging autonomous vehicle (AV) trend. Companies involved in autonomous transportation technology range from standard automobile players to innovative and exploratory tech companies. 

So, how can you invest in autonomous vehicle stocks, and what else should we consider before investing in this sector? 

An Outlook of the Autonomous Driving Industry

Before buying any stocks, it is crucial to consider the industry outlook. Determining the potential for a profitable return on investment (ROI) is an essential part of any investment. There is a lot to consider when it comes to the autonomous car sector. 

1. Growth Potential  

First and foremost, this is a booming industry that is red hot and worthy of your attention. The automobile industry is going through a massive evolution, kicked off several years ago by the electric vehicle movement.

Autonomous cars would change the future of transportation on an even grander scale. This could range from how people commute to ride-sharing to transporting goods. The growth potential is both exciting and extensive. 

The technology involved in autonomous vehicles is also in high demand in ways that extend beyond just cars to other modes of transportation.

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2. The Technology

Autonomous driving technologies consist of the development of five distinct phases:

• Level 1: Driver Assistance 
• Level 2: Partial Automation
• Level 3: Conditional Automation
• Level 4: High Automation
• Level 5: Full Automation

Nearly every serious player in the industry aims to conquer all five phases and provide consumers with a versatile array of options. The challenge is finding companies capable of reaching levels 4-5. The concept is simple, but the technology involved is quite complex.

Autonomous vehicles combine numerous hi-tech sensors, including radar, sonar, GPS, thermographic cameras, and other advanced control systems, to perceive surroundings and move with little to no manual human involvement. 

Creating autonomous vehicles relies on an elaborate combination of advanced automotive design, high-quality materials, and cutting-edge technology. Companies capable of one, two, or all three of these skills are in high demand and make for good investment potential. 

Considering the technology involved is crucial to understanding the self-driving car industry and its companies, which have distinct competitive advantages. 

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3. Safety Concerns

Another critical determination when investing in any industry is highlighting the obstacles that could lead to a setback or derail growth altogether.

What are the most significant risks involved? 

When it comes to driverless cars, safety concerns are at the forefront. It takes a lot of faith for consumers to take their hands off the wheel and put their complete trust in a machine. 

Understanding the technology involved and identifying companies with a track record of success and consumer safety are parts of assuaging these concerns.  

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What Makes a Good Self-Driving Car Stock?

After coming to a better understanding of the autonomous vehicle industry and some of the key components at play, the next thing to determine is what individual companies represent the best potential. When considering autonomous car stocks, it is important to weigh the following:

1. Growth Potential

Again, we need to weigh the growth potential, but this time on a more direct and individual level, evaluating a specific company or stock. 

• What technology does the organization have, and what’s special about it?
• What advantages help the company succeed in the autonomous vehicle sector? 
• How will the company keep growing?
• How is the company structured, and who are the leaders?

These are some of the questions that can help you evaluate the growth potential of a company to shortlist for your investment portfolio.

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2. Trustworthy 

Investing is not just about explosive growth potential; it is also about mitigating risk. When looking at individual stocks, consider companies in this sector that can be trusted and have a proven track record of success. 

Entrusting in established organizations limits the level of speculation involved. Suppose a company is profitable and has strong revenue streams. In that case, they are more likely to pursue new business avenues, such as research and development, acquisitions of critical competitors/new technology, and increased trials to test quality and safety.  

If we know where to invest in the self-driving sector, we can confirm we are putting our money in an organization we can trust to conduct itself from a business, ethics, and technology standpoint. 

3. Innovative Capability

While trusting an organization is a critical first step, it is also essential to ensure they are innovative.

The driverless car industry is still in its early stages. Therefore, companies involved must have the capacity and skill to create, innovate, and improve different technologies in the sector.

It’s also not enough to just have a new and creative idea. When investing in autonomous car stocks, it is pivotal to highlight organizations with the technological and financial resources to follow through. Revenue streams, strategic partnerships, and attainable goals are all areas to watch  

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Best Self-Driving Car Stocks to Invest in

1. Tesla (TSLA) – Best for Innovation

Tesla has long been a pioneer and innovator in transportation technology. The company is often synonymous with the electronic vehicle space, incorporating high-quality materials and cutting-edge technology to gain a competitive advantage.

Unsurprisingly, Tesla is again emerging as a top player in the sector. As a leading innovator, Tesla represents one of the best driverless car stocks. One distinct advantage for Tesla is that it already has some semi-autonomous features, and vehicles are currently on the market.

New Tesla models come equipped with a “Collision Avoidance Assist” with an intelligent braking system designed to recognize both speed and environment to detect the distance from an object in front of it. Automatic emergency braking helps eliminate or reduce the severity of an accident.

Regarding full automation technology, Tesla is considering several innovative approaches, including potentially incorporating lidar in their designs.

Lidar is a laser sensing technology that produces a detailed 3D map as it moves, identifying its surroundings and detecting all objects. Astronauts frequently use lidar to explore and map outer space.   

Drawbacks for Tesla include some recent product recalls, which have raised safety concerns. Some are also quick to point out that although Tesla presents their newest models as autonomous vehicles, they are only level 2 (partially autonomous) now. 

Pros of investing in Tesla: 

• Produce high-quality vehicles
• Proven track record of innovation
• Continuous growth
• Smart braking technology 

Cons to investing in Tesla:

• History of product recalls (safety concerns)
• Tesla cars are very expensive (could impact long-term growth)
• Current technology falls short of full automation

Summary

Tesla stock has had its fair share of doubters over the years but consistently outperformed expectations and analyst estimates. The company has turned its sights on self-driving vehicles and is poised to capitalize on the high-growth potential.

When we invest in Tesla for its automated driving technology, we know we’re investing in one of the most visionary companies in the world with a track record of automobile innovation. Tesla jumps out among all of the driverless car stocks to buy. 

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2. NVIDIA (NVDA) – Best for GPU Technology

Nvidia is not an automaker, but its innovative graphics processing unit (GPU) is fundamental in creating AI technology.

Artificial Intelligence is a fundamental aspect of the self-driving car sector, and NVIDIA ranks among the best, with advantages over competitors in data processing and semiconductors.

Nearly every company that incorporates one of the five levels of automation in their vehicles relies on Nvidia’s GPU technology. Therefore, even though the company does not design its vehicles, it is a huge player in the autonomous driving space.

The company has partnered with over 370 automobile makers, suppliers, and developers, including notable brands such as Tesla, Mercedes-Benz, Audi, and BMW.

Nvidia has started a continuous commitment to “change how people drive and empower vehicles to drive themselves.”

The company has maintained consistent growth and profitability and is among the most versatile stocks on this list because its technology is wide-ranging. An investment in Nvidia is not purely an investment in autonomous cars, as its technology also covers numerous other sectors.    

Pros of Investing in Nvidia:

• Among the best AI technology
• Fundamental GPUs for the Industry
• Extensive partnerships
• Extends to other sectors

Cons to Investing in Nvidia:

• Not just a self-driving stock could be influenced by other external factors
• Increasing competition 

Summary

If you’re interested in investing in autonomous vehicle stocks, it makes perfect sense to invest in the technology that makes it possible.

As the autonomous vehicle sector continues to heat up, Nvidia is well situated as a leader in AI technology. Nvidia is among the best technology stocks on the market. 

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3. General Motors (GM) – Best for Reliability 

General Motors is a well-established American automaker with a proven track record of over one hundred years of growth, innovation, and sales. Of all autonomous vehicle stocks on this list, I find this company among the most reliable. 

GM demonstrated its versatility by embracing the electronic vehicle movement, investing heavily in technology to create multiple EV lines to meet the sharp rise in demand. 

Apart from being a household name, GM is proving to be a trailblazer in automobile innovation and technology. The company continues to adapt to the times, making it one of the best autonomous driving stocks.  

GM is a compelling entrant in the AV space due to its Cruise division. Cruise is a majority GM-owned company that has been developing driverless vehicles for years.

The company recently launched Cruise Origin, a level 4-5 autonomous vehicle designed for the sole purpose of self-driving. Unlike other hybrid models, it does not come equipped with manual steering controls.    

GM’s Cruise line has already caught the eye of many noticeable investors, including Microsoft, Softbank Group, and Honda, who have all backed the venture.

Cruise is valued at over $30 billion, giving GM substantial financial resources to refine its technology and make other key acquisitions. 

The drawbacks for General Motors are that the Cruise division is still an unproven commodity, and the technology involved is still a work in progress.

Also, many external factors besides the autonomous driving division might influence the stock price. AV is only one component of a large-scale operation.

Pros to investing in General Motors:

• Well known and trusted Automaker 
• Track record of success and innovation
• Notable strategic partnerships
• Financial resources
• Cruise line

Cons to investing in General Motors: 

• Unproven technology
• Non-AV-related factors could influence stock

Summary 

When considering the pros and cons of investing in self-driving cars, a conventional legacy brand like General Motors may not be the first thing that comes to mind, but it is certainly on our radar.

GM is a company that continues to evolve and adapt while remaining extremely reliable. Investing in GM stock is a good move due to continuous innovations and creations.

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4. Ford (FD) – Best for Trusted Quality 

Those intrigued by General Motors’ brand recognition and reliability will also likely gravitate towards Ford, another well-established automaker with a long and successful history of creating quality products.

Ford is another legacy car maker with continuous innovation that keeps it at the forefront of the automotive industry.

Like GM, Ford quickly adapted to the electronic vehicle movement, investing in key technology and design to gain an edge. Some recent new designs include electric vans and the Mustang Mach E.

Now, the company is training its sights on autonomous cars, with plans to tackle all five levels of autonomy. Planning for a self-driving car division is still in the works, but it will be well worth keeping an eye on in the future

Pros of Investing in Ford:

• Well-known and trusted automaker 
• Track record of success and quality
• Commitment to autonomous driving
• Financial resources
• Modern designs

Cons to Investing in Ford:

• Details on AV rollout unclear
• AV line only in the beginning stages 

Summary

An investment in Ford is a proven commodity with a long history of staying ahead of the curve.

Ford produces high-quality cars and is a brand we can trust. While the timeline of its self-driving car division is still uncertain, it is a company well worth keeping on our radar. 

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5. Xpeng (XPEV) – Best for Growth Potential

Xpeng is a Chinese electric vehicle maker. The company has emerged as a strong player in the self-driving car space, and several smart EV models are gaining increased popularity in China.

In 2020, Xpeng acquired Guangdong Foday Automobile, an automotive manufacturing company, giving it a foothold in the self-driving car market.

The company is emerging as a direct rival to Tesla in the EV and AV space. The Xpilot 3.5 is a level 2 semi-autonomous vehicle that matches Tesla’s latest release and marks Xpeng’s entrance as a serious player in self-driving technology.

Xpeng is already manufacturing its own autonomous vehicles with smart in-car operating systems. The company has fully embraced lidar technology in its P5 electric sedan, and it looks poised to be a leading innovator in autonomous vehicle technology.

One potential drawback is increasing competition within the Chinese market, where electric vehicles are enormously popular. Other high-profile companies, such as Nio and Li Auto, are already competing for an edge in the market. 

Pros of investing in Xpeng:

• A leading automobile innovator in China
• Semi-autonomous vehicles already on the market
• High growth potential
• Incorporate Lidar technology

Cons to investing in Xpeng:

• Untested in international markets
• Rising competition in China

Summary

Xpeng lacks the long-term brand recognition of some notable automakers on this list.

However, it is one of the more intriguing stocks for self-driving cars based on both short and long-term growth potential throughout China and internationally. Xpeng is already incorporating advanced AI technology in its designs and has proven itself a capable innovator thus far. 

6. Aptiv (APTV) – Best for Ridesharing

Aptiv is a global technology company founded in 2011 with global headquarters in Ireland. The company manufactures and sells vehicle components focusing on signal and power solutions, electronic power, and advanced safety technology solutions for automotive vehicles. 

Aptiv focuses on autonomous commercial vehicles, and it is looking to gain a foothold in ride-sharing by creating robotic taxis.

The company has joined forces with Hyundai Motor and Lyft in launching Motional, an all-electric robotaxi. Passengers can order rides via App, and each cab is equipped with a computer communications system to input directions and customized services. 

This is an exciting addition to the list of best autonomous vehicle stocks because it capitalizes on a separate industry. The technology can be a game-changer in ride-hailing, streamlining existing services. 

Companies like Uber and Lyft have struggled to maintain profitability because paying drivers substantially cuts profits. Automating the driving eliminates the majority of business expenditures and can be very lucrative. 

A drawback for Aptiv is that self-driving taxis seem less appealing to consumers, who wouldn’t be driving these cars anyway. 

Pros of Investing in Aptiv:

• Motional line already in place
• Potential to revolutionize ridesharing
• High-profit margins
• Strategic partnerships

Cons to Investing in Aptiv:

• Not an established brand
• Still has many tentative deals
• Not too many advantages for consumers

Summary

When looking for investment outside traditional automakers and established brands, Aptiv represents an exciting alternative.

The company already has self-driving technology, giving it an advantage over competitors. Ridesharing has soared in popularity over the past decade, so the potential in this market is considerable.

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7. Luminar Technologies (LZN) – Best for Lidar Technology

Luminar is a self-driving car technology stock to consider. As mentioned with Tesla and Xpeng, many automakers are beginning to test and incorporate lidar technology as a central component of self-driving technology. 

Luminar represents one of the best opportunities to invest in this technology. Luminar makes laser sensors that detect movement and stationary objects nearby. This technology is crucial to the safe adaptation of self-driving vehicles. 

Another compelling area of note is a strategic partnership with Nvidia, which is allying with two of the strongest AI tech stocks on the market.

Nvidia GPUs provide computing power, which, combined with advanced motion/object detection, could offer automobile companies an all-encompassing tech package. 

A potential drawback is that lidar technology can be quite expensive. For this reason, some automakers are hesitant to universally adopt it and are still searching for alternative AI technology in their autonomous designs. 

Pros to investing in Luminar:

• Cutting-edge lidar technology
• Key partnership with Nvidia
• Potential deals with automakers

Cons to investing in Luminar:

• Expensive to produce
• Not the only self-driving AI technology

Summary

Luminar is another exciting opportunity to invest in autonomous car stocks without actually investing in an automaker or manufacturer. Lidar is an undeniably compelling technology that could be a game-changer in implementing and adapting autonomous vehicles in the years to come. 

8. Alphabet (GOOG) – Best for Sophisticated AI

Alphabet is the parent company of notable search engine Google.

What on earth does this have to do with self-driving cars?

As mentioned with the other tech stocks on this list, AI is a central component in the creation and function of autonomous vehicles, and Google has some of the best AI technology in the world.   

The same AI technology that makes Google the world’s number one search engine can be used to develop self-driving cars. With superior AI tech, Google has a distinct advantage over nearly all of its competitors.

Apart from owning valuable AI tech, Alphabet owns Waymo, a ride-sharing company. Similar to Aptiv, Alphabet has expressed interest in implementing digital taxi services.

The goal is to provide a seamless user experience while reducing the large expenditures typically associated with ride-sharing. The company has even launched a pilot program in Phoenix, Arizona, called Waymo One.

A drawback to investing in Alphabet is that self-driving cars are a minimal aspect of a massive corporation.

Even more so than GM or Ford, many additional external factors could influence the stock price that are unrelated to autonomous vehicles. 

Pros to investing in Alphabet:

• Brand recognition
• Leading innovator
• Superior AI technology 
• Development of Waymo

Cons to investing in Alphabet:

• Limited involvement in self-driving cars 
• External factors can influence stock

Summary

Alphabet may be the most surprising addition to this list. Although it is not exclusively a self-driving car stock, its AI technology is undeniable and could play a vital role in the evolution of autonomous vehicles. Regarding self-driving car stocks, Alphabet is definitely on our radar.

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