While Tesla (NASDAQ:TSLA) has recently faced business setbacks due to dipping demand for electric vehicles, its approach to fully self-driving cars has kept interest in its stock high. Yet, despite being the furthest ahead, Tesla isn’t the only automaker focusing on the technology. Now major competitors across markets are developing their approach to becoming autonomous driving stocks, which could form a lucrative new sub-industry for investors to get in on early.
Furthermore, developed nations are increasingly improving their infrastructure, making autonomous vehicles more plausible for more drivers as commutes get longer. However, investors should remember that not all technological trends in the auto industry are in demand.
In fact, despite the current media excitement around autonomous vehicles, regulations and human nature may make it so that the technology never catches on. Bearing that in mind, here are three car companies that could become autonomous driving stocks if the industry takes off.
General Motors (GM)
Through its Cadillac-branded sedans, General Motors (NYSE:GM) has shown the most promise for competing with Tesla’s autonomous driving tech. The company’s wide portfolio of cars has also enabled it to test various camera and autopilot technologies to determine its approach to the autonomous driving market.
Currently, General Motors’ most developed self-driving technology is called Super Cruise, which is intended for long-range cruise control and exceptional comfort. The reason this technology could be more competitive than Tesla is that it’s more applicable to the most common use cases when people need transport.
While autonomous driving around the city might be nice, having a long-range cruise from point A to point B on the highway is likely more enticing to the broader population. Pair this with GM’s brand identity and GM’s broad market share, and it looks like one of the best autonomous driving stocks to buy.
Nissan (NSANY)
Though Nissan (OTCMKTS:NSANY) has struggled to capture profit growth in the last few years, the company’s ProPILOT technology could be a big step in the right direction. Much like General Motors, Nissan is focusing its autonomous driving efforts on a more reasonable and generally applicable version of autonomous driving than a full Tesla autopilot.
The difference, however, is that this technology could improve Nissan’s entire line of longer-range vehicles, such as SUVs and sedans, unlike Cadillac’s relatively limited number of models that apply the Super Cruise technology.
Thus, Nissan could potentially perform better if autonomous features continue to be more sought after in the new car market. However, investors should keep a close eye on the financial performance of Nissan before investing in its autonomous driving ventures. Once the company addresses its slimming profit margins and expenses, it could become one of the best autonomous driving stocks to invest in.
Toyota Motor Corporation (TM)
When it comes to cars and speculating on new technologies, Toyota Motor Corporation (NYSE:TM) tends to be one of the safest bets an investor can make. As the world’s largest company by car sales, Toyota has the widest array of customers and markets to test its new Mobility Teammate Concept technologies for better integration. This makes TM a good prospect for autonomous driving stocks.
These technologies include the Chauffeur system and the Guardian system. Chauffeur technology enables a vehicle to drive on its own. while Toyota Guardian has the driver and an AI system share roles to improve driving safety. This is possible through Guardian’s software, which constantly monitors the driving environment and steps in at a moment’s notice to protect the vehicle and its passengers when a collision or other safety risk is imminent.
Moreover, Toyota claims, “This is not done by braking alone but by using the full range of driving actions.” This would put Toyota vehicle safety in a league of its own, if true.
On the date of publication, Viktor Zarev did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.