While Tesla Motors (NASDAQ:TSLA) may have grabbed some headlines this week for its ambitious goals with autonomous driving (SAE level 5), the technology is being widely discussed across industries as a potential future reality.
At a real estate conference in New York this week, a panel member called autonomous vehicles the biggest tech news concerning real estate in the last ten years. Some see a future reversal of urbanization trends in a development that could have significant investment implications.
City planners and architects are already thinking of next-gen design. A paper titled "Beyond Google's Cute Car" (.pdf version) is a good example of how cities are being reimagined.
Then there's this from the man who designed the 2015 Ford Mustang. "The next 10 years in this business is going to be the biggest change and challenge since the turn of the last century when cars took over for horses," said Ford design chief Moray Callum. Ford (NYSE:F) aims to have a high-volume, fully autonomous SAE level 4-capable vehicle in commercial operation in 2021.
Self-driving car development is a topic of discussion on FedEx (NYSE:FDX), UPS (NYSE:UPS), Lyft (Private:LYFT), Uber (Private:UBER), Hertz Global (NYSE:HTZ), Google (GOOGL, GOOG), Avis Budget (NASDAQ:CAR), Domino's Pizza (NYSE:DPZ) and Nvidia (NASDAQ:NVDA). Earnings season is just heating up, but a host of companies -- including OTCPK:TMOAF, OTCPK:DDAIF, OTCPK:VOLVY, MXIM, CPRT, WBC, GNTX and XLNX -- have already talked up the trend on their conference calls. GM reports earnings this week and will update on any self-driving Chevy Bolt plans.
Looking ahead, insurance companies, chipmakers, truckers and cybersecurity firms (NYSEARCA:HACK) will be firmly in the self-driving conversation.
So who has a profitable trade idea off of the evolution of cars?
Used machinery is flooding the secondhand market, piling more pain on equipment makers battling slack demand amid a global slump in the value of everything from coal to corn, WSJ reports.
Dealers, in turn, are keeping smaller inventories of new wheel loaders, backhoes and other machinery. That is hurting sales for Caterpillar (NYSE:CAT), Volvo (OTCPK:VOLVY), Deere (NYSE:DE) and other manufacturers.
Rental businesses account for half of new equipment sales in the U.S., and some analysts see that climbing to 60% within five years.
The EPA and U.S. Department of Transportation rules would achieve 10% more carbon emission and fuel consumption reductions than last year’s proposed rules, likely raising the price tag price for tractor trailers and other long-haul trucks but cutting operating costs.
Cummins (NYSE:CMI), a supporter of the rules, says it is confident it has the engine technologies to meet or exceed improvements required by the standards.
The cost of tractors that pull freight trailers could rise 12%, Bloomberg calculates, impacting truckmakers such as Paccar (NASDAQ:PCAR), Navistar (NYSE:NAV), Daimler (OTCPK:DDAIF) and Volvo (OTCPK:VOLVY), raising costs for their products.
The Obama administration is expected to issue final rules today reducing greenhouse gas emissions from trucks over the next decade, likely one of the last major climate-related rules President Obama will issue before he leaves office.
The final regulations, which aim to cut 1B metric tons of emissions, will be a game-changer for tractor-trailers, buses and other large vehicles with model years 2021 through 2027.
"For 14 years they colluded on the pricing and on passing on the costs for meeting environmental standards to customers. This is also a clear message to companies that cartels are not accepted," said Commissioner Margrethe Vestager.
Truckmakers face heavy fines from the European Union over price fixing charges, according to Bloomberg.
Although some truck manufacturers have set aside provisions to pay for the expected penalties, it's unclear which companies will end up having the largest exposure.
The sector is down across the board on the day, including PACCAR (NASDAQ:PCAR) -3.1%, Navistar (NYSE:NAV) -9.1%, Daimler (OTCPK:DDAIF) -5.4%, Volvo (OTCPK:VOLVY) ADRS -6.1%, Supreme Industries (NYSEMKT:STS) -8.5%, and CNH Industrial (NYSE:CNHI) -6.6%.
EV truck maker Nikola Motors has taken a page out of the Tesla playbook by releasing pre-order information and scheduling an unveiling event for later in the year.
The startup has taken down 7K reservations with deposits for the Nikola One electric truck. The reservations total $2.3B worth of orders. The Nikola One is promised to have 2,000-horsepower, 1,200 miles of range, and a 320-kWh battery.
The class 8 semi-truck is due to be unveiled by the company at an event on December 2.
"Our technology is 10-15 years ahead of any other OEM in fuel efficiencies, MPG and emissions. Weare the onlyOEM to have a near zeroemission truck and stilloutperform diesel truck runningat 80,000 pounds," says CEO Trevor Milton.
"We believe wewill pass the current market leaderslike Daimler, PACCAR, Volvo andNavistar in sales orderswithin the next12-24 months," adds the exec.