The autonomous vehicle era may be one of the largest long-term opportunities for tech investors. But while Alphabet Inc (Nasdaq: GOOG, GOOGL), Tesla Inc (TSLA), General Motors Company (GM) and other companies are battling it out for the best AV tech, Loup Ventures analyst Gene Munster says their next major battle will be convincing passengers that AV travel is actually safe.
Google’s Waymo AV unit hit another major milestone on last week when it finally began testing its fully autonomous vehicles on public roads without a human driver on board. But no matter how many safety tests its vehicles pass, Munster says it must go out of its way to convince the public that it’s OK to put a human life in the hands of a machine.
“Waymo knows that in order for mass adoption to take place, the public must first trust autonomous vehicles,” Muster says. “Successfully building a vehicle that can operate autonomously is a feat of engineering, but educating the public on its benefits is a different task entirely.”
According to Munster, Google is already taking the necessary steps by partnering with organizations such as the National Safety Council and Mothers Against Drunk Driving to educate members about the safety benefits of autonomous vehicles.
In addition, Waymo has been working with law enforcement agencies in each city in which its vehicles have been tested. While the company says its driverless vehicles are much safer than human-controlled cars, law enforcement must be prepared for how to handle inevitable traffic accidents involving AVs.
Google’s outreach will be a critical part of unlocking the full long-term value of its Waymo division. Following Alphabet’s most recent earnings report, Wells Fargo analyst Ken Sena says Waymo will be a bit part of the company’s growth story.
“We view this quarter as further supporting our view that an inflection in compute stands to pave a path for Google into a growing number of industries, where vehicles (e.g., Waymo) remains one of several, and we view Google’s leading position here as sufficient enough to offset known overhangs,” Sena said, according to Bloomberg.
Earlier this year, Morgan Stanley analyst Adam Jonas said…
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