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Technology and automation has generated some pretty major economic shifts in recent history. I believe autonomous driving can be a pretty big shift and it could happen pretty fast. Assuming it does and this economic shift is as big as I think it will be, then there will be significant movement of wealth taking place. As an investor that brings a couple of questions to my mind:
1. What industries are going to win if autonomous driving turns out to be a change similar to horse-and-buggy being replaced by cars? What industries are going to lose?
2. How can I take advantage of these changes with my investments?
This is what I can see from here...
Winners:
- Shipping (UPS, FedEx, etc) because their human resource needs and inefficiencies fell through the floor.
- Big retail (Walmart, etc) same reason as shipping. Walmart trucks will probably be autonomous before anyone else.
- Mid to low income individuals. Car ownership will be unnecessary because it is way cheaper to push a button an be picked up by a robot than it is to buy, maintain, insure, and fuel a car of your own.
- Battery Manufacturers. Specifically the types of batteries that go in electric cars.
- Mobile data providers. People in vehicles will be consuming a lot of mobile data because they need not watch the road. The vehicles themselves will also need good mobile data service.
- Individuals whose livelihood is NOT tied to the automotive industry. Me, for example, my monthly budget will no longer include "car". It will have "Uber" instead and the expense should be significantly less than "car".
- People who want a safe drive and hate car accidents, road rage, and idiot drivers.
Losers:
- Car manufacturers. This new technology is actually shrinking the customer base for their product.
- Auto related professions. Dealers, mechanics, drivers, auto parts stores. If there is a fraction of the cars on the road, then this industry will contract big-time.
- Hotels. If you can push a button, get picked up in Chicago after work, eat supper and sleep in your autonomous car, and arrive in New York City before 8AM the next day well rested and prepared, then who would waste their money on a hotel room for a business trip?
- Regional Airlines. See the reason for hotels.
- Gas stations.
- Oil and gas industry. This is where I'm thinking the largest disruption will be. If most vehicles on the road are autonomous vehicles that are a part of some corporate fleet (UPS or Uber or FedEx, etc), then I bet a lot of them will be electric. Not only will a lot be electric, but the total amount on the road will be exponentially lower. There will be a glut of oil and gas and nobody wanting to buy it. See THIS list of countries who depend upon oil and gas for survival.
- Auto accident injury lawyers. (I'm not crying about this one)
Timing - I've read estimates that have as soon as 2 years, to as long as 10 years. 10 years sounds very soon to me if we are talking about this profound of a change. That would mean some of our children may never drive a car.
Some links for more reading:
- http://www.businessinsider.com/china...lution-2017-12
- https://seekingalpha.com/article/408...ing-revolution
- https://www.recode.net/2017/4/19/153...ciety-mobility
- https://www.cnbc.com/2017/05/02/how-...al-estate.html
I'll post more in here as I come across more helpful articles. I'd love to hear insight, especially concerning how to capitalize on the wealth shift that would accompany this type of change. - Thanks!
1. What industries are going to win if autonomous driving turns out to be a change similar to horse-and-buggy being replaced by cars? What industries are going to lose?
2. How can I take advantage of these changes with my investments?
This is what I can see from here...
Winners:
- Shipping (UPS, FedEx, etc) because their human resource needs and inefficiencies fell through the floor.
- Big retail (Walmart, etc) same reason as shipping. Walmart trucks will probably be autonomous before anyone else.
- Mid to low income individuals. Car ownership will be unnecessary because it is way cheaper to push a button an be picked up by a robot than it is to buy, maintain, insure, and fuel a car of your own.
- Battery Manufacturers. Specifically the types of batteries that go in electric cars.
- Mobile data providers. People in vehicles will be consuming a lot of mobile data because they need not watch the road. The vehicles themselves will also need good mobile data service.
- Individuals whose livelihood is NOT tied to the automotive industry. Me, for example, my monthly budget will no longer include "car". It will have "Uber" instead and the expense should be significantly less than "car".
- People who want a safe drive and hate car accidents, road rage, and idiot drivers.
Losers:
- Car manufacturers. This new technology is actually shrinking the customer base for their product.
- Auto related professions. Dealers, mechanics, drivers, auto parts stores. If there is a fraction of the cars on the road, then this industry will contract big-time.
- Hotels. If you can push a button, get picked up in Chicago after work, eat supper and sleep in your autonomous car, and arrive in New York City before 8AM the next day well rested and prepared, then who would waste their money on a hotel room for a business trip?
- Regional Airlines. See the reason for hotels.
- Gas stations.
- Oil and gas industry. This is where I'm thinking the largest disruption will be. If most vehicles on the road are autonomous vehicles that are a part of some corporate fleet (UPS or Uber or FedEx, etc), then I bet a lot of them will be electric. Not only will a lot be electric, but the total amount on the road will be exponentially lower. There will be a glut of oil and gas and nobody wanting to buy it. See THIS list of countries who depend upon oil and gas for survival.
- Auto accident injury lawyers. (I'm not crying about this one)
Timing - I've read estimates that have as soon as 2 years, to as long as 10 years. 10 years sounds very soon to me if we are talking about this profound of a change. That would mean some of our children may never drive a car.
Some links for more reading:
- http://www.businessinsider.com/china...lution-2017-12
- https://seekingalpha.com/article/408...ing-revolution
- https://www.recode.net/2017/4/19/153...ciety-mobility
- https://www.cnbc.com/2017/05/02/how-...al-estate.html
I'll post more in here as I come across more helpful articles. I'd love to hear insight, especially concerning how to capitalize on the wealth shift that would accompany this type of change. - Thanks!
Maybe it's coming though
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