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Alphabet’s (GOOGL) Waymo to Advocate Self-Driving Car Safety

Zacks

Alphabet Inc.’s GOOGL driverless car subsidiary Waymo is launching an educational campaign in support of its technology along with several other groups.

Called "Let's Talk Self-Driving", the campaign aims to highlight safety features that the technology can offer and reduce, if not completely eliminate, fear and skepticism about it from the public mind. It’s not known how much the company is spending on the campaign.

We observe that Alphabet has gained 25.2% year to date, outperforming the S&P 500’s rally of 13.7%.


Campaign Details

Waymo is teaming up with Mothers Against Drunk Driving, the National Safety Council and three Arizona-based organizations — the East Valley Partnership, the Foundation for Senior Living and the Federation for Blind Children — to advocate the efficiency of self-driving cars in terms of safety, mobility and other advantages.

The campaign will start on Monday in Arizona and involve digital ads, radio spots, outdoor billboards and fuel pump advertising. Waymo CEO John Krafcik said in a statement, “Our hope is to grow this conversation into a national dialogue and provide opportunities for people to get up close with this technology.”

A Big Hurdle to Cross

The biggest hurdle in getting these cars to market is the safety issue that has made people skeptical and the regulatory environment far less supportive. The American Automobile Association (AAA) is said to have found that three-quarters of the U.S. drivers have reservations about riding in an autonomous car.

That’s not completely unjustified. Alphabet’s self-driving cars have met with accidents several times in the past. But it’s also true that the technology is fast-evolving and companies from different spaces (tech players, automakers, chip makers, component manufacturers) are collaborating to perfect it as soon as possible.

A lot of money is involved and if successful, a lot more can be earned, driving the next phase of revenues for these players.

Alphabet Inc. Revenue (TTM)

That said, a campaign like this makes sense. It could be more effective if it manages to convince people that this fast-improving technology is increasingly making roads safer.

Some Encouragement for Investors (and companies of course)

Recently, a Senate panel unanimously approved a bill that could allow more self-driving cars on U.S. roads. The bill, which still needs to get a full Senate vote, will not only speed up commercialization of autonomous vehicles but also prevent states from imposing regulatory blocks.

Notable lobbyists of the legislation included Alphabet, Apple AAPL, Tesla, General Motors GM, Ford Motor F and others.

Per Boston Consulting Group’s (BCG) estimates, the autonomous car market will be worth $42 billion by 2025 and $77 billion by 2035. BCG also estimates that more than 12 million fully autonomous and 18 million partially autonomous cars are expected to be sold per year globally.

Per market research firm IHS, autonomous car sales will hit 21 million by 2035, at a CAGR of 43% between 2025 and 2035. In the United States, 4.5 million autonomous vehicles are expected to be sold by 2035. Per a Business Insider report, an estimated 10 million self-driving cars will hit the roads by 2020.

So, early investors can sell off their interest at a nice premium.

Zacks Rank

Alphabet carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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