Alphabet Gets CPUC Permit, Boosts Self-Driving Initiatives

Here is another piece of good news for Alphabet’s (NASDAQ:GOOGL) self-driving unit Waymo. Waymo has been granted a permit to offer self-driving car rides to public in California, which is another feather on its self-driving initiatives.

The latest announcement makes Alphabet-owned Waymo the fourth company to get permission from the California Public Utilities Commission (CPUC) to carry passengers in autonomous vehicles.

However, there are a few important things to be taken care of. The company needs to have a safety driver to take care during any emergency or untoward incident. In addition, none of the passengers could be charged for the service at this point of time.

Notably, Zoox Inc. had won the first permit last December to carry passengers in self-driving cars, followed by two China-based companies, namely Pony.ai and AutoX.

Notably, the latest advancement will help it in gaining momentum among consumers who are eagerly waiting to avail the driverless technology. This service, maybe in the long term, is going to aid the company’s revenue generation, which will in turn drive top-line growth.

Autonomous Vehicles Hold Promise

Just last week, Waymo partnered with Lyft (NASDAQ:LYFT) to provide 10 self-driving minivans to the latter for use in specific areas of Phoenix. In addition, Waymo signed a deal with Renault (PA:RENA) and its subsidiary Nissan, which aims at bringing automated vehicles to France and Japan, with possible expansion in the future.

Last December, Waymo had unveiled its first paid self-driving taxi, Waymo One in Arizona, which currently serves people in the suburbs of Phoenix, namely Chandler, Tempe, Mesa and Gilbert. In addition, the company has expanded its scope in this particular space by rolling out self-driving trucks for freight services.

All these factors will aid Alphabet in rapidly penetrating into the global self-driving car and truck market, which, per a report from Grand View Research, is projected to witness a CAGR of 63.1% between 2021 and 2030.

Further, a report from Zion Market Research indicates that this market is expected to hit $26.58 billion by 2024, and witness a CAGR of 25.7% between 2018 and 2024.

Therefore, Alphabet’s strong endeavors toward enhancing the self-driving service with commercial autonomous driving cars, trucks and taxis will continue to drive growth.

Gaining Competitive Edge

The immense growth opportunities in this autonomous vehicle market are luring enough to attract other tech giants like Apple (NASDAQ:AAPL) , Uber (NYSE:UBER), Amazon (NASDAQ:AMZN) and Baidu (NASDAQ:BIDU) , among others, which are also leaving no stone unturned to grab a piece of this market pie.

Just last week, the iPhone maker confirmed that it had acquired self-driving start up Drive.ai. The deal will definitely boost Apple’s engineering talent strength, owing to Drive.ai engineer’s domain expertise in neural networks, which play an important role in developing software for driverless vehicles.

Uber revealed the third generation of its self-driving car last month. Self-driving startup Aurora, backed by Amazon and Sequoia Capital, recently partnered with Fiat-Chrysler. The deal focuses on integrating Aurora’s technology into Fiat-Chrysler’s Ram trucks, with other vehicles likely to be added in the down the road.

Nevertheless, Alphabet’s robust self-driving technology and trend of winning deals for testing driverless cars are acting as tailwinds. Also, Waymo One provides Alphabet a first mover advantage, which is anticipated to strengthen the company’s competitive position against its peers.

Zacks Rank

Currently, 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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