There is a massive transformation taking place in the auto industry.
Last week, carmakers like Audi, Mercedes, Ford Motor Co.
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), and BMW debuted their latest models and technology at the Consumer Electronics Show (CES).
The CES is one of the largest consumer-electronics and technology conferences in the world. Around 155,000 people came this year to check out the latest innovations and gadgets from more than 3,000 exhibitors. On Monday, I told you about some of the biggest trends and innovations
I saw – including ultra-high-definition televisions.
But one trend I saw this year will transform the way you think about driving. And while I'm sure you've heard of this technology before, it's a lot closer to becoming a reality than you think...
At this year's show, Audi unveiled a computer system that essentially lets your car drive itself
I know what you're thinking... this technology is still light years away. We will never see driverless cars
on our neighborhood streets.
That's what I thought after seeing a version of this technology at last year's CES. Audi's computer system consisted of a huge box with a bunch of cables spread out across the entire trunk. There were circuit boards everywhere. I thought this technology would never be adopted by consumers.
But at this year's show, Audi's technology received a major upgrade
The computer system – called zFAS – is now a small circuit box that tucks into the side of your trunk. You won't notice it's there unless someone points it out. And it controls everything in the car – from steering to braking.
Sensors that blend in to the exterior around the entire car work with cameras equipped in the car to create a picture of what's happening on the road. The sensors detect the distance of objects in front of the car and monitor the traffic behind the car. The cameras pick up lane markings, road boundaries, and other cars. The zFAS system uses information from the sensors to determine how to react (for instance, to brake).
After seeing a video of Audi's concept car – the Sport Quattro Laserlight – equipped with zFAS in action, I can tell you the driverless car is much closer than you think.
Audi took its Sport Quattro Laserlight for a spin on Las Vegas Boulevard during peak traffic. While a man was in the driver's seat, the car was driving itself. His hands were not on the steering wheel and his feet were off the pedals.
The Sport Quattro navigated traffic in real time on one of the busiest streets in Las Vegas.
But there are still hurdles before driverless cars can officially hit the streets.
For example, these cars have trouble changing lanes. Right now, drivers must take control of the car to perform functions like this. Plus, most states do not allow cars to operate without drivers. (However, some states just passed laws that will allow the testing
of driverless cars.) But after seeing this video
at the CES – it's clear these cars could be in driveways sooner than you think.
And Audi isn't the only carmaker creating driverless cars. For example, Toyota, BMW, Volvo, Mercedes-Benz, and Lexus are all working on their own self-driving cars.
Some of the big winners of the driverless-car trend will be technology giants Google
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) and Qualcomm Inc.
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). Google has created driverless software called Google Chauffeur. It's currently being used in Lexus and Toyota models – which have driven across the Golden Gate Bridge and around Lake Tahoe without any human interaction. Qualcomm will provide the chips that power Google's operating system within these cars.
However, my favorite company that will benefit from this trend is Nvidia Corp.
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). The chip maker is behind Audi's new zFAS technology. In short, Nvidia is using its signature Tegra K1 chip to turn last year's bulky system (which took up the entire trunk) into a small circuit board – while increasing power and capabilities.
I suggest investors keep an eye on these companies. Audi, Toyota, and BMW are – and will continue – spending loads of cash to create driverless cars in the next few years. It's just a matter of time before these stocks ramp higher.