Driverless Cars

eToro’s driverless cars smart portfolio has delivered gains of approximately 50% in the past two years for investors and has managed to stay positive despite the two bear markets that have occurred within that period – the first being the pandemic crash and the second the latest Fed-induced downturn.

Driverless technology sounds futuristic but many companies are working tirelessly to make this technology mainstream. Companies within the portfolio include chip makers, taxi companies whose fleet is autonomous, and tech firms creating the technology that will allow these cars to achieve this capability.

Via its Smart Portfolios solution, eToro provides access to investors to this up-and-coming space. Even though the performance of the portfolio so far in 2022 has been negative due to a shift in macroeconomic conditions, the fundamentals and prospects of this market remain promising.

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A Closer Look at the Composition of the Driverless Cars Portfolio

Currently, over $5 million have been invested by eToro users in the Driverless portfolio. In 2020 and 2021, it delivered gains of 71.1% and 33.4% respectively. At the moment, Baidu, Nvidia, BYD Co., ChargePoint Holdings, and Google make up 26% of the portfolio’s assets.

driverless cars portfolio on etoro

Driverless Cars Portfolio Value 2Y Chart – Source: eToro

In total, 34 different stocks that have exposure to this market comprise the Driverless Cars portfolio. This provides a decent degree of diversification in case some company-specific developments lead to a decline in the value of one of the stocks.

The portfolio has received a rating of 7 on a scale of 10 in terms of its risk with the average 1-year risk rating standing at 6. This risk score gauges the volatility of the portfolio following a proprietary formula devised by eToro to help investors in figuring if the instrument is the proper fit based on their financial goals and risk tolerance.

A high-risk portfolio typically delivers high rewards and vice versa. Currently, the maximum daily drawdown experienced by the portfolio stands at 6% while the max weekly decline stands at 10.4%. Over 3,000 investors within the social trading platform are investing in the Driverless Cars portfolio.

To invest in this smart portfolio, users must open an account at eToro. The minimum investment to open a position in the Driverless Cars portfolios ranges from $1,000 to $5,000 depending on the user’s country of residency.

How Does Driverless Technology Work?

Companies that have been creating this ground-breaking technology aim to fully replace the driver’s traditional role with algorithms and software that can make instant decisions when navigating roads.

There are many components required to achieve this including chips, sensors, geo-location devices, cameras, and lasers and companies that manufacture these products are somehow involved in the development of the industry as a whole.

driverless vehicle

The goal of driverless technologies is to reduce accidents and traffic by following safe and efficient driving techniques.

For the technology to fully reach its potential, governments are required to invest in smart roads that incorporate sensors and other similar components that broadcast data to autonomous cars that can be used in their decision-making process.

Companies like Baidu are among the ones that have made the most advance in this particular market as they currently own and operate the largest fleet of autonomous vehicles with a total of 500 cars. By 2025, this Chinese company plans to have vehicles in over 65 cities.

In 2021, multiple companies filed patents for autonomous vehicles including Toyota, Honda, Hyundai, and Waymo. Tesla is also known for being a top developer of autonomous technology. The founder of the electric vehicle producer, Elon Musk, told the press in May this year that the company should start commercializing fully autonomous vehicles before the end of the first semester of 2023.

Tesla’s vehicles are already partially driverless via their Autopilot mode. However, the feature requires that drivers remain fully attentive to the road in case the software malfunctions at some point during the trip.

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