3 Robotaxi Stocks Offering Early Investors Money-Making Potential

Robotaxis have reportedly been a big hit in the Chinese city of Wuhan, and the country is clearly moving towards a widespread adoption of the phenomenon in many cities. China’s two largest cities, Beijing and Shanghai, are leading the way in the legal operation of robotaxis within their borders.

These developments have recently sparked a surge in the stocks of several Chinese and American companies that stand to benefit from the proliferation of robotaxis. And in the longer term, the successful and widespread deployment of robotaxis in Chinese cities may well convince American officials to let a similar scenario play out in the United States.

Here are three robotaxis stocks that could skyrocket as the phenomenon spreads dramatically.

Baidu (BIDU)

from Baidu (NASDAQ:BIDU) Apollo robotaxi service offers 6,000 driverless rides per day in Wuhan and is growing rapidly. Baidu expects the service to break even in the city by December. The company’s ability to deliver a robotaxi service that consumers embrace while quickly scaling the business to profitability suggests it can build a large, highly profitable multinational robotaxi network.

It is also worth noting that, according to Chinese securities firm Guotai Junan International, the operating costs of Baidu’s robotaxi business are expected to drop significantly in the future.

From July 1 to July 11, the company’s shares soared 14%, indicating that the Street may be starting to realize the enormous potential of Baidu’s robotaxi business.

Despite these recent gains, the stock still has a meager forward price-to-earnings ratio of 9.9 times and a very low enterprise value-to-EBITDA ratio of 5.7 times.

The company’s low valuation and huge potential make it one of the best robotaxi stocks to buy.

Aurora Innovation (AUR)

Aurora Innovation (NASDAQ:AUR) is developing hardware and software to drive trucks autonomously. On June 25, the company announced a major breakthrough. Specifically, it reported that Uber Technologies (NYSE:Uber) has agreed to provide its freight customers with early access to Aurora’s offering. Under the agreement, Uber will become one of Aurora’s first customers when the latter company begins autonomously transporting goods between Dallas and Houston. That program is expected to begin by the end of this year.

Additionally, the deal gives Aurora a significant first-mover advantage. Aurora will become the first company to provide autonomous transportation to Uber’s freight customers.

“Self-driving trucks will make freight transportation more efficient, and this industry-first program will help facilitate and accelerate the adoption of self-driving trucks by our carriers,” Uber Freight CEO Lior Ron said in a statement.

Aurora isn’t a traditional robotaxi company, but it seems poised to be a big winner in the autonomous trucking space, and I think it will eventually use its technology to autonomously transport passengers as well. Indeed, the company has indicated in the past that it wants to eventually get into the ride-hailing business. As a result, I consider it one of the best robotaxi stocks to buy.

Mobileye (MBLY)

Mobileye (NASDAQ:MBLY) already provides systems that allow vehicles to steer and brake autonomously, so demand for the company’s products will likely skyrocket as robotaxis proliferate.

Indeed, the SuperVision system, equipped with 11 cameras, already allows the driver not to touch the steering wheel. In February, the company developed another system called Chauffeur, which also allows the driver to take their eyes off the road.

Additionally, Mobileye hopes to enable Volkswagen (OTCMKTS:VWAGIE) plans to deploy thousands of fully autonomous vans by 2026. So in just a few years, Mobileye should be selling systems that can turn vehicles into robotaxis. Therefore, I expect the company to be one of the main beneficiaries of the robotaxis era.

Additionally, as I pointed out in a previous column, Volkswagen, one of Mobileye’s major customers, has invested in two of the world’s most promising electric vehicle makers: Rivian (NASDAQ:RIVN) And Xpeng (NASDAQ:XPEV). As a result, I expect Mobileye to have a big advantage in pitching its offerings to Rivian and Xpeng.

As of the date of publication, Larry Ramer held long positions in AUR, RIVN, and XPEV. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publishing Guidelines.

As of the date of publication, the responsible editor did not hold (either directly or indirectly) any positions in the securities mentioned in this article.