Racing to Autonomous Driving
Driving assistance technology, such as safety features, is saving lives and reducing costs associated with accidents. It’s also an important step in the high stakes race to develop autonomous vehicles. As firms aggressively work to develop self-driving vehicles, they are creating new investment opportunities among companies that provide sensors, computing platforms, semiconductors and software.​

Chart on Improvements at Truckload Company Due to Emergency Braking ​

  • At a major truckload company, emergency braking systems, which is just one form of driver assistance technology, resulted in a 69% decrease in rear-end accidents and a 95% reduction in rear-end accident claims costs. Other features, such as lane keep assist, are also helping to keep drivers and passengers safe.

  • Driver assistance technology has become common in new cars and advances are occurring at an accelerating pace as big companies are burning rubber in the race to develop autonomous vehicles. For the first nine months of 2018, CB Insights tracked $5.8 billion in autonomous driving investments including Softbank pumping $2.25 billion into GM’s self-driving program and Toyota investing $500 million in Uber. Additionally, Volkswagen is planning to plow $2 billion into Ford’s self-driving vehicle program.
  • The race to develop autonomous vehicles is creating new investment opportunities by increasing demand for technology including sensors, computing platforms, semiconductors and software. Autonomous driving also requires an evolution in surrounding infrastructure such as traffic lights that communicate with vehicles and vehicle-to-vehicle communication. The companies that are paving the way for autonomous driving may be worth investors’ consideration.

The following positions represented the noted percentages of Alger’s assets under management as of February 28, 2019: Wabco Holdings Inc., no position; SoftBank Group Corp., no position; General Motors Co., less than .01%; Toyota, no position; Volkswagen AG, no position; and Ford Motor Company, no position.

​The views expressed are the views of Fred Alger Management, Inc. as of March 2019. These views are subject to change at any time and they do not guarantee the future performance of the markets, any security or any funds managed by Fred Alger Management, Inc. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities.

Risk Disclosures: Investing in the stock market involves certain risks, and may not be suitable for all investors. Growth stocks tend to be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. Technology companies may be significantly affected by competition, innovation, regulation, and product obsolescence, and may be more volatile than the securities of other companies.​​​

This material must be accompanied by t​he most recent fund fact sheet(s) if us​ed in connectio​n with the sale of mutual fund shares.

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