New technologies like AI and generative AI are at an inflection point, infiltrating our daily lives from work to play. Tools like ChatGPT have become household names, with each iteration bringing astonishing improvements. However, flying more under the radar is the progress being made in autonomous transportation. As the utilisation of data improves, so too does the future of transport.

While generative AI garners much of the spotlight, the advancements in autonomous vehicles are steadily transforming the landscape, particularly in areas like Tesla’s (NASDAQ: TSLA) Full Self-Driving (FSD) software, drone deliveries, and safe autonomous ride-hailing services. These developments, though less publicised, hold significant potential to reshape our daily lives and the broader economy.

Tesla’s driver assistance features, known as Autopilot or Full Self-Driving (FSD), are designed to enhance driving convenience and safety, although they still require active driver supervision and are not yet fully autonomous. Since its rollout in 2020, FSD has steadily improved, incorporating features such as self-parking, auto lane changes, and traffic navigation.

Elon Musk has consistently emphasised the potential of FSD technology to revolutionise the automotive industry. While the journey towards a fully autonomous driving experience has faced regulatory and legal scrutiny, significant progress has been made, particularly in addressing safety concerns and enhancing system reliability.

In China, Tesla has been offering FSD on a subscription basis for four years, albeit with a restricted set of features. Data security has been a crucial factor in this gradual rollout. To advance the technology, Musk is working to obtain official approval for transferring data collected in China abroad, which is essential for training the algorithms behind autonomous driving.

Recent developments signal promising progress for Tesla’s FSD in China. The company’s Model Y and Model 3 vehicles were recently included in a list of 76 car models compliant with China’s data security requirements by a top Chinese auto association. This compliance is a significant milestone, paving the way for a potential launch of unrestricted FSD in China.

Tesla’s presence in China has grown significantly, with over 1.7 million cars sold since entering the market a decade ago and its Shanghai factory being the company’s largest globally. The anticipated rollout of unrestricted FSD could transform the Chinese market, enhancing the competition for cost-effective driver assistance features and intensifying the price dynamics that Tesla initiated early last year.

Moreover, Tesla’s agreement with Baidu to use the tech giant’s mapping licence for data collection on China’s public roads marks another step forward. This collaboration will allow Tesla to leverage advanced mapping data, further refining its autonomous driving technology and bringing the promise of fully autonomous vehicles closer to reality.

Alphabet’s (NASDAQ: GOOG) subsidiary Waymo recently made headlines by announcing that it now provides 50,000 paid autonomous ride-hailing trips per week across three cities. This achievement follows more than a year after Waymo surpassed one million paid trips.

Waymo launched its autonomous ride-hailing service in Phoenix in 2020, now covering 225 square miles 24/7. In 2022, it expanded to San Francisco with paid rides and no safety driver, and plans to gradually extend across the peninsula. This year, Waymo began 24/7 services in Los Angeles, covering 63 square miles, and started testing in Austin, Texas, with plans to launch a paid service there by year-end.

The technology powering Waymo’s autonomous ride-hailing service is classified as SAE (Society of Automotive Engineers) Level 4, significantly more advanced than the SAE Level 2, or semi-autonomous, technology used by Tesla. Waymo’s system utilises high-definition maps and lidar, allowing the vehicle to pinpoint its exact location within centimetres. These precise maps also define the specific areas and routes where the autonomous vehicles can operate without a driver.

A recent study of the first 7 million miles of Waymo’s autonomous driving through October 2023 revealed significantly lower accident rates compared to human drivers. The study showed a 0.41 accident rate per million miles involving any injury for Waymo, versus 2.78 for human drivers. Key findings include:

• An 85% reduction in crash rates involving injuries (0.41 vs. 2.78 per million miles).
• A 57% reduction in police-reported crash rates (2.1 vs. 4.85 per million miles).

​Over 7.1 million miles, this equates to 17 fewer injuries and 20 fewer police-reported crashes compared to human drivers.
Waymo’s steady progress in expanding its autonomous ride-hailing service and improving safety metrics underscores the potential of autonomous transport to significantly enhance road safety and transform urban mobility.

The use of drones for delivery services is gaining momentum, with companies like Zipline International and Amazon (NASDAQ: AMZN) leading the charge in revolutionising the logistics industry.

Zipline is an American company that designs, manufactures, and operates delivery drones. It has established distribution centres in Africa, Japan and the United States. As of April 2024, Zipline’s drones have made over one million commercial deliveries and flown more than 70 million autonomous miles. The company’s drones are primarily used to deliver medical supplies, including whole blood, platelets, frozen plasma, cryoprecipitate, vaccines, infusions, and common medical commodities.

If Zipline’s autonomous software were a human pilot, it would have accumulated over 120 years of flight time. These zero-emission drones have delivered more than 10 million products across four continents. The demand for Zipline’s services continues to grow, with the recently announced Platform 2 system set to deliver orders for Panera Bread, Memorial Hermann Health System, and Jet’s Pizza in the greater Seattle, Houston, and Detroit metro areas, respectively.

The advancement of technologies such as computer vision, simultaneous localisation and mapping, and reinforcement learning is further driving the integration of AI in drone controls.

Amazon announced last month the expansion of its drone delivery service, Prime Air, to Arizona. This follows previous rollouts in California and Texas, with plans to extend services to the UK and Italy soon. Launched in 2013, Prime Air aims to deliver small household items such as electronics, beauty products, and prescription medications in 30 minutes or less. Semi-automated drones fly out from depots stocked with products, similar to traditional delivery vehicles.

These developments in drone delivery services highlight the growing role of autonomous technologies in transforming the logistics landscape, making deliveries faster, more efficient, and environmentally friendly.

The progress in autonomous transport is steadily transforming the logistics and automotive industries. These advancements, though sometimes under the radar, are reshaping the way we work and live, promising safer roads and more efficient deliveries. Savvy investors should continue to watch closely – as the technology evolves and matures, there could be potential for extraordinary returns for those who back the right players.

Disclaimer: Alphabet’s (NASDAQ: GOOG) ​and Tesla (NASDAQ: TSLA) are held in TAMIM Portfolios as at date of article publication. Holdings can change substantially at any given time.