Mizuho recently hosted its Auto Tech Seminar at the Classic Car Club Manhattan, but the technologies up for discussion can be described as anything but classic. From light detection and ranging (LiDAR) to electric vehicles (EVs), the latest trends are more Star Trek than Buick Skylark.

So with what cutting-edge tools might your next car be equipped? Mizuho Semiconductors and Automotive Technologies Senior Equity Research Analyst Vijay Rakesh breaks down (figuratively, of course) the experimental world of auto tech and the seminar takeaways.

Lights, Camera, Detection

Although we are only in the early stages of autonomous driving, auto and related tech companies face significant regulatory hurdles, namely legislative pushback related to self-driving vehicle accidents, the impact of automation on jobs, and public resistance due to a lack of trust in autonomous systems. Cyber security threats introduce a slew of other concerns, including the fear that a security breach could lead to a deliberate and coordinated mass failure on the road.

But some of this is putting the cart before the horsepower. First, we have to see that the technology even works to meet the incredible burden of guiding multi-ton metal machines down neighborhood streets, through crosswalks, past schools, and on highways at speeds of 75 miles per hour or more.

That calls for incredibly sensitive recognition capabilities, so tech companies are putting serious resources behind smart sensor and detection systems leveraging LiDAR technology. LiDAR, a method that uses a pulsed laser to measure distance to a target, is now considered a necessary component for Advanced Driver-Assistance Systems (ADAS) and self-driving cars, providing a layer of redundancy to camera and radar-only sensor fusion.

At the Mizuho seminar, a Silicon Valley-based LiDAR technology company noted that the laser technology can see both ‘hard bodies’ (stationary objects) and ‘soft bodies’ (such as humans and animals), while high resolution radar still has trouble with the latter. This level of detection is particularly important for achieving advanced levels of automation. These are known as L4 and L5 driving levels: An L4 vehicle can complete an entire journey without driver help, but with some limitations on such things as range and speed, while an L5 vehicle is the pinnacle, with no human intervention at all, not even a steering wheel, pedals or joysticks. The car, reimagined as one large passenger seat.

For context, Veoneer, an ADAS and safety electronics company, noted at the seminar that 75 percent of global vehicle sales are L0, with L1 and L2 likely to make significant inroads into the market by the end of 2025. We are clearly in the early innings of automated driving.

Rakesh also points out that LiDAR is expensive, with products having an average selling price of approximately $10,000, but pricing is likely going to decrease in the near future. However, at this stage of autonomy, costs are not the primary concern – safety is. Until that is assuaged, nothing much else matters.

Technology Takes the Wheel

Autonomous driving simulations and EVs were also popular trends noted at the seminar. One startup focused on simulation work is seeing opportunities across most original equipment manufacturers (OEMs), as some are conducting more training and testing to achieve safe autonomy. While the company does not see simulation as a complete replacement for physical testing, Rakesh believes the ability to run simulation provides OEMs a more efficient method for testing.

EVs have also been popular among OEMs as companies begin looking for ways to improve battery range and charge time of their fleets. Expert Jeff Hannah from SBD Auto noted the price of cobalt and lithium are key drivers for higher battery costs and charging infrastructure. He noted the cost of approximately three EVs can be equivalent to that of powering a home, thus hindering widespread adoption. However, if gasoline prices were to become significantly higher than they are today, the EV landscape could become more attractive down the line.

 

Mizuho Americas is a leading financial institution comprising several legal entities that offer services which include corporate and investment banking, financing, securities, treasury services, asset management, and research. If you are interested in learning more about Mizuho's Equity Research offerings, please call Mizuho Securities USA LLC at +1-212-209-9300.