Top 5 US Future Transportation Stocks

Pursuit of efficiency helps capture future airline demand.

• If you picture what the future of long distance and overseas travel looks like, it’s hard to imagine anything different to our current aircraft fleet. Over the years there have been numerous developments in commercial air travel but at its core, the fundamentals of air travel have remained the same. However, we have seemingly arrived at a new frontier. The pursuit of the most efficient aircraft. The exterior facade may not change too much in the near future, but industry-leader Airbus is revolutionizing what’s under the hood, leading the way in helping the industry develop and commercialize new technologies that support its environmental goals. Airbus believes that air travel’s future is not only autonomous, but zero-emission. Many of Airbus’ recent patented technical developments have been in the pursuit of efficiency propulsion. Airbus has recently revealed three liquid hydrogen-fueled ZEROe prototype aircraft. If Airbus’ concept can achieve commercial viability, then it could become the first commercial zero-emission aircraft, entering service by 2035 - a huge win for Airbus in the closely competitive aerospace market.

Market leader in LiDAR technology for autonomous vehicle applications.

• The most dangerous element of a vehicle is the operator. Humans are error prone, distracted and have slow reaction times. A safer way to travel in the future may be autonomously, where our vehicles drive us from A to B in a safer way that allows us to devote time elsewhere - like work or rest. Aptiv, a global leader in vehicle technology, has partnered with Hyundai to integrate Aptiv’s advanced LiDAR system into vehicles to allow for autonomous driving. One of the key future growth drivers for Aptiv will be capturing market leadership in the autonomous vehicle segment. Given McKinsey forecasts that autonomous vehicles will account for up to 66% of passenger kilometers traveled in 2040 and the sales of autonomous vehicles are expected to account for a $900B market, there is plenty of opportunity ahead for Aptiv. Aptiv’s role as a provider of vehicle technology to OEMs is beneficial in that it gives them the opportunity to partner with various manufacturers to take their technology to market in different regions across the globe.

Electric vehicles at an affordable price point.

• The writing’s on the wall for internal combustion engines (ICEs). Automakers are shifting focus to battery electric vehicles (EVs) and there’s an almost unanimous push to halt the production of ICEs within the next 10-20 years. When it comes to EVs, Ford isn’t necessarily the first to market, nor the most dominant manufacturer. At present, Tesla (NASDAQ:TSLA) has a first grasp on the EV market producing roughly 250,000 units per quarter. The opportunity for Ford lies in their ability to compete with the likes of Kia and Hyundai to deliver consumers with a reasonably priced entry to EV ownership. Bank of America anticipates that GM and Ford will outpace Tesla in sales by 2025 and with Ford’s plans to have 7 new EV models by 2026 gives consumers a high degree of flexibility in price point and utility among EVs. Given Ford has the highest showroom replacement rate of any US auto manufacturer, these new model EVs should find themselves in showrooms at a much greater rate, which should help secure market share among new adoptees.

Mobility and charging solutions for the changing urban landscape.

• Our cities are growing in size, population and density. Projections from the UN show that by 2050, an additional 2.5B people will be living in cities. Seeing as congestion, pollution and costs of vehicle ownership are already a concern, the additional population living in cities will only exacerbate the issue. Micro-mobility makes an argument for being the ideal transportation method to help alleviate some of these issues. In the US alone, the micro-mobility market is predicted to be worth between $200B-$300B by 2030 suggesting that its gearing up to be a part of the fabric of our transportation network. Further than being one of the most energy efficient modes of transport, e-scooters like Gogoro’s can reduce the amount of cars on the road, lower carbon footprint and provide easy transport for short trips in an urban environment.
• Beyond being a manufacturer of electric scooters, Gogoro operates a network of rechargeable lithium battery grids specifically for e-scooter batteries. Popular in Taiwan and branching out into surrounding countries in the Asia region, Gogoro’s subscription charging service has the advantage that the batteries being used are compatible with several different manufacturers so they have a revenue stream that’s aligned with the success of the micro-mobility sector as a whole, regardless of the manufacturer of choice for consumers.

The growing demand for public transport means growing demand for Wabtec’s services.

• Analysts anticipate the number of cars on the road is expected to double by 2040 and so questions around whether our road infrastructure can support the increased traffic volume arise. Studies into different passenger efficiencies have shown that suburban rail handles an average of 60,000 passengers per hour compared to 1,500 per hour that mixed vehicle traffic can support. A shift to greater public transport use may not only be helpful but absolutely necessary to support the population. Greater passenger volumes on public transport - particularly suburban rail - require greater infrastructure, more frequent servicing and more carriages/components. Given that Wabtec helps develop efficient braking systems, HVAC solutions and energy solutions for rail locomotives and buses, they should see some handy top line growth that aligns with an increase in passenger volumes for bus and rail transit.