Toyota to Develop Cheap Self-Driving Cars

Japanese automaker Toyota Motor (TM) has discovered that it can use low-cost cameras to develop a self-driving system that performs just as well as systems based on Light Detection and Ranging (Lidar) and other expensive sensors. Toyota is developing autonomous cars through its Woven Planet subsidiary.

Although Alphabet’s (GOOGL) Waymo unit and many other companies use lidar in their self-driving cars, the technology is expensive, which in turn makes scaling self-driving tests difficult because only a small fleet of cars can be deployed to collect data to train the systems.

Toyota’s Woven Planet has tried low-cost cameras that are 90% cheaper than sensors like lidar to collect the data to train its autonomous driving system, according to a Reuters report.

Toyota Taking a Long Shot With Cameras for Self-Driving Cars

However, it may take time before camera technology reaches lidar and other sensors’ levels of safety and reliability. As a result, Toyota will for now continue to use lidars, radars, and other sensor technologies for autonomous vehicles it brings to the road.

Woven Planet’s Vice President of Engineering, Michael Benisch, said, “But in many, many years, it’s entirely possible that camera type technology can catch up and overtake some of the more advanced sensors.”

Toyota and Tesla Agree on Camera Technology for Self-Driving

Elon Musk-led Tesla (TSLA) has also bet on camera technology to power its self-driving system. Tesla even expects to offer its customers fully autonomous driving capability based on cameras as early as this year.

Autonomous vehicles have a variety of potential applications. Many self-driving companies, including Waymo and General Motors’ (GM) Cruise, have targeted the rideshare market.

Wall Street’s Take

The Street is cautiously optimistic about Toyota stock with a Moderate Buy consensus rating. That’s based on one Buy rating. The average Toyota price target of $210 implies 19% upside potential to current levels. Shares have increased 15% over the past year.

Blogger Opinions:

TipRanks data shows that financial blogger opinions are 100% Bullish on TM, compared to a sector average of 69%.

The Takeaway for Investors

High costs can be a barrier to adopting new technologies like self-driving cars. If Toyota’s camera technology proves to be a success, then it could allow the company to produce affordable autonomous cars and even dominate the self-driving car market. It looks similar to how General Motors and Honda are counting on cheap electric cars to enable them to overtake Tesla in the global electric vehicle market.

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