First it was electric vehicles, then driverless cars began getting all the media attention. However, we could soon be entering a whole new dimension in terms of how we travel.
Audi is launching an all-electric vehicle in 2018 and BMW (OTC: BAMXY) is expected to bring something to market in 2012. Volkswagen (OTC: VLKAY), which has been rocked by an emissions cheating scandal, is investing heavily in electric vehicles and plans to work on making SUVs and larger cars electric.
Then there’s the slew of driverless-car partnerships we’ve seen among tech companies and automakers, including Apple (NASDAQ: AAPL), Uber, Lyft, General Motors (NYSE: GM) and Fiat Chrysler (NYSE: FCAU).
Alphabet’s (NASDAQ: GOOGL) Google has a deal with Fiat to build a fleet of self-driving cars. It hopes to make them available to the public by 2020. Google is also experimenting with a driverless taxi service for its employees.
Yet all of the electric and self-driving car buzz might be eclipsed by something that Google co-founder Larry Page is personally working on. Page has been quietly funding two flying-car companies. One is Zee.Aero and the other carries the apropos name Kitty Hawk.
Zee.Aero is located right beside Google’s headquarters in Mountain View, Calif. Page has been personally funding the company since 2010. It’s already test-flying prototype cars.
Kitty Hawk just started operating last year. It’s located within a mile of Zee.Aero’s office and is run by the so-called godfather of Google’s self-driving car program, Sebastian Thrun.
Mark Moore, a NASA aeronautical engineer, believes that self-flying cars could be closer to mass adoption than self-driving cars.
“Self-flying aircraft is so much easier than what the auto companies are trying to do with self-driving cars,” Moore told Bloomberg Businessweek earlier this month.
Page is friends with Tesla Motors’ (NASDAQ: TSLA) Elon Musk, and both men have dreams of reinventing the transportation industry. Page has said before that he’d like to take more risky bets like Musk. It appears he’s doing just that.
But the key for playing any new trend is that it’s not about who will be the first or the biggest. Rather, it’s the companies that will benefit regardless of who wins that you want to invest in.
For instance, no matter which companies win the space race to build flying cars, all those cars will need certain parts, like seats and safety equipment.
Flying Under the Radar
Lear Corp. (NYSE: LEA) is the No. 2 company in the global seat market. It’s focused on the premium-vehicle segment, where it believes it’s the global leader for luxury seating. And what’s more premium than a flying car?
Then there’s its other segment, which finds its way into most vehicles: electrical systems. Lear is the No. 4 global leader when it comes to electrical architecture.
Autoliv Inc. (NYSE: ALV) is a maker of safety systems and solutions, including seat belts, airbags, auto radars, crash sensors and restraint electronics.
Autoliv should be a big winner from increased demand in safety standards and the rising amount of safety content being installed in vehicles. As cars become more autonomous and push the limits, safety will be a chief focus and concern.
Riding Google’s Coattails
Google, which is known for its “moonshot” projects, has already made significant inroads in the self-driving car industry. While Larry Page’s flying-car bet isn’t directly a Google venture, it’s hard to see how a flying-car company hits scale without Google’s help. This could mean a buyout sometime down the road.
Regardless of whether Page formally parks his flying-car endeavor under the Alphabet umbrella, Google is one of the best-positioned companies to take advantage of the future for the auto industry.
However, the broader bets on the flying-car industry include parts and necessity makers like Lear and Autoliv.