General Motors (GM) is set to gain access to valuable low-cost software to boost the resolution of radars in its automated cars. Reuters reports that the company’s venture capital arm has invested millions of dollars in Oculii, a maker of radar sensors software used in self-driving cars. GM shares rose 2.69% to close at $50.82 on September 13.
General Motors is a U.S. automaker that designs, manufactures, and sells cars, trucks, and automobile parts worldwide.
The investment affirms General Motors’ commitment to developing self-driving cars featuring radar sensor technology. Radars are crucial in autonomous vehicles as they measure the distance between objects, enabling cars to accelerate or brake depending on how far or close objects are.
Radars have also proven to be ideal for navigation in adverse lighting and weather conditions. However, they have also been called into question for not being accurate in measuring the environment and compromising its vision system. (See General Motors stock charts on TipRanks)
Tesla (TSLA) eliminated radar sensors from its autonomous cars this year. The move continues to raise concerns about the safety and performance of the company’s self-driving software. In defense of the move, CEO Elon Musk reiterated that radars and lidar are simply crutches, opting rather to settle on cheaper cameras and artificial intelligence-powered navigation systems.
Yesterday Barclay’s analyst Brian Johnson reiterated a Buy rating on General Motors and lowered the price target to $68 from $71, implying 33.81% upside potential to current levels. According to the analyst, chip shortages in the auto industry continue to drive the company’s wholesales lower in North America. However, the analyst expects the automaker to deliver quarterly results inside its guidance range.
Consensus among analysts is a Strong Buy based on 13 Buys and 1 Hold. The average General Motors price target of $73.36 implies 44.35% upside potential to current levels.