Last week, investors received a surprise welcome breakfast. Mobileye (NYSE:MBLY) went up 30%.

Intel, the mega-chip company, decided to buy Mobileye, a developer of automotive sensors, in a $15 billion deal, quickly making big profits.

Thing is, if you look behind Intel’s decision to buy Mobileye, you’ll see a topic that I’ve been telling you about for some time: self-driving cars, which are a critical component of the Internet of Things mega-trend that’s unfolding in this moment. And as you can see, it’s making people huge amounts of money fast.

Now, there are two developments related to the autonomous car topic that have the same potential and are also happening right now.

Rise of the machines

You see, the car is transforming from a mechanical machine, meaning it’s powered by things like pistons and gears, to one that’s electronic. Second, the car is becoming a machine that is connected to the Internet all the time, and so connectivity is something that can be used as a shared resource.

Related to these things is the fact that, due to laws that have been passed around the world, virtually all car manufacturers are preparing to make most cars electric.

So, in other words, the whole way of making a car will be uprooted and changed.

This means that it is a time of incredible opportunity and, equally, tremendous risk.

The companies that make the components that will go into this electronic, connected, shareable and eventually electric car will undoubtedly benefit.

And the companies that stay behind, betting on mechanical, disconnected, unshareable and gasoline cars, are going to go bankrupt.

The model of the future

I think the key moment will come later this year when Tesla launches its Model 3 car.

The reason I think Tesla’s Model 3 is the key is because it’s going to be the first car that has pretty much all the things I’ve mentioned. It’s electric, packed with electronics rather than mechanical, and has the latest in self-driving capabilities. Model 3, like all Tesla cars, is connected to the Internet non-stop.

According to news reports, more than 400,000 people have reserved a Model 3. Now, remember that these reservations are high commitment: you had to make a $1,000 down payment to do so. And the list price is $35,000.

When you do the math, that means the Model 3 is being set up to be a $14 billion product from the get-go.

Now, $14 billion sounds like a lot, but it’s nothing compared to the $147 billion General Motors is expected to generate in sales in 2017.

So in terms of overall car sales, Model 3 sales are a drop in the bucket.

the race is on

What will really surprise investors is how profitable the Model 3 will be compared to mechanical fuel-powered cars. That’s because, aside from the battery, components like the ones in your computer are much cheaper than the mechanical ones that go into your car.

And when investors see this, all hell will break loose. You will see the shares of some electronic component manufacturers soar and the shares of mechanical automakers and their suppliers plunge.

I think deals like Intel buying Mobileye, GM buying self-driving car startup Cruise Automation for over $1 billion in March 2016, and Ford buying a similar startup, Argo AI, for $1 billion, as well as other events with Google and Uber, everything is because the starting signal is about to sound in the race for dominance of the electronic, electric, connected, shareable and autonomous car. And people expect the race to be very close between tech companies like Google and Intel, and auto companies like GM, Ford, Tesla and others.

However, I think the smart bet on this new type of car is an investment in the electronic guts of the car. And I still believe that. You can expose yourself to many of the companies that make these electronic casings by buying the VanEck Vectors Semiconductor ETF (NYSE Arca: SMH).