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You are here: Home / Archives for Google Self Driving Cars

Maturing Industry Landscape Reshapes Autonomous Vehicle Transactions

November 7, 2018 By Tod Northman Leave a Comment

Autonomous CarsConsumers can’t yet purchase or lease a self-driving car, but Waymo’s deployment of its robo taxi fleet hints that self-driving cars may be closer to commercialization than gainsayers believe.  As a result of the progress – and the tremendous size of the potential market – corporate transactions in the autonomous vehicle technology industry have remained robust, despite the technology lagging manufacturers’ earlier forecasts.  But the types and size of transactions have shifted significantly over the past 20 months, revealing how would-be industry players assess their position in the field as they adjust their investment strategy to remain relevant.

Partnerships and Tie-Ups

AV leaders such as GM Cruise and Waymo have stayed the course, but traditional original equipment manufacturers (OEMs) are teaming up with other industry participants (other OEMs, suppliers, and startups) to try to keep pace instead of focusing exclusively on building their own AV systems.  Recent examples include:

  • a potential “alliance” between VW and Ford to work together on autonomous vehicles and potentially build cars for each other;
  • Ford’s $1-billion investment in Argo AI and subsequent courting of additional partners by the pair;
  • VW’s partnership with Intel’s Mobileye and Champion Motors to bring AV ride-hailing to Israel; and
  • Ford’s recent announcement that it is working with Baidu to test AVs in China.

Waymo pioneered the joint-venture approach.  Waymo has focused exclusively on developing the AV system while partnering with traditional automotive companies to supply vehicles.  Apple, with its ultra-secret Project Titan, appears to have a similar strategy. Tesla alone has challenged the automotive industry on its own, shunning transactions and partnerships.  It even elected to remove industry-leader Nvidia’s chips from its vehicles in favor of home-grown hardware.

Autonomous Vehicle TeslaBy contrast, Honda has pledged to invest up to $2.75 billion in GM Cruise, tacitly acknowledging its own AV efforts are lagging.  Toyota – which has dual-track AV approaches with its Guardian (driver assistance) and Chauffeur (full autonomy) initiatives – likewise has jumped into partnerships, investing in Uber and Grab and establishing a venture investment fund to pursue different strategies.

In the U.S., Uber and Lyft have built the ride-hailing industry, drawing large investments from traditional automotive industry players, such as Toyota and Honda, as well as Softbank.  Globally, Southeast Asia’s Grab and Go-Jek from the Middle East each have raised more than a billion dollars to pursue ride-hailing and other tech initiatives in their regions.

Such combinations are logical, given the powerful network effects of AV technology:  The more mileage an AV system accrues, the better it operates.  The teaming approach also draws on a principle from the aviation industry: Airlines do not want to compete on safety records.  Automakers should strive to produce the safest vehicle possible, and teaming up furthers that goal.

Acquisitions Have Slowed Dramatically

As joint ventures have increased, acquisitions of AV technology companies have dropped off the map.  Before 2017, AV startups were being bought as frequently as they were the target of OEM investments.  Even before Intel’s $15.3-billion acquisition of Mobileye in March 2017, the industry’s strategy shifted to investment in startups.  Mobileye is an outlier because Intel viewed it as a launching pad for entry into automotive. Intel may never reap sufficient benefit to justify the fancy price for Mobileye, but the alternative was sitting out the mobility revolution entirely.  Using the same theory, Aptiv (formerly parts manufacturer Delphi) nabbed AV company nuTonomy for $450 million in October 2017.  Such deals are exceptional:  In addition to these joint ventures, traditional automotive companies have shifted to strategic minority-position investment in AV suppliers in venture financings.

China leads the way on venture deals.  For example, Silicon Valley-mapping startup Deep Map is indicative of the heavy investment of Chinese companies.  Deep Map raised $60 million from the trio of Alibaba, Didi Chuxing, and automaker BAIC Group last summer for an implied valuation of more than $430 million for the two-year-old business.  Similarly, Pony.ai raised $214 million (nearly all from China) in 2018 alone, implying a nearly $1-billion valuation for the two-year-old company.

As dynamic as AV technical developments are, they are matched by the pace of the business side.  Between joint ventures and strategic investments in startups, the industry is responding to continuing challenges while reducing – but not eliminating – the enormous financial investment required to keep up.

Filed Under: News Tagged With: Apple Project Titan, Ford, GM, Google Self Driving Cars, Honda, Volkswagen, Waymo

Is There a Driverless Car in Your Future?

October 7, 2015 By Greg Horn Leave a Comment

Driverless Car Technology

A computerized chauffeur to deal with the hassles of driving? You have to admit it sounds appealing. Once the stuff of science fiction and futuristic predictions, the concept of a driverless car is quite close to coming true. Google and a number of other tech companies as well as some car makers have been hard at work to bring the vision to a city street near you.

How close? In 2012, Google founder Sergey Brin said Google’s self-driving car would be available for the general public by 2017, although last year project director Chris Urmson indicated the release might be pushed back to 2020. Still, we’re on the road to reality, and the Google technology is nothing short of amazing.

At the moment, Google has two basic forms to driverless technology: equipping existing cars such as their fleet Lexus and Prius hybrids, and manufacturing the company’s own small, plastic two-seat vehicle. Each version has roughly $200,000 of advanced electronics, computers and radar/LIDAR systems onboard. LIDAR, which stands for Light Detection and Ranging, is a remote sensing technology that uses light in the form of a pulsed laser to measure variable distances. These light pulses, combined with other data, generate precise, three-dimensional information about the shape and contours of the area in which the vehicle is driving.

But, while incredible technical progress is being made, there are some very low- and no-tech obstacles in the way of a truly driverless car.

Legal

Technology frequently advances faster than social systems, and that’s certainly the case with the driverless car. Existing traffic laws just aren’t up to speed. Many of them have been on the books for decades and all were written with the assumption that a human being would be behind the wheel.

To date, only four of our 50 states and the District of Columbia have passed laws that expressly allow driverless vehicle testing on public roads. However, they require special license plates, insurance packages and driver certification, stipulating that a certified driver must remain behind the wheel ready to assume control of the vehicle if the computer system fails.  [1] Other states are currently considering legislations.

Weather

As of August 2014, the latest prototype driverless vehicle had not been tested in heavy rain or snow because of safety concerns. [2]

Construction Zones, Debris and Human Interaction

Because driverless cars rely primarily on pre-programmed route data, they do not obey temporary traffic lights nor do they recognize construction zone routing. There are also concerns that the cars may revert to a slower, extra-cautious mode to complex unmapped intersections. Because they have difficulty identifying harmless road debris, the vehicles often swerve unnecessarily. And, the LIDAR technology cannot spot some types of potholes or discern when a human such as a police officer is signaling the car to stop.

Speed and Control

The current Google-produced driverless car has a top speed of 25 miles per hour, a threshold with some potential problems. Initially, it also lacked a steering wheel and brake pedal, resulting in an experience akin to an amusement park ride. Later models have since added brake pedals and steering to comply with the regulations of the four states that permit driverless cars.[3]

Motion Sickness

A recent study from the University of Michigan Transportation Research Institute warned that as many as 12% of passengers may experience motion sickness while riding in driverless cars.[4] While there are no remedies, the study suggested that passengers who are susceptible to motion sickness might want to try closing their eyes or sleeping, a solution demanding a great deal of confidence in driverless technology!

Accidents

As of July 2015, 23 of Google’s driverless cars had been involved in 14 minor traffic accidents on public roads, although Google maintains the driverless vehicle was not to blame in any of the incidents. Eight were rear-ended, two were side-swiped, one involved another driver rolling through a stop sign, and one was being manually driven by a Google employee. In one of the rear-end accidents, three Google employees suffered minor injuries, a first in driverless car history.[5]

What Lies Ahead?

Although it gets most of the buzz, Google’s driverless car isn’t the only one on the horizon. Several manufacturers are exploring the possibilities. Volvo, for example, has indicated they will test driverless cars in their headquarter city of Gothenburg, Sweden by 2017. German auto makers Daimler Benz, BMW and Volkswagen chipped in to buy Nokia’s “HERE” GPS system as a counter to Google. Those are serious players and encouraging news for fans of a driverless future. But let’s put this in perspective. Even if the price of driverless technology drops radically (say by 50%) as technology frequently does, by 2020 you could possibly buy a driverless car for $100,000. That’s more than three times the cost of an average new car today, more than enough to pay for taxis for several years, and the technology probably still won’t be perfect. Couple the high price tag with the fact that the average American car on the road today is 11.5 years old, and it’s safe to guess that we have a long  wait before driverless vehicles go mainstream. More likely, given the limitations of the present technology, driverless cars may initially find a use as taxis in congested urban areas like New York City where slow moving traffic is the norm.

[1] https://businessjournalism.org/2015/04/technology-and-money-3-things-to-know-about-driverless-cars/

[2] http://www.technologyreview.com/news/530276/hidden-obstacles-for-googles-self-driving-cars/

[3] http://www.carmagazine.co.uk/car-news/first-official-pictures/google/10-things-you-might-not-know-about-googles-driverless-car/

[4] http://observer.com/2015/06/self-driving-cars-will-cause-motion-sickness-often-to-always-study-finds/

[5] http://www.govtech.com/transportation/Google-Autonomous-Car-Experiences-Another-Crash.html

Filed Under: News Tagged With: BMW, Google Self Driving Cars, Lexus, Mercedes, Toyota, Volkswagen, Volvo

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