Who Wins If Ford and Google Partner?
Industry insiders have long speculated that Silicon Valley's technology firms would eventually team up with Detroit's big automakers to develop self-driving vehicles.
So with sources at Ford and Google confirming the companies are in talks about forming a partnership, it begs the question: Which company would get the better end of the deal?
Though both companies would claim a win if a deal were to take shape, at least one analyst is questioning if Ford would be making a deal with "a wolf at the door."
In a note to investors, RBC Capital analyst Joe Spak went on to write that his firm thought automakers "would be reluctant to hand over the keys to Google (or another tech player), as this moves [them] down the path of being a contract manufacturer."
That would make it more difficult to sell vehicles on brand, Spak explained, referencing trends seen among computers and mobile phones. He admitted, however, that it could simply be an expansion of Ford's Smart Mobility plan, which aims to explore new business models.
To be sure, both companies would stand to gain in one way or another from a partnership. By working with a global manufacturer like Ford, Google's auto program would get a big boost that could help it accelerate the development of self-driving cars on a large scale.
Meanwhile, Ford's expertise in autonomous-drive vehicles would surge by working closely with Google, which has already built self-driving vehicles that have logged more than a 1.3 million miles on roads in California and Texas.
Details about the possible partnership are limited, as both companies declined to comment on the talks. According to industry sources, if a partnership were to take shape, it would not be exclusive. In any case, make no mistake: Automakers and tech companies are about to team up in more complex ways.
Just a few months ago, Google gave a group reporters brief test drives in its latest autonomous drive vehicles. At the time, Chris Urmson, director of Google's self-driving car project, said the company's goal was to "get this technology out so that everyone can use it."
"We think the right way to do that is in partnership with those folks, you know the car companies of today, who make these vehicles, do [an] amazing job doing it and have been doing it for 100 years."
What automaker has been making cars and trucks for more than a century? Ford.
Ford has weathered major challenges over the years, from surviving The Great Depression, to converting its plants to build B-24 Bombers and military vehicles during World War II. Now, the challenge is making sure Ford is ready for the biggest transformation the auto industry has seen in decades.
CEO Mark Fields knows the road to an autonomous-drive future runs through Silicon Valley.
"There is a lot of interest in [self-driving cars] and a lot of innovation going on," he recently told CNBC from the company's new research and development facility in Palo Alto, California. "That is why we are here, because we want to be part of this community."
Fields is well aware of what's at stake for his company and has said repeatedly that Ford should seek partners in the tech world, not run from them.
In partnering with Google, he would be betting on a relationship that pays off with self-driving cars that could make Ford a leader in the next-generation of vehicles.
Broadcast Media Professional
8 年Do people need driving tests for self drive cars?are they safe ?
Lecturer at Polytechnic West
9 年In this case , the people will win with a far superior and safer mode of travel. The losers however, will be the motoring enthusiasts, and yes , I happen to be one of those.
Project Manager ?? BAE Systems SDT
9 年they should call it FORGLE
Automobile wires at mulitcraft tech.
9 年Ford Motor Company
Modularisation Research and Technology Lead - Rolls-Royce SMR Ltd
9 年Ford is doing this because once self-driving vehicles become mainstream there will be a massive consolidation of the car industry. Eventually self-driving cars will be totally autonomous; they will be summoned on demand like taxis via an app. Cars today spend around 95% of their time sat in car parks depreciating, once an autonomous car has dropped you off it can go and pick someone else up. As a result they will have a much higher utilisation meaning that they would be much cheaper per mile than a manually driven car. (Even if the car itself is more expensive to buy). In addition to being cheaper than owning your own car you don’t have to find a place to park it. As the car is now a taxi rather than your own personal property it goes from being a consumer product to being a public utility. Most of what differentiates car makers from each other, the driving experience, the styling, the brand promise ceases to be important. Instead what the autonomous car operator cares about is capital cost, operating cost, durability and reliability. The higher utilisation also means we’d need around about 1/8th the current number of cars to cover the same number of passenger miles. We would have a significant over capacity of car production. In the long term then self-driving cars are a massive disruption to the automakers. In all likelihood there will be a limited number of approved car control systems, Google/Apple/Tesla will probably own these. Uber and it’s competitors will probably own the system for dispatching the cars. This leaves the automakers in the commoditised world of supplying the vehicles, where the most expensive bit, the electric driveline, will probably be supplied by Tesla or similar. Make no mistake autonomous cars will destroy value in the automotive industry. What Ford is doing by partnering with Google is trying to make sure that when the automotive industry consolidates they will be at least partially in the driving seat (no pun intended). Potentially car makers could move to be owner/operator/procurement agent of vast fleets of autonomous cars. For society this development is likely to be substantially more positive than negative. Mobility will be cheaper and available to far more people, the old, the young and the drunk. Large areas of our cities and towns currently set aside for parking cars could be used for something else. Safety will be much improved and expect all autonomous cars to be electric as range anxiety is no longer a problem, a car with a sufficient range will be dispatched to you. Manually driven cars will go the way of the horse, used primarily to enjoy one’s self not for transport, some these cars may even be made by the Ford Motor Company…