Google Spins Out Autonomous Vehicle Unit Into Independent Company

Waymo, Google's newly independent self-driving car venture, will focus on selling self-driving car technology to automakers and others, CEO John Krafcik said.

Waymo driverless cars 2

Google's move this week to spin out its self-driving car project into an independent entity called Waymo suggests the company is finally close to commercializing the technology after years of research and testing.

Waymo will operate as an independent company under the Alphabet umbrella and focus on delivering technology that, according to its CEO John Krafcik, will make it "safe and easy for people and things to move around."

In post on the Medium news website, Krafcik explained that mission as one where Waymo will deliver autonomous vehicle technology for use in personal vehicles, ride-sharing services, the logistics industry and public transportation. "In the long term, self-driving technology could be useful in ways the world has yet to imagine, creating many new types of products, jobs, and services," he said.

Notably missing from Krafcik's description of Waymo's mission was any mention of the company's intention to build its own self-driving vehicles either now or in the future.

Up to now at least, Google's work on autonomous vehicles has always included tests of vehicles from other car manufacturers fitted with its self-driving technology as well as of fully autonomous, driverless vehicles that the company has developed on its own from scratch.

Images of Google's small, capsule-shaped vehicles without a steering wheel or pedals have in fact become synonymous with the company's efforts in the self-driving vehicle space. Some had expected the company to enter the ride-sharing business using a fleet of driverless vehicles while others had expected to see Google vehicles being used for campus, airport and public transportation settings.

That Google appears to have backed off plans to build its own driverless vehicles signals a new direction for the company, The Information reported earlier this week quoting unnamed sources.

Larry Page, the CEO of Google parent Alphabet, and its chief financial officer Ruth Porat apparently found the company's plans to build its own autonomous vehicles too impractical. They wanted the effort to be focused instead on delivering autonomous vehicle technology to automakers, the Information had noted.

The strategy makes sense, said Ezra Gottheil, an analyst at Technology Business Research Inc.

"I expected from the start that Google or Alphabet would partner to deliver its autonomous technology," Gottheil said. "Creating an automobile business is a tremendous effort and investment. It involves engineering, designing, and marketing the cars themselves, creating the factories, setting up a sales and service network and, if you succeed, only serving part of the market."

By choosing to develop and sell autonomous vehicle technology to automakers instead, Waymo has put itself in a position where it has an opportunity to grab a larger share of the global market for such technology, he said. "For Alphabet, this is much better than making, selling, and servicing cars."

Even prior to this week's announcement, Google has been making moves to see if it can get major automakers to integrate the company's autonomous technology into their vehicles.

Earlier this year for instance, Google entered into a collaborative partnership with Fiat Chrysler Automobile. Engineers from both companies are currently working on equipping a fleet of 100 Chrysler Pacifica Hybrid minivans with self-driving technology. The companies hope to begin road tests of the vehicles as early as 2017.

Google is by no means alone in its quest to make vehicles smart and more autonomous. In fact, many think the company has lost its early lead in the field to a slew of other more aggressive and better-placed rivals most notably Tesla, General Motors, Ford, Nissan, Mercedes-Benz and BMW.

Some like ride-sharing giant Uber and MIT spinoff nuTonomy have even begun limited rollouts of fully self-driving vehicles while Google's effort has remained mostly in the testing phase, at least up to now.

Jaikumar Vijayan

Jaikumar Vijayan

Vijayan is an award-winning independent journalist and tech content creation specialist covering data security and privacy, business intelligence, big data and data analytics.