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Google and Ford are reportedly set to announce a joint venture to develop and manufacture autonomous vehicles based on Google’s self-driving car technology.
The initiative, to be announced at CES 2016 in Las Vegas this week, is part of a much broader Ford strategy to use next-generation connected cars in new consumer mobility alternatives such as automated ride sharing, Yahoo Autos said in a report Monday.
Yahoo quoted unnamed sources as describing the initiative as an “expansive alliance” that will provide Ford with access to Google’s self-driving vehicle technology. Yahoo described the Ford and Google partnership as a non-exclusive one that will likely involve several other participants from the high-technology industry.
Ford is setting up a 1,000-acre facility in North Carolina, which it will use as a proving ground for technology developed under the partnership, Yahoo Autos said, citing the same unnamed sources.
Google did not respond immediately to a request for comment on the Yahoo report.
Ford is scheduled to host a press conference at CES Jan. 5. CEO Mark Fields and CTO Raj Nair are expected to share details of the auto giant’s Smart Mobility initiative to build increasingly connected cars and alternative mobility services over the next few years.
Ford will announce several developments at the event, including its progress in areas like autonomous vehicle technology, connectivity, consumer experience and data analytics.
It is not immediately clear if Ford will use the media event to announce the Google partnership or if that will be a separate announcement.
The reported partnership could be significant for both companies. Google has made major investments in developing autonomous vehicle technologies over the past several years. The company is currently actively testing a fleet of fully self-driving vehicles designed in-house as well as several regular vehicles modified with autonomous driving technology. Google has indicated that it someday hopes to compete in the ride-sharing business using a fleet of autonomous vehicles.
Last September, Google appointed former TrueCar and Hyundai executive John Krafcik to head its autonomous car venture. More recently, Google said it would establish the operation as a separate company under the Alphabet umbrella.
Meanwhile, Ford, like other major carmakers, has been working on integrating more autonomous-car technologies into its vehicles under its ambitious and multi-faceted Smart Mobility initiative. The company has made no secret of its plans to use connected-car technology to enable new ride-sharing services using Ford vehicles in the future.
The reported partnership between Google and Ford should benefit both companies, but for different reasons, said Charles King, principal analyst at Pund-IT.”Ford’s willing participation could act as what you could call a Detroit seal of approval that would help legitimize Google’s efforts among other potential partners,’ he said.
“At the same time, Ford will gain access to what’s arguably the industry’s most mature and complete portfolio of autonomous car technologies,” King said.
While both companies can benefit from a partnership, the drivers are likely different in each case, added Ezra Gottheil, principal analyst at Technology Business Research. “For Ford, being ready for the self-driving future is critical, [but] for Google, self-driving cars are a growth opportunity.”
A partnership could contribute to Google’s core advertising business by capturing more location information, or enabling more ways for users to access Google services. “But the main opportunity, I would think, would be software licensing,” Gottheil said.
But Google and Ford like other players in this space will face major challenges, both analysts said. According to King, Google and Ford could find it challenging to overcome concerns around the safety and value of self-driving vehicles could pose. “But if partnerships like Google and Ford don’t succeed, I’m not sure what will,” he added.
Regulation, liability and insurance-related issues are going to be other big hurdles that companies will need to overcome as they attempt to deliver autonomous vehicles, Gottheil said.