Will Google Make Their Own Car?

Saturday, August 24, 2013

Will Google Make Their Own Car?

 Self Driving Cars
After working on collaboration agreements with major auto manufacturers to bring self-driving car technology to the masses seems to have stalled, there is increasing chatter that Google may be on the path to developing it's own line of cars.

It  has been reported  that in recent months, Google has held talks with contract manufacturers to build new cars to Google’s specifications.  This comes after Google’s talks with the major car manufacturers about incorporating its technology into their vehicles have fallen through.

Google, which has been working on systems for self-driving cars, now appears to be developing their own brand of a self-driving car.

Considering the recent successes at Tesla Motors, it is not that surprising that an internet-based company might find a new paradigm for economic growth in the established auto industry.

Google has increasingly been involved in hardware with their Nexus line of tablets, Google Glass, and the explosive new Chromecast dongle.  This experience with global supply chains and technologically advanced products might translate well to automobiles.

The move to manufacture their own cars might also tie-in well with Google's latest large investment in Uber.  Google Ventures, Google’s supposedly early-stage investment arm, just pumped more than $250 million into the on-demand car service.  Moreover, as it competes with Amazon, the investment in Uber and self-driving cars may push the developments in same-day delivery services.

The company also has a novel idea for what it could do with these cars. As well as selling the self-driving vehicles to individuals, it also has focused on the potential for an autonomous car it designs to become part of a “robo-taxi” fleet.

In the robo-taxi scenario, the vehicles would pick up passengers on demand. Google believes that such systems could potentially reduce the need for people to own cars and reduce accidents. Whether Google would try to operate such services on its own, as a spin-off or subsidiary company is unclear.

Amir Efrati reports that, Google has been talking to major auto-components companies, such as Continental AG and Magna International, to manufacture a car under Google’s direction. Just like supply-chain company Foxconn helps Apple and other hardware companies build phones and computers, these companies provide components to big automakers and help them assemble vehicles.

On Thursday Germany newspaper Frankfurter Allgemeine Zeitung said Google was nearing a deal with Continental, one of the world’s largest auto-components suppliers, to create a self-driving car system.

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By 2017 at the latest, people in California (and other states that allow them) could buy self-driving cars, said Sergey Brin, one of the founders of the Internet Group, last year. Brin emphasized that Google was still intent on collaboration with established manufacturers.

Google’s search for a manufacturer shows how cars could become the latest piece of the hardware industry to be commoditized, much like computers and mobile devices have been.

Whether Google will go ahead and partner with a contract manufacturer to build a car to its specifications remains unclear. The company is still seeking to partner with well-known automakers, one of the people familiar with the effort said.

Considering the “do-it-yourself” efforts at Google in the past however, the company has designed its own phones and laptops, in large part to encourage existing hardware makers to follow its lead and adopt new aspects of its Android mobile operating system and Chrome software.

By designing its own car and commissioning manufacturers to make it, Google is preparing to open a direct rivalry with established auto brands in Detroit and overseas that also use component makers to make their cars but have a different vision for how autonomous navigation technology should be used.

People familiar with Google’s project say the company doesn’t believe most of the major auto brands actually want to build a fully autonomous car.

Auto executives including Dieter Zetsche, chief executive of Daimler AG, owner of Mercedes Benz, have said as much. At an event earlier this summer, Zetsche reportedly said that his company wants to automate the boring elements of driving, such as being stuck in traffic, but would “never automate the cool part of driving.”

The economics of direct sales to consumers or robo-taxi systems would be exceedingly complicated, said the people familiar with the self-driving car effort, and far afield from Google’s primary business of selling online ads.

Google’s current, small fleet of self-driving cars – which use a Toyota Prius retrofitted with cameras, sensors, radars, and Google’s special software – cost around $150,000 apiece, according one person familiar with the matter. Google has been working hard to lower the cost by designing some hardware components on its own.

The financial risks explain why the project is located at Google X, the R&D lab near Google’s headquarters. Google X focuses on what CEO Larry Page calls “moonshots,” or high-risk projects that could have big payouts if they succeed.

SOURCE  The Verge

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