Insiders have been speculating for a long time now that Silicon Valley’s technology firms would team up with some of the big automakers to develop self-driving vehicles. Well, that day has come. Sources at both Ford and Google have confirmed that the companies are in discussion of forming a partnership. This makes me wonder – Who would get the better end of the deal?
Obviously, both companies would declare that they won if the deal goes through. However, more than one analyst is wondering if Ford would be making a deal with “the wolf at the door.” This includes Joe Spak, a RBC Capital analyst who wrote that he believe 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.” To explain the point that Spak is making, this would make it more difficult to sell vehicles on brand. This was seen in trends among computers and mobile phones. However, this could be an expansion of Ford’s Smart Mobility plan, which aims to explore new business models.
Surely, both companies would stand to gain in one way or another from a partnership like this. By working with such a large global manufacturer like Ford, Google’s auto program would receive an enormous boost that could help it accelerate the development of self-driving cars on a much larger scale.
On the other hand, Ford’s expertise in autonomous-drive vehicles would surge by working with Google, who has already built self-driving vehicles that have logged over 1.3 million miles in California and Texas.
Of course, details about this possible partnership are very limited – both companies are declining to comment on the talks. Sources are admitting that if a partnership does take place, it would not be exclusive. It is very obvious that automakers and tech companies are about to team up in more complex ways than we think.
A few months ago, a lucky group of reporters got to test-drive the latest autonomous drive vehicles. Google’s director of the self-driving car project, Chris Urmson said that their goal was to “get this technology out so that everyone can use it.” Wait, there’s more. He added, “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.”
That last comment points the finger at Ford and their CEO, Mark Fields knows that 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.”