Google parent Alphabet Inc. (NASDAQ:GOOGB) has elected to spin out its driverless car technology into its own business – called Waymo. This move could be a signal that Alphabet is very close to a revenue earning product line.
Waymo’s new chief executive will be former automobile exec, John Krafcik, who has been in charge of Alphabet’s autonomous vehicle project for the past several years.
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Shaking Up The Competition
So far the company has put in more than 2 million miles testing on public roads. This has raised concerns among traditional automakers that Alphabet may be trying to usurp their business.
General Motors Co. (NYSE:GMC), which acquired San Francisco-startup Cruise Automation earlier this year, Ford Motor Co. (NYSE:FC) and Toyota Motor Corp. (NYSE:TMC) are all pushing to put self-driving cars on highways by 2021. Tesla Motors Inc. (NASDAQ:TSLAC) is already shipping vehicles with hardware that could be activated by a future software revision designed to make those cars fully self-driving.
Much More To Do
As close as Waymo may be, there’s still a lot to be done according to the company’s head of self-driving tech, Dmitri Dolgov. Dolgov says among projects that need to be fully fleshed out, building better maps, making the ride smoother and improving navigation in inclement weather conditions.
Once that’s complete, Krafcik says, “We can imagine this [technology] in ridesharing, in transportation, trucking, logistics even personal use vehicles and licensing with automakers, public transport and solving the last mile” he said. “Self-driving technology is awesome in all these categories.”
Technology Versus Cars
Krafcik made an important point when he emphasized the fact that Waymo’s focus was on technology – not cars. This should allay some of the fears of competitors once the realize Waymo needs their vehicle technology for its self-driving technology.
“We are a self-driving technology company,” Krafcik said. “We’ve been really clear that we’re not a car company although there’s sometimes some confusion on that point. We’re not in the business of making better cars. We’re in the business of making better drivers.”
No Deals Yet
That said, there have been no deals announced yet between Alphabet’s new Waymo division and any automobile companies. Overall, the talk about technology versus complete cars demonstrates the fact Alphabet wants to start generating revenue.
It also signals the urgency everyone in the space feels to get a viable product on the road. Automakers and tech companies have long argued how best to introduce the public to autonomous vehicles. Some have suggested adding technology to driver-operated cars as a way to ease in. Alphabet, however, seems to have settled on ‘proven safe’ totally autonomous vehicles as a ‘sink or swim’ philosophy designed to get consumers used to seeing cars on the road without steering wheels or brakes.