The race for a strong starting position in the imminent autonomous cars market is hotting. The competitors can be roughly dissected into two main factions – the big traditional car manufacturers and the Silicon Valley pretenders. The former group boast track record in the latest technology in the world of automobile engineering and the latter are relying on their superior background and expertise in software to gain the upper hand. A joint venture between traditional German rivals BMW and Daimler seems to indicate that the new threat of invading hordes from the West will be met by new alliances being formed between traditional rivals.
A Wednesday statement announced that Daimler and BMW are forming a joint venture which will combine the car-sharing and ride-hailing subsidiary companies of both. Daimler’s Car2Go and DriveNow of BMW, which allow subscription holders to use vehicles when they want without owning a car, and Uber-esque apps Moovel and MyTaxi will be transferred to a newly-formed and jointly owned company. There is even speculation the joint venture could be listed as a standalone company on the Frankfurt stock exchange.
Daimler Chief Exec. Dieter Zetsche set a bullish tone when the announcement was made. He made it clear that the German car makers don’t plan on sitting back and letting big tech take over their turf with the dawn of driverless cars:
“As pioneers in automotive engineering, we will not leave the task of shaping future urban mobility to others.”
His BMW counterpart, CEO Harald Krüger added
“this alliance will make it easier for our customers to discover the emission-free mobility of the future”.
The big traditional carmakers are facing the biggest change to their industry to date with the advent of driverless vehicles. While the new technology is still in the testing phase rapid progress is being made. Despite setbacks such as recent accidents involving autonomous vehicles, it is widely expected that within a decade driverless cars will be mainstream. That is expected to also revolutionise ownership models with cars becoming a service rather than something most families own.
The Silicon Valley tech giants have also seen the impending development as the opportunity for them to potentially dominate a newly shaped industry. When it comes to driverless cars, they clearly believe that it is the strength of the software technology, both in the vehicles and as a service platform, that will win out over engineering excellence. Companies such as Uber, Google-owner Alphabet, Tesla and Amazon are all tech companies heavily invested in the driverless cars bet. Even chipmakers Intel and Nvidia see themselves as strong contenders in the race for a chunk of what will be a multi-billion industry.
While the tech companies are backing themselves, and their deep pockets, to also be able to match software with high quality engineered vehicles, the traditional carmakers are also backing themselves to compete against the tech companies on software. This particular battleground looks set to be a real clash of titans over the coming decade. Hopefully the winners of this intense competition will be the end users of driverless cars.