For a number of years there's been an underlying tension between Detroit and Silicon Valley about who knows best how to build cars. This rivalry has been fueled in part by Tesla's success and the fact that it has captured the media and public's attention for its high-tech all-electric vehicles, even though its overall sales are a drop in the bucket compared to most mainstream car companies.
Google was often cited as a tech giant leaping ahead in its development of self-driving cars. Uber, which has also been aggressively working on autonomous technology, was seen as another threat to traditional carmakers, as was Apple, even though the company has yet to formally announce plans to enter the auto industry.
This dire outlook (from Big Auto's point of view)—which held that 100-year car companies were dinosaurs ripe for disruption by more nimble tech firms—has shifted in the last year or so for several reasons. Tesla has had recent issues with its self-driving technology and the company's direct-sales model, production capacity, and solvency are a source of ongoing speculation among media and industry stakeholders.
Uber had to move its self-driving testing to Arizona after running afoul of California law over autonomous car regulations, and Apple's automotive ambitions appear to be floundering. And now Google is positioning itself as an automotive supplier rather than a car company and competitor to automakers.
But Google, whose parent company Alphabet spun off the driverless car project as a separate business unit named Waymo last month, could find this an equally rough road that others have traveled for years, if not decades.
Waymo is Open for Business as an Automotive Supplier
Despite the ongoing assumption that Google would directly compete with car companies by building vehicles, two years ago at the Detroit auto show the search giant made it clear that it's plan was to become an automotive supplier. "We're definitely not in the business of making cars—just to be 100 percent clear," said Chris Urmson, who at the time was the director of Google's self-driving car project.
"At some point, we're going to be looking to find partners to build complete vehicles, and bring the technology to market," added Urmsom, who has since left Google. Two years later, Waymo is doing just that.
On Sunday at the Detroit auto show, Waymo chief executive and auto industry veteran John Krafcik appeared onstage with a Chrysler Pacifica equipped with self-driving sensors and vision systems developed by Waymo. This wasn't news in and of itself; for months the minivans with Google's self-driving cameras and sensors protruding from the roof have testing the tech in California, Michigan, and Arizona.
But the formal announcement in Detroit that Waymo is open for business as an automotive supplier and ready to commercialize a decade of self-driving research and development finally confirmed Google's endgame for the technology. In addition to working with Fiat Chrysler, which produces the Pacifica, Waymo already has another car client: Last month Honda said it was in talks with Waymo "to integrate its self-driving technology into [its] vehicles."
"We've brought all of our self-driving sensors in-house," Mr. Krafcik said onstage in Detroit. "It's all designed and built from the ground up by Waymo, with every part manufactured with one goal in mind: to safely handle the complex task of full autonomy."
But Google's Waymo is once again going up against the expertise and experience of veteran automotive suppliers such as Continental, Bosch, Delphi, whose relationships with car companies go back more than a century in some cases. In the end, Waymo's technology simply may be competitive rather than disruptive, and Silicon Valley could be schooled once again on who knows best how to build cars.