It's official. Ford (NYSE: F ) has unveiled a prototype for an autonomous Ford Fusion Hybrid vehicle, putting it in a race against big tech names such as Google (NASDAQ: GOOG ) and Tesla Motors (NASDAQ: TSLA ) to build the world's first mass-market driverless car.
The road most traveled
From traditional automakers and EV start-ups to Silicon Valley tech darlings, it seems everyone is developing autonomous0car technology these days. Ford is the latest company to announce its plans to produce self-driving vehicles. The company, together with the University of Michigan and insurance provider State Farm, launched a Ford automated research vehicle this week that will help Ford deliver fully autonomous cars by 2025.
Ford has been moving in this direction for some time now. In fact, its self-driving cars of the future will incorporate technology that's already available in Ford vehicles today, such as its "fully assisted parking aid" features. Earlier this year, Ford released technology that lets drivers park their cars with either a touch of a button inside the car, or by using a remote outside the vehicle.
"We see a future of connected cars that communicate with each other and the world around them to make driving safer, ease traffic congestion, and sustain the environment," says Ford's executive chairman, Bill Ford. Yet Ford isn't the only auto company that envisions a future powered by smarter cars.
The competition heats up
Ford hopes to deliver self-driving cars by 2025, using a mix of old and new technology. However, competitors might beat Ford to the finish line. Electric-car maker Tesla Motors is also investing in autonomous technology, and the company's CEO thinks it can deliver a driverless experience for its Model S cars in as few as three years.
Earlier this year, the company's CEO, Elon Musk, posted on Twitter: "Intense effort under way at Tesla to develop a practical autopilot system for Model S." Now, I don't know about you, but I certainly prefer the sound of "autopilot" over "self-driving." In an interview with Bloomberg in September, Musk explained, "Self-driving sounds like it's going to do something you don't want it to do. Autopilot is a good thing to have in planes, and we should have it in cars."
Not only does this reasoning make sense, but it's also a smart approach for Tesla, because creating a "mostly driverless car" would take much less time to develop. Musk is confident that Tesla can deliver technology for cars that drive themselves 90% of the time, sooner than rivals in the space. If Tesla can, in fact, get this technology to market in just three years' time, it would put the heat on Ford and others. Similar to Ford, Nissan says it can make autonomous cars a reality by 2020 -- though by that time, it may be late to the party. Google, on the other hand, hopes to have its autonomous technology production ready in just five years.
Nevertheless, Ford's partnership with State Farm auto insurance could give it an edge over these competitors down the road. Going forward, regulations will need to be put in place to govern how autonomous cars should be legislated. And what better way for Ford to get ahead than by gaining early support of one of the major insurance companies? Self-driving cars are coming, and Ford plans on being a part of this emerging technology even if it's late to the game.
From hands-free driving to hands-free investing
It's no secret that investors tend to be impatient with the market, but the best investment strategy is to buy shares in solid businesses and keep them for the long term. In the special free report "3 Stocks That Will Help You Retire Rich," The Motley Fool shares investment ideas and strategies that could help you build wealth for years to come. Click here to grab your free copy today.