You Won't Want to Miss This Auto Industry Shake-Up

Google (NASDAQ: GOOGL  ) is pioneering exciting innovations in making vehicle driving capabilities fully autopiloted. While some global automakers have been progressing toward similar capabilities over the past few years, their progress has been slow and it appears that Google is ahead in the race by a long shot. Auto investors may be able to capitalize today on these developments in driverless technology. 

Google's autopiloting technology
As early as 2010, Google had successfully modified an existing commercial manually piloted car to operate on autopilot. Despite this early success, Google researchers acknowledged that converting a manually piloted vehicle into an autopiloted vehicle resulted in a waste of all parts previously used to facilitate the manual-piloting operations. 

Pivoting away from modifying existing vehicles, Google is building its own self-driving car from scratch. It will have no manual-piloting option, and will even lack a steering wheel. The prototype, as well as an artist's design of it, is shown below.

Source: Google

A recent video from Google shows the driverless car in action.

Automakers' autopiloting technology
Some of the big automakers are trying to develop their own self-driving cars. Some have merely added isolated autopiloting features in order to assist drivers, including features such as self-parking and brakes that self-engage when a collision is imminent.

Toyota Motor Corp. (NYSE: TM  ) is developing an autopilot feature that will help maintain lane position, and even swerve to avoid pedestrians or other obstacles with no intervention by the driver needed. Meant to reduce driver error and traffic accidents, this welcome feature nonetheless still requires a human driver.

Tesla Motors (NASDAQ: TSLA  ) CEO Elon Musk has set a goal of mid-2016 for the company to develop its own autopiloting technology. While the Tesla version of an automated vehicle would shift most of the control over to the operating system, it would not be 100% autonomous.

In 2012, Ford Motor Company (NYSE: F  ) released information about the autopiloting technology that it was developing. Its system, called "Traffic Jam Assist," would allow the driver to turn over control of the vehicle in stop-and-go, no-pedestrian situations. Although this technology adds to the growing number of innovations that Ford has produced to enhance the experience of its customers, it is a far cry from full autopilot technologies. It is also not set to be ready until 2017.  

General Motors' (NYSE: GM  ) VP of research and development, Alan Taub, has said that the company hopes to complete developing a fully autonomous vehicle by 2020. In the meantime, GM continues to make marginal improvements in automating breaking, parking, and steering systems.

Moving forward with driverless technology
What is next for Google and its driverless vehicle? Nine months ago, Anthony Levandowski, business lead of Google's self-driving-car project, said that Google "does not intend" to become a car manufacturer; it is unlikely that Google with directly compete with the likes of Ford, GM, or Toyota, by selling vehicles to consumers. 

If it did intend on becoming a supplier, Google would need to add significant infrastructure in order to manufacture a large number of vehicles. Despite the advantage that Google currently has over existing automakers in driverless technology, it is uncertain whether this would be a profitable decision for the tech giant, not to mention that such mass production would take them away from their primary businesses of search, advertising, operating systems, and related products. 

It seems more likely that Google will negotiate a valuable strategic partnership with a single existing automaker, where it may supply its recently developed technology in an established manufacturing system. Last September, Popular Science reported that Ford was "giving Google the most serious consideration," though it admitted that the meetings between Google and major automakers were not held publicly, and so there was a fair amount of speculation in reporting on the seriousness of potential deals.

If Google does enter an exclusive partnership with a major automaker, the result could be a quick, profitable game changer in the automobile industry. Google is marketing its accomplishments in developing driverless tech as being both safe and convenient improvements. Although it is unclear what the demand (or even the price) would be for such autopiloted vehicles, it is easy to imagine that driverless cars will be hot items in the future.

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  • Report this Comment On June 13, 2014, at 4:37 PM, SkepikI wrote:

    I wonder what happens to Google's share price when the first autopilot accident occurs and some dweeb blames a system fault? Or that Google should have "reasonably forseen" that the Semi bearing down on you was a risk and the autopilot should have engaged evasive action that it did not have in its program? This will be very interesting....

  • Report this Comment On June 14, 2014, at 8:50 AM, tuitens wrote:

    This event will become a insurance company problem.They(the insurance) will have at the begining to assess if the risk is bigger or lesser with a human driver than with a computer's driver . This insurance problem become the problem of both the auto constructer and the robot developper. That's an easy problem . But the complexity is the penal responsability, except if the Ministery of justice declare that a robot could not have any penal responsability. I wonder how the governments are going to react to this problem..It is very complex , and anything that involves government may take decades ..

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