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Alphabet's Waymo Unit to Buy Thousands of Self-Driving Minivans From Fiat Chrysler

By Motley Fool Staff - Feb 2, 2018 at 8:30PM

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This adds to the 600 Chrysler Pacificas already in its autonomous fleet.

In this segment of the Market Foolery podcast, host Mac Greer, Jason Moser of Million Dollar Portfolio, and David Kretzmann of Motley Fool Hidden Gems Canada consider the latest deal from the world of autonomous vehicles: Alphabet's (GOOG -0.27%) (GOOGL -0.21%) big purchase of a fleet of Fiat Chrysler's (FCAU) plug-in hybrid Pacificas, manufactured with Waymo's self-driving tech built in. They discuss the future of the (nonexclusive) partnership between the two companies, the current state of the self-driving revolution, and how good Waymo's vehicles already are.

A full transcript follows the video.

This video was recorded on Jan. 30, 2018.

Mac Greer: So, big news from Alphabet. Alphabet's self-driving-car unit, Waymo, is buying, quote, "thousands" of self-driving minivans from Fiat Chrysler. Waymo wouldn't disclose the exact number, but guys, we know they already have 600 Chrysler Pacifica minivans in their fleet, some of which are already shuttling people around in Arizona. David, what do you think?

David Kretzmann: It shows that the partnership they've had with Chrysler over the past couple of years, obviously both parties are happy. It's not an exclusive partnership, but this will be a big deal, because the vehicles that they're buying retail for close to $40,000. So just 1,000 of those would be $40 million. So Alphabet is serious about plunking down a good chunk of change for this. And of all the self-driving players, I think Waymo is the one I'm most optimistic about, at least with where their technology is at today. Just having ridden in a couple, quote-unquote, "self-driving" cars at CES the past couple of years, seeing what Waymo is able to do. They now have some vehicles where, they still have an employee in the car, but the employee isn't in the front seat, they're actually in the backseat. So, really getting closer to that full self-driving vehicle. Far and away more autonomous than a lot of other things that are on display at CES.

Greer: When you took your test ride, the employee was in the back seat?

Kretzmann: No. That's what Waymo does in some cases in Arizona. When you get in a self-driving car now, whether it's a demo at CES or somewhere else, there will be an employee, or essentially an official driver, in the front seat to take control of the car in manual mode. The car will disengage from autonomous mode, and all of the sudden driver will be in control. And we took a self-driving ride with Lyft in Vegas just a couple of weeks ago when we were at CES, and the driver had to disengage from autonomous mode into that manual mode several times, just because traffic in Vegas is intense and you have people trying to cut each other off. That's what makes me think we're still a ways away from full autonomy, but it seems like Waymo has a pretty substantial head start.

Greer: It feels like voodoo magic to me. I'm going to be the last guy driving my car, Jason.

Jason Moser: We are not a ways away from clever Onion headlines. I was just reading how Tesla just debuted the carless driver. [laughs] The picture is the greatest part of it. You have to check this out on The Onion. it's a guy just sitting there as if he's in a car but there's no car. [laughs]

Kretzmann: Just keep believing.

Moser: I was thinking about that last night. I was picking my daughter up from her rehearsal. They're doing this big show at school. It's a production. They're doing these rehearsals all hours of the day, and I'm thinking about it driving home with her at about 9:15 in the evening, and I'm thinking, at one point or another, that's going to be a big opportunity. That's a big solution. I just have a hard time -- the technology for the cars, I think, is there. You refine that, fine-tune it. I think the bigger hurdle is probably going to be our road system, right? We have to have sort of a standardized and trustworthy road system that can detect driverless cars along with driver cars, cars being piloted by us, by drivers, how they interact. There's so many questions that come to mind. So many ifs that come into play. It's hard to picture it today, but it's coming.

Greer: And for kids growing up, it may not be an issue, because they may never drive a car. But the fact that I know how to drive a car, and I feel like I'm a pretty solid driver, I'm just very wary of the technology. I don't know what it's going to take for me to basically trust a self-driving car more than my own abilities.

Moser: But do you enjoy driving?

Greer: Love driving.

Moser: See, I do, too. I actually do enjoy it.

Greer: I love it. I love parallel parking. My parallel parking is solid. I love the Zen of getting on the open road, turning on some Springsteen. I don't want some self-driving zombie car. I don't know.

Kretzmann: Hey, you dial the clock back to 1900, there was probably a couple guys sitting around saying, "You know, I just love driving that horse and buggy, man!"

Greer: [laughs] Buggy whip!

Kretzmann: Yeah. "I'm sticking with the horse."

Moser: Springsteen going, partying like it's 1999.

Greer: I was going to say, is that so wrong? Yeah, I'm going to be the last one driving.

Kretzmann: I think it'll be a while. Really, the replacement cycle for vehicles that are on the road, it takes a good chunk of time.

Moser: I was going to say, there's at least a decade out there.

Kretzmann: I would say 10 or 15 years, at least, before we have above half, full self-driving cars on the road.

Greer: What I do love about this story is, if I said "self-driving car," the first image that came to your mind would be some sleek, futuristic Buck Rogers-esque the vehicle. And I love that these are Chrysler minivans.

Moser: [laughs] Yes.

Greer: The world is good. That is as it should be.

Kretzmann: Yeah. Waymo wanted a vehicle that could hold more people, so going with the minivan, solid choice.

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