Analysts envision auto-tech tie-up trend

Michael Martinez
The Detroit News

The reported partnership between Ford Motor Co. and Google Inc. could be the first of many joint ventures between automakers and technology companies to help speed along the production of driverless cars.

Yahoo Autos late Monday night reported the Dearborn automaker and California tech giant would partner to build self-driving cars in a non-exclusive venture, and that Ford CEO and President Mark Fields would announce the move next month at CES, the consumer electronics show in Las Vegas.

Analysts say the tie-up makes sense, given that Google was never likely to build its own cars, and automakers like Ford could be helped by the speed at which Google can produce new technology.

“Though Google has been publicly vocal about wanting to work with automakers, one has to wonder whether other mobility players (Uber/Lyft, several others) might also consider this model since a partnered automaker arguably accelerates and de-risks the ramp,” Citi Investment analyst Itay Michaeli said in a Tuesday note. “If so, this may be the start of several such news developments.”

The joint venture would be legally separate from Ford to protect it from liability issues, Yahoo says.

Ford would neither confirm nor deny the report.

“We have been and will continue working with many companies and discussing a variety of subjects related to our Ford Smart Mobility plan,” Alan Hall, communications manager for technology, research and innovation, said in a statement. “We keep these discussions private for obvious competitive reasons, and we do not comment on speculation.”

The reported partnership would give Ford an advantage over its crosstown rivals and other automakers who are also looking at developing autonomous vehicle technology.

“Car companies will struggle to keep up with the pace of autonomous technology, while tech companies will face a daunting task in setting up the full production and distribution of an automobile line,” Karl Brauer, senior analyst at Kelley Blue Book, said in a statement. “An alliance between the two industries could make everything happen much quicker, giving the advantage to tech and car companies that align first.”

Ford and Google have a few connections: Former Ford CEO Alan Mulally serves on Google’s board of directors, and last September Google hired former Ford executive John Krafcik as the CEO of the Google Self-Driving Car Project. And Roush Enterprises, a longtime Ford supplier for cars like the Mustang, has helped build Google’s prototype driverless cars in Livonia.

Google has been testing its self-driving cars on public streets in California and other states. Many have gotten into accidents because of human error in the cars around them. No injuries have been reported in any of the crashes.

Ford has a fleet of about a dozen autonomous Fusions that it is testing on public streets in California and Michigan. It also tests the driverless Fusions at MCity, an Ann Arbor technology test bed, and at a proving grounds in Nevada.

Ford began testing its autonomous Fusion in 2013. The company is in the “advanced engineering” phase of its autonomous car production, meaning it’s working to make sensing and computing technologies feasible for production while continuing to test and refine algorithms.

Fields has said he expects some automaker to come up with a fully autonomous vehicle within five years.

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