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In a global auto industry charting its path to next-generation mobility, autonomy and electrification, things “proprietary” feel so last century.

The new “P” word is partnership. As the race to field self-driving vehicles quickens, traditional automakers and Silicon Valley players are showing that none of them possess the technical capability or the financial heft to develop the necessary sensing technology, to integrate it into a safe package and to produce it at scale.

Everyone needs help and capital. The result: a growing list of tie-ups uniting would-be competitors into partnerships designed to combine technical firepower, to attract financial investment and to deliver a credible autonomous vehicle to the market — preferably sooner.

Ford Motor Co. holds a majority stake in Argo AI, a Pittsburgh-based autonomous vehicle start-up. Google parent Alphabet Inc.’s Waymo is partnering with Fiat Chrysler Automobiles NV and Jaguar Cars Ltd. on self-driving minivans and SUVs. Toyota Motor Corp. is investing $500 million in Uber Technologies Inc. to develop a self-driving car, five months after a self-driving Uber killed a pedestrian in Arizona. 

And General Motors Co.’s GM Cruise LLC unit, a combination of the Detroit automaker and San Francisco-based Cruise Automation, on Wednesday confirmed a new partnership with Honda Motor Co. to design and build an all-new autonomous vehicle — yet more evidence that no one has what it takes to do it all in Auto 2.0.

“We recognized from Day One that we could not do this alone,” Raj Kapoor, chief strategy officer of Lyft Inc., a ride-sharing firm and frequent partner with automakers, said at a New York Times Tech Talk this week in Detroit.  “We’re in a period of significant, significant change.”

Everyday competition is morphing — to a point — into what some call "co-opetition." Would-be rivals in the auto and tech spaces are joining forces to speed development of autonomous vehicles, to refine the business models supporting them, to show investors there can be a return on enormous amounts of invested cash.

"This is a very competitive space," said Kevin Johnson, CEO of the Detroit Economic Growth Corp. "Leadership has to be determined. Smug is never a good position to be in. You sit on a lead, you usually lose. We're not sitting on the lead anymore."

There's no meaningful lead to sit on, at least not yet. Auto 2.0 amounts to the confluence of Big Manufacturing and Big IT, a technological mashup promising to change the way people move, what vehicles they own — if any, how much they spend on transportation, and who profits from it all.

"You need both to make it work," said Sherif Marakby, CEO of Ford Autonomous Vehicles LLC, referring to Silicon Valley and the auto industry. "Shared mobility is the future. It doesn't make sense to have this thing that sits 95 percent of the time."

Except that selling those things is how Ford and their automotive rivals have booked revenue and profit for the past century, illustrating just how profound is the transformation facing traditional automakers — and how great the opportunity for the partners who figure it all out.

None of it is guaranteed. And the cultural differences are profound. Automakers generally are legacy businesses using disciplined production systems to build heavily regulated consumer products. Tech companies are comparatively young, prize innovation, embrace failure and often use their customers as product testers.

Bridging those cultural divides is not easy for either side. Automakers need to quicken the metabolism of innovation, to learn how to adapt the best Silicon Valley traits to a business still expected to field safe, properly tested products the general public can trust.

Tech companies need a deeper appreciation of the vast regulatory regime governing motor vehicles — federal standards on vehicle safety and emissions and state laws on roads, traffic flows and licensing. The rules governing the auto industry, enforced by an aggressive plaintiffs bar, rank cars, trucks and SUVs among the nation's most heavily regulated consumer products.

And the public? It's just beginning to consider, if at all, transportation without drivers and steering wheels. Whether and how all these collaborations succeed will decide how quickly self-driving vehicles become a meaningful reality — or not.

daniel.howes@detroitnews.com

(313) 222-2106

Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.

 

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