Google Rewrites History with Fiat Chrysler Deal: Alphabet Inc (GOOGL)

Google self-driving car

Alphabet Inc ‘s Google has launched a new chapter in self-driving car’s history book by inking a deal with Fiat Chrysler to develop such vehicle.

Google self-driving car

Since interest in the development of self-driving cars began rising in the past few years, the trend has mostly been being about automakers and technology firms developing their own technologies independently. In brief, no cooperation or any form of technology transfer agreements have been in place between tech firms and automakers, until Tuesday.

Google changed all that two days ago, when it announced plans to expand its development of autonomous cars by deploying its technology in minivans sourced from Fiat Chrysler.

This is the first prominent deal involving a traditional Silicon Valley firm agreeing to partner with a regular carmaker to develop an autonomous car.

The deal could also break the usually frosty and wary relationship between auto firms and tech companies, and influence other firms to enter into similar agreements.

For Google, the agreement marks a major strategic shift for a company that previously preferred building and testing its own autonomous cars. The deal also enables Fiat Chrysler to access Google’s cutting-edge knowhow in driverless cars instead of committing funds to develop its own program.

Analysts have touted the move by Fiat Chrysler to enter into this agreement as having been influenced by market dynamics. The automaker is racing to catch up with its peers that have already launched their own in-house self-driving car programs.

The decision is a good one, since Google has already made several strides in the development of autonomous vehicles. The financial details of the deal remained undisclosed, though Fiat Chrysler is expected to supply Google with 100 Chrysler Pacifica hybrid minivans that will be specially modified to facilitate installation of self-driving technology.

First Deal with a Traditional Automaker

Under the terms of the deal, Fiat Chrysler is expected to design, engineer and build the minivans. Google is then expected to install computer systems and sensors into the specially-built vehicles.

The deal marks the first time Google has entered into a partnership with a traditional automaker to redesign mass-market cars to drive autonomously. Previously, Google relied on an automotive supplier to create its own driverless car prototypes.

The deal is also a critical step towards influencing consumers to accept the reality that autonomous cars can be used for everyday chores. Driverless cars will not only make our roads safer, but will also enable people who cannot drive to access areas they couldn’t previously go to.

It is worth telling that Fiat Chrysler’s CEO Sergio Marchionne has consistently advocated for partnerships with tech firms. This is partly motivated by the desire to save crucial dollars that would have been used to develop its own high-tech driverless car technologies.

Other auto firms such as Ford Motor and General Motors have made huge strides in the development of their own self-driving cars. Already, G.M. has entered into a purchase agreement to buy out technology firm Cruise Automation to enable it install its cars with driverless technology.

Federal Regulators Rushing to Beat Clock

Not to be left behind, federal regulators are rushing to draft new guidelines to govern the use of self-driving cars. The regulators have enlisted Google, Volvo and Ford into the committee that wants to have laws governing the manufacture and use of driverless cars passed quickly. This means it won’t be long before they are a common sight on American roadways.

Google has conducted its tests in various locations, including California. It has also used modified SUVs from Toyota to conducts its tests. However, the Pacifica hybrid minivan is larger and more spacious. It boasts features such as automated sliding doors, which makes it ideal for carrying around larger number of people without requiring a human driver.

So far, there are no signs yet whether Fiat Chrysler has installed a production line to mass produce autonomous cars for Google. It is therefore reasonable to assume the collaboration is meant for testing purposes only. The two companies have revealed that their engineering teams will partner together at an undisclosed place in Michigan.

Fiat Chrysler stands to gain a lot from the free marketing of the attributes of this latest model of its bellwether vehicle, which is scheduled for sale this year. The car is a gasoline-electric hybrid, hence Google also gains a logical platform to continue with its testing efforts. This makes the deal a win-win one.

Google Car Has Won the Backing of Several People

Self-driving car technology has been supported by none other than Mark Rosekind, America’s chief car safety regulator. He believes such cars will reduce traffic deaths, which currently stand at 33,000 per year in the U.S.

Driverless cars have also won the backing of activists who favor development of sch cars by disabled people who are unable to operate them. It has also been supported by groups such as Mothers Against Drunk Driving, which believes it will reduce accidents involving drunk drivers.

Critics of self-driving cars argue that the safety of such cars is yet to be fully proven. They have relied on crashes involving Google autonomous cars on public streets to prove their claim.

So far, there are no existing federal rules that ban outright the use of autonomous cars. However, California has a set of draft regulations that require a self-driving car to have a human driver behind the wheel to steer it in case the system is unable to navigate a certain obstacle by itself.

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