eResearch | Waymo, a subsidiary of Alphabet Inc. (NASDAQ: GOOGL) focused on autonomous driving, announced this week its first external investment round of US$2.3 billion, to be used towards supporting its current strategy of partnering with major automobile companies.
The investment was led by Silver Lake, the Canada Pension Plan Investment Board, and the Mubadala Investment Company, with other investors including Magna International, AutoNation Inc., and Alphabet Inc.
Waymo is the world’s first autonomous ride-hailing service with operations across 6 states and 25 cities within the U.S., servicing a total aggregate of 5 million miles on public roads in 2018, which has grown to 20 million miles as of January 2020.
Alphabet and Waymo
Waymo was formally Alphabet’s project for autonomous driving technology, but it has since become its own stand-alone company focused on developing a commercial ride-hailing service called Waymo One. Waymo is also expanding to other applications of autonomous driving technology including delivery and trucking, while also selling its sensor technology to autonomous driving companies.
Waymo develops hardware and sensors for autonomous driving, and partners with automobile manufacturers that have vehicles with full autonomy, 360-degree sensors, and a detection range of 300 meters. In the past, Waymo acquired its Light Detection and Ranging (“LIDAR”) sensors for US$75,000 each but as of 2017, it has reduced costs by 90% by designing and manufacturing its own LIDAR.
Last year, Waymo expanded its core fleet for Waymo One in California and the Phoenix area, while it ran tests in Florida. In 2020, Waymo announced planned testing and mapping of its delivery and trucking projects in Texas and Mexico.
Moving forward, Waymo has been making a series of partnerships and acquisitions with various companies from automobile manufacturers to logistics companies to expedite its reach and expansions.
Waymo Partnerships and Acquisitions
|
Company |
Deal |
Details |
| AutoNation (NYSE: AN) |
Partnership |
AutoNation to support Waymo in vehicle maintenance. |
| Avis (NASDAQ: CAR) |
Partnership |
Avis to support Waymo in vehicle maintenance. |
| Fiat Chrysler (BIT: FCA) |
Partnership |
Waymo ordered 600 Chrysler Pacifica Hybrid minivans to test autonomous driving with an additional 62,000 expected to be ordered in the future. |
| Intel Corp. (NASDAQ: INTC) |
Partnership |
Waymo to use Intel’s processors for its Chrysler Pacifica Hybrid minivans. |
| Lyft Inc. (NASDAQ: LYFT) |
Partnership |
Added 10 of Waymo’s autonomous vehicles onto Lyft’s platform for Lyft’s commercial robotaxi service in Phoenix. |
| Magna International Inc. (TSX:MG) |
Partnership |
Waymo is partnering with Magna to integrate the self-driving systems on different vehicles. |
| Nissan Motor Co. Ltd. (TYO: 7201) |
Partnership |
Research on the use of commercial autonomous vehicles for passengers and deliveries in France and Japan. |
| Renault S.A. (OTC: RNLSY) |
Partnership |
Research on the use of commercial autonomous vehicles for passengers and deliveries in France and Japan. |
| TaTa Motors (NSE: TATAMOTORS) |
Partnership |
Waymo plans to order up to 20,000 Jaguar I-Pace cars for US$1 billion. |
| United Parcel Services (NYSE: UPS) |
Partnership |
Testing Waymo’s autonomous Chrysler Pacific minivans to transport UPS’s packages in Arizona. |
| Latent Logic |
Acquisition |
Latent Logic uses machine learning called “imitation learning” to enhance Waymo’s simulation testing |
According to Allied Research, the global autonomous vehicle industry was valued at US$54 billion in 2019 and is expected to grow to US$557 billion by 2026 at a CAGR of 39.5%.
Competitors such as Tesla, Elon Musk’s electric vehicle company, is introducing autonomous driving by integrating its self-driving capabilities to its consumers through software feature add-ons, but its technology is limited to assist drivers with facilitating small burdening aspects of driving such as steering, braking, and accelerating within traffic lanes.
It will be interesting to see which company can continue to enhance autonomous driving technologies while keeping a tight track record of services without accidents and collisions.
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