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Alphabet Bolsters Robotic Car Project with Waymo-Honda Deal
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Alphabet Inc.’s (GOOGL - Free Report) Google has long been trying to bring its fully robotic car control mechanism to the market by forming alliances with car manufacturers. However, the current regulatory environment doesn’t support fully automated cars. Also, its attempts to collaborate with General Motors (GM - Free Report) and Ford Motor (F - Free Report) did not work out.
So it appears that the rollout of a fully driverless car may take longer than expected, thereby delaying one of Alphabet’s longest-running research projects. In its latest gambit to boost the project, Alphabet has formed Waymo, its new self-driving car unit, which the company spun out from its X Labs last week.
Waymo or "A New Way Forward in Mobility"
Waymo does not plan to manufacture a self-driving car on its own. Rather, it will produce self-driving software for established automakers. In addition, Waymo will also offer its software for ride-sharing or ride-hailing services like Uber or Lyft.
In the words of CEO John Krafcik, "We're not in the business of making better cars. We're in the business of making better drivers." That leaves several options including "personal vehicles, ridesharing, logistics or solving last mile problems for public transport."
Shares of Alphabet have been steadily treading higher on a year-to-date basis. The stock generated a return of 4.39% compared with the Zacks Internet Services industry’s gain of 3.81%.
The ride hailing effort in partnership with Fiat Chrysler is expected to be launched by 2017-end. It will be entering a crowded and highly competitive market marked by the presence of Uber, Lyft and several automakers.
Though it is not very clear what sort of autonomous services Waymo will provide, the company said that these auto vehicles will do everyday things like run errands, and help people to commute to work, or get safely home after a night on the town.
Waymo didn’t waste any time and has already entered into formal talks with Honda Motors (HMC). As part of the initial plan, Waymo’s self-driving technology integrated Honda vehicles will join Waymo’s test fleet that includes 100 Chrysler Pacifica hybrid minivans across four cities in the U.S.
If the initial plan materializes, the two companies will formally collaborate to explore more on driverless technology. A successful partnership will make Waymo a major supplier of self-driving technology, placing it in direct competition with long-time auto suppliers like Delphi Automotive (DLPH).
Honda, on the other hand, will add pace to its efforts to roll out fully self-driving cars by 2020.
To Conclude
Google has reportedly made the greatest progress in developing self-driving technology (the unit has been in incubation for 8 years with the technology powering 2 million self-driving miles), but this will be a market where regulatory control will be significant, competition will be stiff and there will be a war over who controls the data thus generated. It's unlikely to have a single clear winner.
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Alphabet Bolsters Robotic Car Project with Waymo-Honda Deal
Alphabet Inc.’s (GOOGL - Free Report) Google has long been trying to bring its fully robotic car control mechanism to the market by forming alliances with car manufacturers. However, the current regulatory environment doesn’t support fully automated cars. Also, its attempts to collaborate with General Motors (GM - Free Report) and Ford Motor (F - Free Report) did not work out.
So it appears that the rollout of a fully driverless car may take longer than expected, thereby delaying one of Alphabet’s longest-running research projects. In its latest gambit to boost the project, Alphabet has formed Waymo, its new self-driving car unit, which the company spun out from its X Labs last week.
Waymo or "A New Way Forward in Mobility"
Waymo does not plan to manufacture a self-driving car on its own. Rather, it will produce self-driving software for established automakers. In addition, Waymo will also offer its software for ride-sharing or ride-hailing services like Uber or Lyft.
In the words of CEO John Krafcik, "We're not in the business of making better cars. We're in the business of making better drivers." That leaves several options including "personal vehicles, ridesharing, logistics or solving last mile problems for public transport."
Shares of Alphabet have been steadily treading higher on a year-to-date basis. The stock generated a return of 4.39% compared with the Zacks Internet Services industry’s gain of 3.81%.
The ride hailing effort in partnership with Fiat Chrysler is expected to be launched by 2017-end. It will be entering a crowded and highly competitive market marked by the presence of Uber, Lyft and several automakers.
Though it is not very clear what sort of autonomous services Waymo will provide, the company said that these auto vehicles will do everyday things like run errands, and help people to commute to work, or get safely home after a night on the town.
ALPHABET INC-A Net Income (TTM)
ALPHABET INC-A Net Income (TTM) | ALPHABET INC-A Quote
Waymo in Talks with Honda
Waymo didn’t waste any time and has already entered into formal talks with Honda Motors (HMC). As part of the initial plan, Waymo’s self-driving technology integrated Honda vehicles will join Waymo’s test fleet that includes 100 Chrysler Pacifica hybrid minivans across four cities in the U.S.
If the initial plan materializes, the two companies will formally collaborate to explore more on driverless technology. A successful partnership will make Waymo a major supplier of self-driving technology, placing it in direct competition with long-time auto suppliers like Delphi Automotive (DLPH).
Honda, on the other hand, will add pace to its efforts to roll out fully self-driving cars by 2020.
To Conclude
Google has reportedly made the greatest progress in developing self-driving technology (the unit has been in incubation for 8 years with the technology powering 2 million self-driving miles), but this will be a market where regulatory control will be significant, competition will be stiff and there will be a war over who controls the data thus generated. It's unlikely to have a single clear winner.
Zacks Rank
Alphabet currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>