On April 23, 2019, Google announced that it has partnered with American Axle & Manufacturing Holdings Inc., to repurpose an existing facility that was most recently used as a sequencing center for a local parts supplier. The site is a facility owned by American Axle in Hamtramck, Michigan, Detroit. The goal is to begin moving into the facility by mid-2019 and prepare the site for manufacturing Level 4 (L4) autonomous vehicles. The company has planned to invest USD 13.6 million to retrofit this facility.
Waymo was a former Google self-driving project before it became a standalone subsidiary in December 2016. Since then, Waymo has tested self-driving technology in vehicles, and this Detroit site is where Fiat Chrysler and Land Rover vehicles would get equipped with Waymo’s self-driving technology. The company is currently planning to install self-driving systems in Chrysler Pacifica minivans. Later, it will add self-driving systems in Jaguar I-Pace electric vehicles. Both these vehicle models will be used by Waymo One—the commercial ride hailing service offered by the company.
Aftab Lashkaria - Senior Research Analyst : Automotive & Transportation Research at MarketsandMarkets™, shares his point of view as mentioned below:
Waymo is one of the leading players in autonomous vehicle technology and has completed nearly 4 years since first testing its driverless ride on public roads in Chrysler Pacifica minivans around Phoenix. But the company is not rushing to deploy autonomous vehicle in the market commercially, but on the other hand, it is aggressively moving ahead for autonomous vehicle technology and setting up autonomous plants to fortify and boost technological advancements in the US.
As Waymo is heading toward more autonomous features in vehicles, there is an intense competition among autonomous vehicle manufacturers with regards to technology, quality, and most significantly, cost. However, technology upgrades in terms of hardware like vehicle camera, sensors like radar, LiDAR, and services like vehicle connectivity will predominantly drive the autonomous vehicle market and aid overall cost reduction of autonomous vehicles.
Apart from Waymo, majority of OEMs across the world are working on autonomous vehicle technology and planning to deploy that in the market.
Impact on Autonomous Vehicles:
There is a growing demand for better safety, security, and comfort in automobiles. The supply of safety systems is better in developed economies with higher purchasing power. Systems such as Advanced Driver Assistance System (ADAS), Traffic Jam Assist, Automatic Emergency Braking (AEB), and Adaptive Cruise Control (ACC) are getting popular across the globe owing to their safety and security benefits. Many governments are initiating various regulations pertaining to vehicle safety and security. All such technological advancements would ultimately push the market for autonomous vehicles.
Impact on Market Competition:
In 2017, apart from Waymo, more than 48 automobile and technology companies, ranging from BMW and Mercedes-Benz to Apple and Samsung Electronics, submitted testing reports to California’s Department of Motor Vehicles. This depicts the intense competition with different automotive OEMs, Tier I suppliers, and even technology companies, trying to make inroads in the market.
To gain a competitive edge, Waymo has joined forces with Lyft to introduce self-driving vehicles in the ride-hailing network of Lyft in Phoenix as the company ramps up its commercial robotaxi service. Moreover, Waymo will add 10 of its self-driving vehicles to the Lyft platform, according to the Waymo CEO, John Krafcik. Once Waymo vehicles are on the platform, Lyft users will have an option to select a Waymo ride directly from the Lyft app.
Moreover, Waymo, in 2018, was valued at USD 4.5 billion, though analysts claim it could surpass a valuation as high as USD 175 billion based on future revenue estimates. For context, Google is raising the market capitalization by seeking third-party investors for Waymo. Therefore, upcoming investments will put Waymo significantly ahead of the other leading competitors in autonomous technology like Uber, Tesla, GM, and Ford.
The development of the new plant for autonomous vehicles in Detroit could help Waymo make advancements in autonomous vehicle technology faster than its competitors. Moreover, it will help the company meet the goal of manufacturing L4 autonomous vehicles for the future. That might well put Detroit back in the map as a prime hub for automotive innovation in the US.