Cleantech Market Intelligence
No, Google’s Not Building a Car
The news that Google made a big investment in car-service company Uber recently led to some wild speculation. The article that appears to have caused the rumors to develop first appeared on the Tech Crunch blog, but some of the journalists who picked up the news feed failed to notice that the article (which was posted on August 25, 2013) was dated July 25, 2023, and that most of it – specifically the details about Google cars – was fiction. The media seem to be particularly interested in autonomous vehicles at the moment, though, and many rushed out articles covering the exciting news that Google had sold 2,500 of its driverless cars to Uber for $375 million. eFinanceHub produced one example, and even the U. K.’s Daily Mail got caught out, although they took down their August 26 online article (Would you hail a cab driven by a ROBOT? Rumours that Google’s self-driving cars will one day form a ‘robo-taxi’ service) the next day.
With Google recently reported by the German press to be working on autonomous driving systems with Tier 1 supplier Continental and computer giant IBM, speculation is growing, especially among those who cover emerging technology, that Google is about to bypass the stodgy old traditional car manufacturers and render them obsolete by launching its own brand of vehicles. This strategy was successful in the mobile phone world, so why not for automobiles? Navigant Research has studied this topic carefully and concluded that the most likely future is one where a few thousand self-driving vehicles are on the roads in 2020, with market growth taking off a few years after that.
Google’s research will be very useful to OEMs and suppliers but will not lead to a new vehicle brand. The chances of success as an automaker are very slim because the investment to get started is so high, and one slip up can mean bankruptcy thanks to the legislation that affects every aspect of the modern automobile. Aptera and Fisker are recent casualties, and the Big 3 U.S. automakers have phased out brands, such as Pontiac, Saturn, Plymouth, and Mercury, that struggled to compete. It is not just a matter of designing a cool new car. Being able to manufacture in large volumes at high quality and provide sales and service is also important, as well as avoiding expensive product recalls. The Federal specifications that must be met to sell vehicles in the United States are extensive, and similar but not identical rules apply in all other countries.
Tesla is the one new car company that seems to have made it past the first hurdle. It is interesting that in the early summer of 2013 there were rumors starting that Google would buy Tesla. Navigant Research does not think this will happen, but it is one practical way for the tech giant to become an automaker – if it really wants to.