Waymo to Build Complete Autonomous Vehicles

Back in January it was reported that Waymo was partnering with Magna, the contract vehicle builder, to start assembling full autonomous vehicles in Michigan. Magna, based in Canada now owns Magna Steyr, an Austrian company that used to build their own cars however in the last few decades has been building cars for others including Jaguar.

At the time, the Michigan Economic Development Corporation had agreed to fund the project to the tune of $8M. The plan was to convert Chrysler Pacifica Hybrids and Jaguar i-Pace vehicles to be stand-alone drivers. The factory was to employ 400 workers, so not an insubstantial project and one that would boost the local economy.

Now the company has found a local factory partner in American Axle & Manufacturing who will repurpose an existing factory space to convert the vehicles into Waymo products. The factory was used by another parts supplier whose contract ended and so over a few months, Magna has access to put in their production lines. They expect to start delivering vehicles to the Waymo robo-taxi service by the end of the year.

This is an important step forward for Waymo and for Detroit – with the Big Three under pressure to make money, satisfy the Government and deliver new vehicles, Michigan has been quite nervous about the future. General Motors and Ford have both announced job losses and factories being mothballed or having reduced shifts. We are in a change-over period in the industry and one that we have never had before. Petrol and diesel motors have powered the industry for over a century with electric and other power sources taking a minority stake in the market. All cars were driven by humans and so the technology was tried and tested.

Now we have more electric vehicles, more focus on renewable/recyclable materials and more focus on providing a market segment with driverless cars. No one really knows what that market segment will do and whether it will be a massive success, a slow moving trend or a complete failure. This puts more pressure on the bigger manufacturers and so companies like Waymo can actually help them by providing transportation to people who don’t want to drive – or who cannot drive due to a health issue.

Michigan has been reeling from decades of automotive job losses, the 1950s was really the halcyon decade for the State and for Detroit, this was a time of wealth and new cultural directions with music and other ideas. Now, Michigan and Detroit can regain their position at the top of a new segment of the industry. Detroit will soon be back on top of the country’s manufacturing tables and will overtake the southern States again. Michigan has become the hub of autonomous vehicles, despite a challenge from California.

Waymo’s vehicles are significantly more advanced than Tesla’s cars – and Tesla is likely to get sued by a family of a driver who has been killed in an accident. The death toll from drivers who believed what Elon Musk had told them about the car’s AutoPilot system is rising – it is not an autonomous system yet and has significant holes in the architecture. If Tesla was Boeing, all their vehicles would have been grounded by now.

Waymo, part of the Alphabet company (aka Google) has been striding ahead in the background with commercial robo-taxis in operation and have been beating GM, Ford and FCA at their own game, although they do use FCA vehicles. One of the benefits of having a plant in Michigan is that it will give the company a lot more experience of the wider weather patterns that affect this northern State as opposed to the southern States where the testing occurred. The Level 4 autonomous systems must be super-reliable before they are released to the market and we think that Waymo have been far more conservative in their approach than Tesla and Uber, who have become the punching bags of the industry and their corporate valuations have suffered as a result.

Let’s see what happens this year with the flow of Waymo cars onto US streets. If they succeed, it is very likely that they will seriously damage the market’s first movers who now do not have the infamous advantage that first movers should have!

Image owned by Jaguar.