The narrative of shiny Silicon Valley topping decrepit Detroit in the race to develop self-driving cars has become a recurring theme in recent years. Just as tech companies have reinvented (dare we say, disrupted?) everything from telephones to how we consume music, the thinking goes, so too will they leave traditional automakers in the dust when it comes to autonomous cars.
While it’s true that Google, Uber, Tesla, and others have spurred normally slow-moving automakers into action on autonomous technology, research released this week indicates that incumbents in the auto industry are way ahead of their Silicon Valley challengers. And this gap will only widen once robo-taxis take over.
Navigant Research’s Leaderboard Report ranked 18 companies developing self-driving technology by breaking their progress into 10 different categories, including strategy, manufacturing, and execution. Navigant then gave each of the self-driving contenders an overall score based on each of these criteria to determine where each company pursuing autonomous technology now stands.
Detroit stalwarts Ford and General Motors topped the list at No. 1 and 2, respectively, followed by Renault-Nissan in third place and Mercedes-Benz parent company Daimler in fourth. Alphabet subsidiary Waymo doesn’t appear until No. 7, and it shares that slot with Volvo and its autonomous technology partners. Tesla doesn’t even make the top 10, while Uber comes in at No. 16, three places from bottom-ranked Baidu, China’s version of Google.
An Undisputed Truth
The reason automakers top tech firms, according to Navigant, is pretty basic: building cars is more complex than producing an app or smartphone.
Waymo may have superior technology compared to automakers, “but they will have to do deals with someone to get actual vehicles,” Sam Abuelsamid, a senior Navigant research analyst and one of the authors of the report, told The Verge in an email.
And if cash-rich Alphabet doesn’t have the resources to produce cars, Silicon Valley startups like nuTonomy (ranked No. 17, right above Baidu) are out of luck. “If they have something good to offer, their best bet is an acquisition,” Abuelsamid said, which has actually been a pretty lucrative path for some startups these days.
Navigant’s assessment also bodes well for automakers as they shift from selling sheet metal to mobility services such as ridesharing. It’s no secret that Uber wants to replace its human drivers with self-driving tech, and in the process substantially boost its bottom line.
Ford has promised to mass produce self-driving cars that, like Google’s autonomous pod concept, won’t have a steering wheel or brake pedals and are specifically designed for ridesharing purposes. It doesn’t take a genius to figure out that GM’s $1 billion acquisition of Cruise Automation and half-billion-dollar investment in Lyft last year is leading the automaker down a similar path. Just this week, Mercedes and Bosch partnered to make robo-taxis a reality by the beginning of the next decade.
“It’s far easier for a manufacturer to replicate the sort of logistics platform that Uber or Lyft have than it is for those companies to invest in and create the development, manufacturing, and service infrastructure that automakers have,” Abuelsamid noted. “That’s exactly what’s already happening, as all the leading OEMs have already invested in or are developing their own services.”
So don’t count Detroit (and Stuttgart) out. Companies that some in Silicon Valley have dismissed as dinosaurs will likely not only survive but thrive in the next era of personal mobility.