Will Ford and Google build a driverless car?
Google (GOOG) and Ford (F) may be ready to announce a partnership to develop driverless cars, a nascent market that industry experts say is poised for dramatic growth in coming decades.
Under the terms of the deal, which could be announced at next month's Consumer Electronics Show (CES), Ford would build Google's autonomous vehicles, according to reports in Yahoo Autos and Automotive News. Financial details about the partnership, which wouldn't be exclusive, weren't disclosed in the reports. CES is a huge annual trade show where products ranging from the VCR to tablet computers have debuted over the past few decades.
Ford declined to comment to CBS MoneyWatch, and Google didn't respond to an emailed request for comment.
Partnering with Ford could save Google billions in development costs as it tries to gain an edge in the autonomous auto market, which Boston Consulting Group estimates may hit $42 billion by 2025. Google and other tech companies such as Apple (AAPL) and Uber see autonomous vehicles as a key to their future growth.
Several major automakers do, too, and they've been ramping up spending on self-driving vehicles in recent years. At times, the tech and auto industries compete with each other to hire staff and other times they collaborate.
"Certainly, the most obvious example of that is when Uber went into Carnegie Mellon University this year and hired away 40 robotics researchers in one fell swoop," said Richard Wallace, director of transportation system analysis for the Center for Automotive Research, in an interview.
Mountain View, California-based Google, now part of the holding company called Alphabet, has made developing self-driving cars a priority, noting on its website that the technology could significantly reduce the 1.2 million traffic accident fatalities worldwide, many of which are the result of human error.
Google co-founder Sergey Brin said earlier this year that Google was looking for partners for its autonomous vehicle business and was one of the reasons it decided to create Alphabet.
Google and Ford already have close ties. Former Ford CEO Alan Mullaly joined Google's board earlier this year. The head of Google's self-driving car business is former Ford engineer John Krafcik. And Ford CEO Mark Fields is said to have visited Google's research operations in Silicon Valley earlier this year.
Shares of Ford rose 51 cents, or 3.7 percent, to $14.24 in late afternoon trading on Tuesday, while Alphabet jumped $2.47, or 0.3 percent, to $740.20.
The companies would need to work out plenty of legal and technical issues, such as which party would be liable in case a defect led to an accident. Engineers also need to figure out when the autonomous car should signal for its human occupant to take over in the event of a malfunction or unforeseen traffic or weather conditions, according to Carnegie Mellon professor Andre Platzer.
"Everyone is working full-steam on exactly those questions," he said in an interview,
Engineers have made significant improvements in driverless car technology in recent years, but companies are scrambling to develop safety systems as regulators develop "rules of the road" for these new-breed vehicles.
"I think it's going to be there in five years, maybe even sooner, but conservatively five," said Center for Automotive Research's Wallace, adding that cybersecurity is one concern. "If we're going to turn over control of the wheel, the brake and the gas pedal, shouldn't we be damn sure that no malicious actor is going to take control of the car?"
California recently sounded a cautious note on the technology by issuing rules that require all autonomous cars to have a steering wheel and gas and brake pedals and banning cars from operating without people in them. Google was miffed by the decision, saying it was "gravely concerned" it would hold back the technology's development.