There is a strange alliance in the car industry right now with Ford Motors (NYSE: F) and Alphabet (NASDAQ: GOOG), the company formerly known as Google. Yahoo! Autos is reporting that Ford and Google will create a joint venture to build self-driving vehicles.
Essentially, Ford will provide the hardware and Alphabet the operating system. That business model is similar to the one Google already uses in the mobile phone business. It provides the Android operating system and lets others build the actual phones.
The alliance makes a lot of sense because Ford has a lot of resources, including 90 manufacturing plants around the world and $58.75 billion in the bank. Ford also has over a century of experience at building and marketing cars, something that Google lacks. One has to wonder how this will affect Ford’s relationship with Uber Technologies. Ford and the network transportation company have previously tested self-driving vehicles in Arizona.
This could be the first of a number of such alliances for Google because the deal is non-exclusive. Alphabet wants to become a supplier of software to the auto industry, much as is it for the mobile phone industry.
More importantly, Ford has real cars in which to put Google’s software, not glorified golf carts. Alphabet (NASDAQ: GOOGL) recently suffered a setback when the state of California unveiled a set of requirements for self-driving cars that basically runs Google’s cart off the road.
Is Ford the Automaker of the Future?
California is requiring that self-driving vehicles have a steering wheel, brakes, and a licensed driver behind the wheel, USA Today reported. That effectively eliminates the Google car, which has none of those things. On the other hand, it allows for a self-driving Ford Fusion or Transit van.
It looks as if Ford could become one of the dominant players in automobiles in the 21st century. It is making massive investments in electric car technology and has cemented an alliance that puts it at the forefront of autonomous vehicles.
The auto industry of the future will be dominated by the titans of the past. The company that introduced mass marketed cars to the world could be the first to mass market self-driving vehicles. The past, it seems, is the future.