US Self Driving Car Companies Look to Consolidate to Meet Vertical Integration and Mass Production Challenges

The US market for self-driving car production sector is going through a significant rise in consolidation, as a vast number of car manufacturers are looking for partners, with the aim of keeping up with the competition.

Apple has acquired auto start up Drive.ai, while Uber has acquired Mighty AI, a business which provides training data for computers that are designated to drive self-driving cars. On a similar note Volkswagen has broken its collaboration with Amazon backed start up Aurora, with the aim of joining hands with Ford’s self-driving system Argo AI.

Similar partnerships have been a part of the US autonomous transport market, with collaborations between Chrysler and Jaguar Land Rover with Alphabet’s Waymo, Honda and General Motors, and Uber and Volvo.

In 2019, most of the transactions in the field has had a number of large businesses buying out smaller ones, which suggests that automakers recognize the difficulty in developing fully autonomous automobiles. While frequent advances in technology such as blind spot alerts and self-parking have gained importance, accidents involving existing autonomous cars, have emphasized on obstacles for the road ahead.

Carmakers Likely to Invest in In-house Autonomous Driving Technology Development

Mass production and vertical integration are anticipated to be key challenges for most self-driving car companies, as a limited number of automakers are able to afford the investments required to run large scale factories to keep up with the competition.

Smaller players in the self-driving automotive field are choosing to go with buyouts instead of attracting monetary support from existing investors. On the other hand, larger tech companies such as Waymo and Apple have extensive resources in comparison to established automakers to invest in strategic acquisitions.

In addition experts in the automobile industry anticipate that major carmakers around the world will push to move away from licensing self-driving technologies from Silicon Valley developers, instead investing in the in-house development of autonomous driving technologies. This trend is expected to grow as customers tend to lack awareness about software developers, and blame automakers for failure in operations of autonomous cars instead.

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