Waymo's truck, Avis partnership. Anthony Levandowski's $120M bonus. Nissan plans AV ride-hailing service.
After graduating from Alphabet’s X lab last December, Waymo has added Lyft and now rental giant Avis as new partners in its self-driving effort. Both collaborations are in their infancy, but represent potential consumer touchpoints for Waymo’s AV products.
The Avis deal specifically would offload key responsibilities and capital demands for the ownership and operation of a vehicle fleet. Basic mechanical upkeep, which Avis is well-versed in, was cited as a major factor in Waymo’s deal.
Shared AVs are often touted for their potential to reduce vehicle ownership by increasing vehicle utilization, but vehicle wear would rise correspondingly (indeed, Waymo CEO John Krafcik acknowledged this point when discussing the Avis deal).
The initial agreement is a small one for Waymo’s Phoenix trial, but Avis’s sprawling network of parking real estate and other logistical assets could be valuable for a nationwide AV deployment (the company has also owned car-sharing service Zipcar since 2013).
Overall, fleet operator partnerships are a natural extension of tech players like Google and Apple scaling back and refocusing their automotive efforts around core strengths (and healthier margins) in, well, tech. Commercial fleet owners are also a logical target for AV retrofitting startups like Drive.ai, the Stanford spinout that raised $50M this week.
After all, the oft-repeated mantra is that vehicle manufacturing and operation are complex enterprises where profits must be fished from a sea of fixed costs.
Although mobility newcomers are distancing themselves from these messy asset-heavy disciplines, automakers old and new continue pursuing ways to optimize for productivity and cost efficiency on production lines.
Our 71-page advanced manufacturing webinar dives into the emerging technologies, startups, and corporate players looking to revolutionize heavy industry. We spotlighted companies like on-demand manufacturing platform Xometry, which BMW and GE’s venture arms just funded to the tune of $15M.
Tesla has emphasized rethinking its manufacturing and supply chain processes to achieve its 2020 production target of 1 million vehicles (up from roughly 84,000 last year). It spent over $100M to acquire automated engineering firm Grohmann for its Model 3 production effort.
One application of this might be the conveyor-driven ovens used in automotive paintshops. The paint drying process is often the most energy-intensive process in the entire vehicle production line, so any efficiency gains here would have a sizeable overall impact.