Softbank Group Corp, a Japanese multinational conglomerate, and Google’s parent, Alphabet Inc, revealed plans on Thursday to invest billions of dollars with auto makers in a bid to dramatically increase the number of driverless cars on the road in coming years, according to a recent Wall Street Journal article.
Softbank’s $92 billion Vision Fund would invest $2.25 billion in General Motors Co.’s driverless-car unit and Waymo LLC, a self-driving car subsidiary of Alphabet, is planning to buy as many as 62,000 minivans. While there was no disclosure of the purchase price, the total could amount to an excess of $2 billion, as revealed by people familiar with the matter.
SoftBank’s move came as part of the global trend that has been seeing tech companies, traditional and non-traditional investors and automakers racing to invest into the transportation area, from autonomous driving technologies and ride-hailing business models that would change the way people drive and own an automobile.
For instance, the American investor guru, Warren Buffet, confirmed news of his Berkshire Hathaway Inc having discussions over investing into Uber Technologies Inc.
Even as the latest self-drive cars developments send leading tech investment giants to Detroit in the United States, China’s internet giants – Baidu, Alibaba and Tencent, commonly known as the BATs are also spending heavily on driverless car start-ups amidst strong global competition.
Tencent’s automatic driving unit was awarded the much coveted smart network-linked automobile road test license to test self-drive cars on designated road sections in Shenzhen, recently in May this year. Chinese ride-hailing giant Didi even got a permit from America to test self-driving cars in California.
It is thus imperative to compare the mindsets and technology capabilities between China and the West.
While most of today’s core driverless technologies were developed in the West, with Detroit and Germany partnering with Silicon Valley becoming technology companies rapidly, many of these are open source – allowing China to catch up quickly, per a recent Forbes article.
According to a survey in February this year by TÜV Rheinland, a German-based technical services company, the Chinese public who have more trust in their data as compared with their U.S counterparts, are better poised to roll with driverless cars.
Auto makers, tech giants and investors in the West are envisioning a future to sell mobility as a service, as opposed to cars as a product, while the Chinese tech giants see driverless cars as an additional tool to add onto its lifestyle platform to offer everything from commutes, online shopping to video games.
Nevertheless, the race for a transformed world of personal transportation has only just begun.