At CES, technological alliances strengthen in self-driving car war

Major automakers like General Motors, Ford and Volvo have strengthened their ties with key technology partners this week to prepare to battle electric car challenger Tesla Inc and Apple Inc as it accelerates to enter the market.

Three chip companies – Intel Corp’s Mobileye, Qualcomm, and Nvidia – emerged in a series of announcements at the Consumer Electronics Show in Las Vegas as leaders in brain-locking self-driving cars for the next decade.

The deals involve consolidating dozens of older, slower chips into more powerful centralized computers. But to win them, chipmakers had to agree to let automakers control key pieces of the technology.

Reuters has previously reported that Apple is planning an electric car. Bloomberg reported last year that the iPhone maker is targeting full autonomous driving capabilities as early as 2025.

For automakers facing Apple and Tesla, the stakes are high. In addition to electrifying their models, car manufacturers are essentially designing computers with increasing autonomous driving capabilities.

This means a great opportunity for automakers to make money with in-car software and services long after vehicles have left a dealership’s lot, but only if they can keep customer relationships and data for themselves, as Tesla and Apple do.

Automakers “who weren’t the pioneers are finally realizing that they’re going to be left in the dust if they don’t change their approach,” said Danny Shapiro, automotive vice president of Nvidia, a maker of high power chips. .

Nvidia this week announced agreements to supply the electronic brains for future models of several Chinese electric vehicle startups, and is working with other automakers including Mercedes, Hyundai Motor Co, Volvo and Audi.

Control over technology and data are areas of tension between automakers and tech companies, Shapiro said. “Control and personalization, and who owns the data?” “

The answer is complex because of the astounding amount of technology required for cars to drive themselves.

These include computer vision algorithms to help cameras recognize pedestrians, sprawling high-definition maps of the world’s roads, and “driving policy” software to make millisecond decisions about how the car behaves in the face. to the unexpected.

For chipmakers, that means they have to have all aspects of the technology ready, but be ready to let customers choose.

Qualcomm Inc, for example, spent $ 4.5 billion last year to buy Veoneer Inc to complete all the software needed to supplement its self-driving car chips. But after winning its first major standalone chip contract with GM this week, those software assets won’t be included because GM has its own.

“Our software stack is fully developed in-house. So we’re not taking their pieces, ”said Jason Ditman, chief engineer of GM’s upcoming“ Ultra Cruise ”hands-free driving product.

But for other automakers, Qualcomm needs to have all the parts for an autonomous driving system, said Nakul Duggal, senior vice president and general manager of automotive at the chip company.

“Different automakers are at different stages of preparation,” he said. “What is essential for the automaker is that it must be able to establish a relationship with the customer that it is trying to acquire. “

A similar dynamic is at play in Mobileye’s relationship with Ford, which deepened this week. Mobileye delivered its camera, chip and autonomous driving software as an all-in-one product. Now Mobileye will start to separate some of the functions of its system and allow Ford to build its own technology on top of it.

“We provide all of the outputs to Ford, and they will run their own algorithms in addition to our outputs,” Mobileye chief executive Amnon Shashua told Reuters.

Chipmakers have no choice but to be more flexible as they face their own big competitors.

Automakers had relied on three primary vendors for the simpler semiconductors that controlled combustion engines – Infineon, Renesas and NXP, said Phil Amsrud, senior analyst at IHS Markit.

But the market for chip companies providing high-power calculations to auto makers is relatively crowded, including Chinese companies such as Huawei Technologies Co Ltd and computer vision company Ambarella Inc that are entering the automotive business.

“We’re at a point where we maybe get too many vendors,” Amsrud said. “If you look at the automobile traditionally, there has never been more than a handful. “

(Reporting by Stephen Nellis in San Francisco and Joseph White in Detroit; editing by Richard Chang)

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