Alphabet Inc.’s (NASDAQ: GOOGL) self-driving car company Waymo is about to get way bigger. It has set a deal to buy several thousand Fiat Chrysler Automobiles N.V. (NYSE: FCAU) minivans. The Pacifica is one of the automakers most successful models. Waymo has tested it before. The primary challenge the alliance faces is that much of the public still worries about self-driving technology.
While neither company will say how many vans will be involved, several thousand would sharply increase Waymo’s fleet. Neither company would say whether the Pacificas will be used for a large test or will be sold to a small number of people to use on closed roads. The Waymo technology has not been approved for driving on open roads.
Self-driving technology is still in its infancy. A number of small tech companies and very large car companies are rushing to test and deploy self-driving cars. However, it may take years before they are sophisticated enough to operate on any and every road in the United States. Several pieces of research, including extensive ones from Intel Corp. (NASDAQ: INTC) and AlixPartners, show the acceptance of self-driving cars is limited. Ironically, this is because a number of people do not think they are safe. Self-driving car companies maintain the primary reason for the technology is safety. There have been a very small number of accidents with cars in auto pilot mode. The most visible of these have involved Tesla Inc. (NASDAQ: TSLA) vehicles.
As a division of Alphabet, Waymo has huge amounts of capital available to it that other tech startups do not. On the other hand, the world’s largest car companies, each of which is driving into the business, have capital, product development, R&D capacity and distribution networks.
Even if the public comes to accept self-driving cars, there is no guarantee and a Waymo partnership with Chrysler will be a winner.
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