Even as Google plans to test its fleet of 100 pod-like self-driving cars on public roads this summer, its business model remains a bit of a mystery.
Actually building and selling cars might be among the least likely scenarios. Google and other technology companies now researching cars might be more interested in licensing software systems to automakers and collecting the trove of data involved in tracking drivers' movements, analysts say.
Tech giants Google Inc. and Apple Inc. are circling the automotive industry because they foresee a giant transformation of transportation that will change how people operate cars and what they do inside them, said Oliver Hazimeh, a partner and automotive expert at PWC, the international accounting and consulting firm.
“The tech companies want to know how to participate,” he said. “Think about the office in the autonomous car. People can respond to emails, look at screens and do work.”
That creates opportunities to sell services and provide commerce. It will also generate massive amounts of data on where the cars go and what people are doing during that travel time, Hazimeh said. Silicon Valley wants a piece of that.
There are already nascent approaches to this, he said. Insurance companies, for example, have programs that give reduce rates to drivers that allow their mileage and driving habits to be tracked electronically.
The automobile industry should expect competition from tech companies and other new entrants.
Uber, the ride-sharing company, is researching self-driving cars, possibly as a first step to establishing a robotic taxi service. Apple is reportedly researching electric car development, although it has not publicly released details on the project.
Hazimeh said he wouldn't be surprised to one day see people summoning robotic cars from an Apple watch.
By 2025, as many as 250,000 self-driving vehicles could be sold each year globally, and that number could swell to 11.8 million a decade later, according to a January study by IHS Automotive, an industry research firm.
“Vehicles that can take anyone from A to B at the push of a button could transform mobility for millions of people,” Chris Urmson, director of Google's self-driving car project, wrote on the company's website Friday.
For now, Google has no plans to sell any of its bubbly fleet of self-drivers. They are strictly for research. But they will hit public roads this summer near Google's headquarters in Mountain View, Calif. Previous testing has taken place only on closed courses.
The cars are built to operate without a steering wheel, accelerator or brake pedal.
“Our software and sensors do all the work,” Urmson said. “The vehicles will be very basic — we want to learn from them and adapt them as quickly as possible — but they will take you where you want to go at the push of a button.”
The prototypes are the first of a 100-car fleet the tech giant is building.
In the long run, Urmson sees a vision of safer roads — the overwhelming majority of auto mishaps are caused by human error — and fewer traffic jams. Robotic cars could also shuttle people who can't driver because of age or illness.
Google has said previously self-driving cars could launch new business models in which people buy the use of vehicles they don't own.
The company has already tested other types of self-driving cars on public streets, including modified Lexus sport-utility vehicles, under a special permit program by the California Department of Motor Vehicles that requires a human driver at the controls.
The state has issued six other companies permits to operate such cars, including Delphi, Mercedes-Benz, Volkswagen, Tesla, Bosch and Nissan.
Google, with 23, has the most in operation. Tesla is approved for 12 vehicles. The remainder of the companies, which include both automakers and electronic systems suppliers, have just two or three cars each on the road, said Bernard Soriano, the DMV's deputy director of risk management. There are 277 approved test drivers.
The DMV is writing regulations that would govern the operation of self-driving vehicles on state roads and may issue them later this year.
“We need to do our due diligence and research to vet out all of the safety issues,” Soriano said. “We are close, but we don't have a date to have them available yet.”
The vehicles that will be tested on open roads this summer will have removable steering wheels, accelerator pedals and brake pedals to allow “safety drivers” to take control if needed.
Google says the cars are safe. The vehicles have sensors that “can detect objects out to a distance of more than two football fields in all directions, which is especially helpful on busy streets with lots of intersections,” Urmson said.
Speed will be limited to 25 mph.
The interior will be spartan — two seats with seat belts, a space for passengers' belongings, buttons to start and stop, and a screen that shows the route.
“We're looking forward to learning how the community perceives and interacts with the vehicles, and to uncovering challenges that are unique to a fully self-driving vehicle,” Urmson said.