Alphabet Inc (NASDAQ:GOOGL) and Honda Motor Co Ltd (ADR) (NYSE:HMC) swept the media-verse this week with news of a potential alliance in the works. GOOGL’s self-driving car project, now known as Waymo, is in discussions to bring a second auto heavy-hitter under its belt.
On Wednesday, Honda made some waves revealing it is in conversation to test Alphabet’s Waymo in assorted cars, exploring use of sensors to computers to software.
This would mark Waymo’s second strategic partnership, as there already is a collaboration in the making with carmaker Fiat Chrysler, widely anticipated to kick-start a ride-hailing service with self-driving cars by the close of 2017.
Just one week prior, after having been in the Google X research lab for eight years, Alphabet’s self-driving car project realized into an independent, separate company, Waymo, with a priority on selling its technology over building cars.
Worthy of note, the Google-parent company plans to keep under wraps the revenue and profitability of its self-driving tech company, with its financial results to be mixed under a branch titled “Other Bets” with the rest of non-Google businesses.
Ruth Porat, GOOGL Chief Financial Officer has advocated for investors to judge Other Bets throughout the course of a “long horizon,” keeping in mind viewing financial results through an “early stage” dose of perspective.
Waymo is adamant in its quest “that there will be more self-driving cars sooner, available from a variety of automakers.” Meanwhile, from Honda’s perspective, “These discussions are an initial step that will allow Waymo and Honda R&D to further explore the potential of a broad range of automated driving technologies.”
Though these discussions are only just the beginning of a potential partnership, clearly both companies are serious enough to make even just initial talks a matter of news-worthy attention. Clearly both Waymo and Honda see it to their favor to make this dialogue public, perhaps to drum up further investor interest.
Brian Fitzgerald of research firm Jefferies for one finds the move encouraging, asserting, “The news supports our expectation that Waymo will be focused on technology with the potential to license to vehicle manufacturers rather than making the cars themselves.”
Moving forward, Waymo outlines the goal that this collaboration ignites future “opportunities to collaborate with Honda to advance fully self-driving technology and make our roads safer,” with hopes to add Honda’s vehicles instilled with GOOGL technology to the existing fleet already under evaluation throughout four U.S. cities.