German carmaker Daimler and Google’s Waymo have signed a strategic agreement to develop self-driving Class 8 trucks.
Under the terms of the partnership, Waymo’s automated driver technology will be deployed to Daimler’s (DDAIF) Freightliner Cascadia for the development of autonomous driving vehicles. The autonomous Freightliner Cascadia truck, equipped with the Waymo Driver, will be available to US customers in the coming years. Waymo and Daimler’s commercial truck unit are planning to investigate expansion opportunities to other markets and brands in the near future, the companies said.
“As leader of our industry, Daimler Trucks is the pioneer of automated trucking. In recent years, we have achieved significant progress on our global roadmap to bringing series-produced highly automated trucks to the road,” said Daimler’s Martin Daum. “With our strategic partnership with Waymo as the leader in autonomous driving, we are taking another important step towards that goal. This partnership complements Daimler Trucks’ dual strategy approach, of working with two strong partners to deliver autonomous L4 solutions that are seamlessly integrated with our best-in-class trucks, to our customers.”
Since Waymo’s start as the Google (GOOGL) self-driving car project in 2009, the company has been focusing on autonomous vehicles for over a decade. The Waymo Driver includes Waymo One, the world’s first fully driverless ride-hailing service, as well as Waymo Via, its trucking and local delivery service. To date, Waymo has driven over 20 million miles autonomously on public roads across 25 US cities, and driven over 15 billion miles in simulation.
Daimler shares have fully recovered since hitting a low in mid-May and are now trading 1.2% higher than at the start of the year.
Goldman Sachs analyst George Galliers recently double upgraded Daimler to Buy from Sell with a price target of $70.68 (28% upside potential), as the analyst is hopeful that change at Daimler is accelerating, in particular at the company’s Mercedes brand. Galliers also cited an improved truck market as one of the reasons for the double upgrade. (See Daimler stock analysis on TipRanks) Overall, Wall Street analysts are cautiously optimistic about the stock. The Moderate Buy consensus is based on 10 Buys, 8 Holds and 2 Sells. That’s with a $66.11 average price target, implying 20% upside potential lies ahead in the coming 12 months.
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