Will Google and Apple Take Over the Global Auto Industry?

Tech giants Google and Apple are both rumored to be eyeing a major new market to transform: auto manufacturing. They may be edging towards mass production of new vehicles that could be as revolutionary as Henry Ford’s Model T. Or maybe they’re content to develop enabling technologies to let current automakers add self-driving capability to their products.

Fiat/Chrysler head Sergio Marchionne has branded them “disruptive interlopers” and if they truly want to supply vehicles to consumers, then the world’s major carmakers will have a major battle on their hands.

It’s nearly impossible to tackle the world’s largest automakers head-on in major volume categories like light vehicles. There’s just no way to innovate around 100 years of development and global knowledge of mass production. But on the edges of the market, such as in electric cars, entrepreneurs have taken products like the Tesla to market with some success.

Apple grabs engineers from Tesla and A132

Apple is apparently going after Tesla engineers, with Bloomberg reporting that Apple has offered some employees 60 percent raises and $250,000 signing bonuses to jump ship. Few have accepted the offer, and the full extent of Apple’s recruiting drive is unclear. The big dollars tabled by Apple to recruit Tesla personnel suggests that they’re seeking engineers who have expertise specific to Tesla, namely electric drivetrains.

More telling is Apple’s raid on battery developer A123 Systems, creators of an advanced lithium iron phosphate technology.

Battery management expert Ken Chisholm is chief technology officer at Vecture Inc. He notes that A123’s technology is about more than souped-up cell phone batteries. “A123 uses a nanoparticle construction; it allows a battery to accept high charging current rates. And lithium iron phosphate batteries can discharge at much higher rates also. It is in the anode and cathode construction.“

In a motive power application, battery life expectancy is also critical and here the new technology has another advantage according to Chisolm: “high-performance lithium is only good for 200 or 300 cycles. Iron phosphate is good for several thousand cycles. Toshiba is developing a lithium titanate technology good for up to 12,000 cycles. Lithium titanate can produce even higher rates of charge and discharge. Consumer goods need 8 to 10 year lifetimes.”

Is there a disadvantage to lithium iron phosphate technology? From a performance perspective, the only issue is energy density, which is inferior to other advanced battery technologies. This makes A123’s technology ideal for electric cars, but a nonstarter for handheld consumer electronics like cell phones and tablets.

Industry insiders reporting on multiple websites state that Apple’s secret electric car enterprise is known internally as Project Titan. Bloomberg predicts a 2020 release date for its first electric vehicle, which if true, is an incredibly ambitious target for a firm with no prior automaking experience.

Whatever the outcome, the project should produce a consumer-friendly vehicle: one of Apple’s recent hires is Mark Townsend, a prominent auto concept car designer who has created designs for mainstream brands such as Porsche and Kia.

Google’s vision: Uber with no driver

Google has a competing vision, with a prototype vehicle that has no conventional driver controls at all. In Google’s model, self-driving cars would become transportation pods summoned by an Uber -like Internet service and operating more like taxis than personal vehicles. Like Apple, Google has a very aggressive predicted rollout. Google car project director Chris Urmson has declared a possible release between 2017 to 2020 making a head-to-head showdown with Apple’s self-driving car a real possibility.

Unlike Apple, Google’s project includes test vehicles currently operating on public streets, with overall test mileage approaching 1 million miles in a variety of platforms from early modified Toyota Prius sedans to the company’s latest pod-like two-seater which is designed without a conventional steering wheel and pedals. Four US states currently permit autonomous vehicles: California, Nevada, Michigan and Florida with Texas likely to enact legislation shortly.

A major question is whether the Uber model can succeed. Car ownership is heavily ingrained in Western, especially North American culture and it remains to be seen if ridesharing services can deliver convenience and cost savings that are so significant that they replace the cachet of the personal automobile.

How will major automakers respond?

While major automakers like Toyota and Volkswagen have said little about the Apple and Google initiatives, most mass media outlets have already declared Apple and Google the winners in the autonomous vehicle race.

The reality is not so certain.

There is a yawning chasm between small-scale boutique automaking and mass production of millions of units at a sub $30,000 retail price. Some analysts believe that both Apple and Google are really creating autonomous vehicles as technology drivers that will propel their software platforms. The goal may be the kind of market dominance that Microsoft enjoys in the personal computer space. The strategy would see Google or Apple-licensed software built into conventional vehicle platforms built and marketed by the familiar automakers.

Automakers do have alternatives to Apple and Google should they decide to develop independent technologies. Processor-maker NVIDIA recently introduced the DRIVE PX self driving car computer which will be available as a development platform in May. Early units will be delivered to automakers, Tier One suppliers and research institutions.

NVIDEA’s board is no larger than a typical automotive central processing unit, but contains twin Tegra X1 processors delivering 2.3 teraflop performance. That’s enough processing power to accept data streams from a dozen camera inputs plus other driver assistance sensors running simultaneously. NVIDIA’s near production-ready hardware removes a major obstacle to cost effective delivery of autonomous vehicles.

Software of course, is where Google and Apple have the advantage but with the exception of the code, sensors and actuators, the majority of autonomous vehicles’ structure and value is identical to today’s cars and trucks.

It is highly unlikely that even with Apple’s prodigious cash reserve, or Google’s lead in prototypes, that either firm can catch up with a century of mass production evolution enjoyed by today’s major carmakers. The alternatives are a buyout of an existing automaker or more likely, a deal with one of the majors.

What's in the game for Apple and Google?

Logically, the goal for the software vendors is a software licensing regime that results in one dominant autonomous vehicle operating system, available in all automakers cars and light trucks. Just as most laptops ship with a prominent “Intel Inside” sticker near the keyboard, Toyotas, Fords, Volkswagens and others may sport a “Guided by Google” label on the dashboard.

In any case, 2020 is an incredibly aggressive timeline. Look for limited functionality in five years, perhaps autonomous open highway driving or a driver monitoring rather than full autonomy. There are lots of potholes and traffic cops out there: even teraflop-level CPU’s can only process information so fast.