Focus: At CES, tech alliances firm up in the self-driving car wars

Hyundai

07/01/2022 12:00

By Stephen Nellis and Joseph White
    Jan 7 (Reuters) - Major automakers like General Motors Co
 GM.N , Ford Motor Co  F.N  and Volvo Cars  VOLCARb.ST  deepened
ties with key technology partners this week to gird for the
fight against electric car challenger Tesla Inc  TSLA.O  and
Apple Inc  AAPL.O  as it revs up to enter the market.
    Three chip firms - Intel Corp's  INTC.O  Mobileye, Qualcomm
Inc  QCOM.O  and Nvidia Corp  NVDA.O  - have emerged from a raft
of announcements at the Consumer Electronics Show in Las Vegas
as the leaders in locking down the brains of self-driving cars
for the next decade.
    The deals involve consolidating scores of older, slower
chips into more powerful centralized computers. But to win them,
the chip firms have had to consent to letting automakers control
key parts of the technology.
    Reuters has previously reported https://www.reuters.com/article/apple-autos-idCNL1N2IX1RZ
 that Apple plans an electric car. Bloomberg reported last year
https://www.bloomberg.com/news/articles/2021-11-18/apple-accelerates-work-on-car-aims-for-fully-autonomous-vehicle?sref=L95ZPhyn
 that the iPhone maker is aiming for full self-driving
capabilities as early as 2025.
    For automakers facing Apple and Tesla, the stakes are high.
In addition to electrifying their models, automakers are
essentially designing computers with increasing self-driving
capabilities.
    That means a big opportunity for automakers to make money
off software and services in cars long after vehicles roll off a
dealer's lot, but only if they can keep the customer
relationships and data for themselves, the way that Tesla and
Apple do.
    Automakers "that haven't been the pioneers are finally
realizing they're going to be left in the dust if they don't
change their approach," said Danny Shapiro, vice president,
automotive for Nvidia, a maker of high-powered chips.
    Nvidia this week announced deals to supply the electronic
brains for future models from several Chinese electric vehicle
startups, and is working with other automakers including
Mercedes, Hyundai Motor Co  005380.KS , Volvo and Audi
 AUDVF.PK .
    Control of technology and data are areas of tension between
automakers and technology companies, Shapiro said. "Control and
customization, and who owns the data?"
    The answer is complex because of the staggering amount of
technology required to make cars drive themselves.
    These include computer vision algorithms to help cameras
recognize pedestrians, sprawling high-definition maps of the
world's roads, and "drive policy" software to make millisecond
decisions about how the car should behave when confronted with
the unexpected.
    For chipmakers, this means they need to have every aspect of
the technology ready, but be willing to let customers pick and
choose.
    Qualcomm Inc  QCOM.O , for example, spent $4.5 billion last
year to purchase Veoneer Inc  VNE.N  to round out all the pieces
of software needed to complement its self-driving car chips. But
after winning its first major self-driving chip contract with GM
this week, those software assets will not be included because GM
has its own.
    "Our software stack is all internally developed. So we're
not taking their pieces," said Jason Ditman, chief engineer for
GM's forthcoming "Ultra Cruise" hands-free driving product.
    But for other carmakers, Qualcomm needs to have all the
pieces of a self-driving system ready, said Nakul Duggal, senior
vice president and general manager of automotive at the chip
firm.
    "Different automakers find themselves at different points of
readiness," he said. "What is critical for the automaker is that
they have to be able to build a relationship with the customer
that they're trying to acquire."
    A similar dynamic is at play in Mobileye's relationship with
Ford, which was deepened this week. Mobileye used to deliver its
camera, chip and self-driving software as an all-in-one product.
Now Mobileye will start separating out some of its system's
functions and allowing Ford to build its own technology on top
of them.
    "We provide all the outputs to Ford, and they'll run their
own algorithms on top of our outputs," Mobileye Chief Executive
Amnon Shashua told Reuters.
    The chip companies have little choice but to be more
flexible as they face significant competitors of their own. 
    Automakers had relied on three main suppliers for the
simpler semiconductors that controlled combustion engines –
Infineon, Renesas and NXP, said Phil Amsrud, a senior principal
analyst with IHS Markit.
    But the market of chip firms supplying high-powered
computing to vehicle makers is comparatively crowded, including
Chinese companies such as Huawei Technologies Co Ltd  HWT.UL 
and computer vision company Ambarella Inc  AMBA.O  moving into
the auto sector.
    "We're at a point where we might be getting too many
suppliers," Amsrud said. "If you look at automotive
traditionally there's never been more than a handful."

 (Reporting by Stephen Nellis in San Francisco and Joseph White
in Detroit; Editing by Richard Chang)
 ((Stephen.Nellis@thomsonreuters.com; (415) 344-4934;))