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Ford said that starting in 2023, all of its cars and trucks would come with Google Maps, Google Assistant, and the Play Store already installed. When CEO Jim Farley made the announcement, he said that the partnership between his company and the search giant was a chance to “reinvent” the car, turning it into a mobile office with more connectivity than any phone or laptop.
“We were spending hundreds of millions of dollars every year just to keep up with a generic experience that couldn’t compete with your cellphone,” Farley said on CNBC when he announced the six-year deal with the tech giant.
The deal gave Ford some much-needed prestige and gave Google a chance to show off its products to millions of drivers and their passengers. But many people who keep an eye on the tech industry saw the Ford-Google car of the future in a different way. They worry that tech companies will soon do to cars what they did to phones: tie their exclusive operating systems to specific products to force out competitors and control a huge part of the global economy.
The smartphone wars are over, and Google and Apple came out on top. Now, they and Amazon are fighting over who gets to decide how you use your car. All three see cars as the next big way to reach American consumers, who spend more time in their cars than anywhere else besides their homes and jobs. After struggling for years to add cutting-edge technologies to cars on their own, automakers are becoming more and more eager to get help from Silicon Valley. They want to use both its technology and its profitable business models, in which customers pay monthly for ongoing services instead of buying a product once.
Now, after missing the boat when the tech giants dominated the smartphone market, some policymakers and regulators think the battle over connected cars is a chance to stop potential monopolies before they form.
In their federal antitrust complaint, the state attorneys general who sued Google in 2020 for monopolizing online search said they were worried about the company’s move into self-driving cars. In Europe, meanwhile, the EU’s competition authority has started looking into Google’s connected car contracts.
Charlotte Slaiman, who is in charge of competition policy at Public Knowledge, said, “It’s really hard to fix behavior that hurts competition five or ten years later.” “Buying a car is a long-term choice for many people. If a customer is stuck with a certain company for five to ten years because they bought a car from that company, that can make it harder for other companies to compete.
There is a lot at stake. Tech companies and automakers see a future where people can easily do work, play, and chores from their cars, like ordering groceries, setting up work meetings, or watching TV. The information from these vehicles could also be used to automatically update maps, let city workers know about potholes, and tell stores where their customers come from.
Jim Heffner, a vice president at Cox Automotive Mobility who specializes in autonomous and connected vehicles, said, “The ride is no longer the point.” “Data is the main thing. Apple, Google, and other companies want to be in the middle of that.”
A search for what’s new and exciting
The time it takes to make a car is three to five years, which is a long time compared to how fast technology is changing. James Hodgson, an analyst for autonomous vehicles at ABI Research, said that the technology in a new car is already years out of date by the time it gets to the dealer’s lot. Meanwhile, the speed of connectivity and consumers’ desire for their favorite devices move much faster.
He said that this led car companies to move the entertainment functions from the dashboard to the phone so that customers could use their favorite phone technology while driving. Apple’s CarPlay or Google’s Android Auto can connect a smartphone to the car’s system, and almost all cars today can do this. Apple first announced CarPlay in 2014. The next year, Google did the same with Android Auto. A driver can make phone calls, listen to music, or stream Netflix, but all of this is done on the phone and shown on the car’s speakers and screens.
By integrating the software directly into the car, tech companies now aim to eliminate all forms of technology.
Back in 2015, Google and Ford started talking about working together to combine Google’s software and self-driving car company Waymo with Ford’s expertise in making cars. But the deal fell through because Ford wanted the technology to be used only in its cars. Google, on the other hand, wanted to be able to sell its self-driving technology to other car companies. Ford’s then-CEO Mark Fields was fired after the deal fell through because of worries about the company’s lack of progress in the self-driving space.
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Google, meanwhile, kept adding more Android features for cars. Google made deals with Volvo, Stellantis (which owns Chrysler, RAM, Jeep, and Plymouth), and General Motors.
Like with smartphones, manufacturers can just use the Android operating system as the base software for their entertainment unit. But if they want Google Maps or Google’s voice assistant, they have to sign a contract with the search giant.
Google Automotive Services, or GAS, is a package that the company sells to automakers as an all-or-nothing deal. For example, if a car company wants to use Google Maps, it also has to agree to use Google’s Play Store and voice assistant.
Honda, Volvo, and the Renault-Nissan-Mitsubishi Alliance have all agreed to the package. Chrysler, Jeep, and Plymouth only use the Android operating system, but they chose Amazon’s Alexa as their main voice assistant and TomTom for navigation.
General Motors did the same thing. Its cars will use Google starting with the 2022 models. In older models, the company had its own navigation system called Maps+. It was based on Mapbox, which is one of Google Maps’ few remaining competitors.
And finally, Ford’s new CEO, Jim Farley, tried to beat them all by making a deal for the company’s engineers to work directly with Google’s software designers to build a self-driving car with technology built into it. Team Upshift was the name they gave the group.
Farley said on CNBC that “partnering is one of the most important parts of our strategy.” “That means we have to stop doing generic things like navigation systems and a lot of the entertainment in cars where we don’t add any value.”
Google would do all of that and more under the deal.
Setting standards
Google’s involvement in the auto ecosystem is getting so big that a leading industry standards group, the Connected Vehicles Systems Alliance, said in October that it is working on creating international benchmarks for cars’ software integration with Android.
In Chandler, Arizona, a suburb of Phoenix, Waymo, which was spun off from Google’s parent company Alphabet in 2016, started offering self-driving taxi services. This summer, the business started offering service in San Francisco. The majority of the city is accessible to riders chosen by Waymo who request service through an app, but not downtown.
The company that makes self-driving cars also have deals with Volvo, Stellantis’ Chrysler, Jaguar Land Rover, and the Renault-Nissan-Mitsubishi Alliance to put its technology in their cars, but none of them have hit the market yet.
Apple, on the other hand, is waiting in the wings, mostly with its “Project Titan” self-driving car project, which has been in the works since 2014. During that time, the project has gone back and forth between making just the software for self-driving and making a car that can drive itself. It has also been put on hold more than once, most recently in September, when the project’s leader, Doug Field, an engineer who helped make Tesla’s Model 3, left to work for Ford.
Even though Apple CEO Tim Cook said in 2017 that the company was working on technology to make cars drive themselves, not much is known about the company’s car project. When asked for a comment on this story, the company didn’t give one.
Cook told Bloomberg that the auto industry is on the verge of a big change. “We kind of think of it as the biggest AI project ever.”
The company has applied for a lot of patents related to cars, including ones for displays that would show information on the windshield and airbags and safety systems for seats that face backward. Using these patents, the U.K. car rental company Vanarama made a model of the Apple car that looks like a sleek SUV and has seats that can turn around to face each other.
Apple is said to have talked with Hyundai, Nissan, and Toyota over the years about becoming partners to help make its cars. Early in 2020, Apple also talked about buying the electric vehicle startup Canoo, whose vans will come out next year with no emissions. In the end, those talks didn’t work out, and Canoo chose to go public last year.
ABI’s Hodgson said, “Apple has always been less willing to let someone else use their brand.” “They want to be in charge of the whole thing.”
Amazon, the biggest online store, is also very interested in connected vehicles, both as a way to reach customers and for its own delivery needs. In 2014, the company tried to compete with Google and Apple by making the Fire phone, which didn’t work out. The fire was a commercial failure, but one part of the project, Alexa, lived on and is now a key part of Amazon’s plans for cars.
Alexa Auto, Amazon’s version of the popular voice assistant for cars, started out as just a smartphone app that you could connect to your car through Apple Car Play or Google’s Android Auto. But using Apple or Google to access the car’s systems limited what Alexa could do, so Amazon changed course and started working directly with automakers to build their service into the car.
In 2018, BMW and GM cars were the first to come with Alexa. Since then, more car companies, like Audi, Jeep, and Land Rover, have added voice assistants. With Alexa built-in, drivers can lock or unlock the doors, start the engine, and check the gas tank from smart speakers in their homes. Alexa in the car can also check the thermostat and turn on or off lights at home. She can also tell you about the weather and help you buy things on Amazon or at Whole Foods, which is a subsidiary of Amazon.
Amazon now has a version of its popular Echo speaker for cars that don’t have Alexa built-in. It’s a pocket-sized device that can be attached to the air vents on the dashboard.
A spokesperson for Amazon named Frankie Tobin said that Alexa works with voice assistants made by Ford, BMW, General Motors, and Audi.
Tobin said, “We think voice agents should be able to work together on a single device or in a car, and voice-enabled products should be made to work with multiple wake words at the same time so that customers can easily use the voice service of their choice.”
ABI’s Hodgson said that voice controls are especially appealing to carmakers because they keep drivers from taking their hands off the wheel or their eyes off the road. He said that because Alexa is used so often in homes, it already has a ready base of customers who would value integration.
Concerns tech next potential monopoly connected:
Heffner of Cox Automotive said that Amazon’s partnerships with traditional automakers haven’t been as successful as Google’s because Amazon is taking a “hybrid” approach and focusing on new players in the auto space. Last summer, Amazon bought Zoox, a company in California that makes taxis that drive themselves. The boxy, four-seat cars don’t have a driver, and the seats face each other. The cars are made to be driven in cities, and the company hopes to start offering its service soon in San Francisco and Las Vegas, but it hasn’t said when it will start doing business.
The e-commerce giant has also put money into Rivian, a company that makes electric cars. Jeff Bezos, who was CEO of Amazon at the time, said in September 2019 that the company had ordered 100,000 electric delivery vans from Rivian, which at the time was a small company making electric SUVs.
Rivian went public last month and raised almost $12 billion. This makes Rivian one of the most valuable automakers in the world, ahead of both Ford and GM. Rivian also has money from Ford and Cox Automotive.
In an interview with Bloomberg before the IPO, Rivian CEO R.J. Scaringe said that Amazon had been a great partner. Scaringe talked up “the collaborative relationship” with Amazon, whose “ecosystem of services” will be built into the vans.
The relationship is heavily in Amazon’s favor. For the next four years, Amazon has the exclusive right to buy Rivian’s vans, but it doesn’t have to buy any of them. Amazon also has the right to buy cars from other companies.
Amazon didn’t say anything about the Zoox purchase or the Rivian investment. Instead, they pointed to a blog post from February about how the retail giant plans to have net-zero carbon emissions by the year 2040.
Heffner said that Amazon wants to have the largest fleet of delivery vehicles in the world, but it wouldn’t be crazy for them to use some of the technology they develop for commercial vehicles to help their consumer business.
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