Fiat Chrysler Automobiles NV and Alphabet Inc.’s Google plan to develop about 100 self-driving prototypes based on the carmaker’s Pacifica minivan, the companies said Tuesday.
The collaboration is the first phase of a joint project to create autonomous vehicles, people familiar with the matter said. The vehicles will be used by Google to test its self-driving technology. The companies would remain free to cooperate in driverless technology with other partners, said people familiar with the matter.
Fiat won’t license any of Google’s self-driving technology, spokeswoman Dianna Gutierrez said. The minivans will be part of Google’s test fleet, she said in an e-mail.
The accord is Google’s first with a major automaker since the technology giant began developing self-driving cars on its own in 2014. Fiat Chrysler Chairman John Elkann said last month that the Italian-American carmaker should work with “new industry participants” like Google and Apple Inc. rather than compete with them.
Fiat Chrysler Chief Executive Officer Sergio Marchionne, who mentioned a possible partnership with Google in December, has been directly involved in talks with the U.S. company, people familiar with the matter said in April.
Google, which has run more than 1.4 million miles of tests on its own driverless prototypes, has been in discussions with various auto manufacturers about working together. A deal with General Motors Co. couldn’t be concluded because of disagreements over ownership of technology and data, a person familiar with the matter said in April.
Partnering with Google is in keeping with Marchionne’s approach to development. He contends that carmakers waste capital developing multiple versions of the same technology and that the industry should consolidate to become more profitable. He intends to put Fiat Chrysler in a better position for a merger by the time he steps down as the manufacturer’s CEO in 2018.
The partnership makes sense for Google, which needs more cars to develop and test its autonomous technology, but doesn’t want to invest in factories to build them. For Fiat it’s a way to get a window into new technology and helps the company prepare for a time when self-driving cars may be a big part of the transportation business, said Maryann Keller, an independent auto-industry consultant in Stamford, Connecticut.
“Marchionne is boxed into a corner and doesn’t have the resources to compete with Google, Apple, General Motors or Toyota,” Keller said. “So this works. And Google is an information company. They don’t want to spend the money or take the drag on their stock price by building cars.”
Marchionne may also be looking at a future when traditional selling points like horsepower, steering and handling aren’t as relevant because cars drive themselves, Keller said, making connectivity, information and entertainment systems more important. Google can provide that while Fiat builds the cars, she said.
“That’s a scary thing for car companies,” she said. “This is the path available to Marchionne to use the resources that he has.”