After the Obama administration invested a hefty $5 billion into the automotive industry, and based on several automakers’ intentions to join the self-driving car race, it appears that the automotive industry will experience a boom within a decade. While the industry giant Tesla Motors Inc. (NASDAQ:TSLA) is rolling out new updates for its Autopilot program, General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F) have shared their desires to enter the expanding market.
The largest automaker in the US plans to give Tesla a tough time, as it has acquired Cruise Automation for over a billion dollars to rapidly develop its autonomous car technology. The startup’s deep software capabilities would ensure that General Motors does not lag in the fast-growing industry.
Cruise will become part of General Motors’ Autonomous Vehicle Development Team, currently headed by the Autonomous Technology and Vehicle Execution Vice President Doug Parks; however, it will function as an independent unit from its headquarter in San Francisco, CA. Founded in 2013 by Kyle Vogt, Cruise has been swiftly developing and testing drive-less technology. Mr. Vogt will now serve General Motors and help it create new technologies. The acquisition, which will close in the second half of 2016, is General Motor’s latest move to continue working on personal mobility after it acquired a ride-hailing service, Lyft, earlier this year.
Conversely, Ford Motor Company (NYSE:F) has created a new unit, Ford Smart Mobility LLC, which will develop, expand, and spend on emerging mobility technology. James Hackett would lead the subsidiary and resign from his current position on Ford’s board.
Ford Smart Mobility will operate under Ford’s business model to be an automotive as well as mobility company. The second-largest carmaker in the US continues to focus on key business, designing, building, marketing, financing, and serving all the automobiles in its portfolio. Ford has initiated autonomous driving tests and claims itself to be the first player to do so in a snowy environment.
Both the American auto giants plan to compete against Uber with their self-driving cars. Morgan Stanley’s Adam Jonas predicted last year that Tesla would be the first car manufacturer to become the next-Uber. However, the young car maker seems to have different plans for now. Despite not showing any interest in making a car-mobility service, it remains the market leader in the industry as no other car company currently provides autonomous driving features like self-steering, lane changing, and summing vehicles.