BMW Is On Verge of Adding Automakers to Self-Driving Consortium

(Bloomberg) -- BMW AG, long an advocate of collaboration among rival manufacturers in the race toward self-driving cars, is in talks with at least two peers about joining its automated-driving group and expects to announce new members in the next three to four months.

Companies that initially tried to go it alone are realizing the immense research costs and daunting technological challenges and are deciding to partner up, Klaus Froehlich, BMW's head of development, said in an interview at the Los Angeles Auto Show last week. BMW is currently talking with two or three big carmakers about joining the consortium, he added.

“We have a lot of traffic at the moment,” Froehlich said, referring to the number of manufacturers expressing interest. “In 2015 to 2016, everybody thought he will make it; he will be superior.”

BMW started its self-driving coalition in 2016 with Mobileye, the computer-vision company that's since been acquired by Intel Corp. for about $15 billion. Fiat Chrysler Automobiles NV joined in August 2017. BMW also has added a slew of suppliers, including Aptiv Plc, Continental AG, and Magna International Inc. The group aims to develop fully automated driving systems by 2021.

$1 Billion Cost

The first generation of technology for more sophisticated partially autonomous driving systems costs about $1 billion and will serve as building blocks for future iterations that will be commercialized, Froehlich said. Car companies that spent this and now are looking to partner realize they will have to discard earlier versions of their tech and replace it with jointly developed software, he said.

“They have to invest the first billion, already knowing that this tech will not survive,” he said. “You have a lot of sunk costs.”

Froehlich said China will become the world leader in automated driving, because the U.S. approach of letting individual autonomous-vehicle companies test in different cities is “a little bit of anarchy.” European regulators are too slow in updating laws to adapt to even the early stages of autonomous-driving technology, he said.

China has “good companies, software, hardware companies; they are expanding to very powerful chipsets, and there's a political will, its very clear,” Froehlich said. “On electrification, they were also quite late; now they're the lead market. It will be the same with on-demand mobility.”

To contact the reporter on this story: Gabrielle Coppola in New York at gcoppola@bloomberg.net

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Anthony Palazzo, Melinda Grenier

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