GM Plans to Make Systems for Autonomous Cars

By Georgia Wells Features Dow Jones Newswires

LAGUNA BEACH, Calif. -- General Motors Co. plans to make the bulk of the systems that go into an autonomous car, a shift from its previous strategy that thrusts it into direct competition with tech giants.

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GM wants to have a hand in the creation of the software, electrical architecture, sensors and large-scale manufacturing of the next wave of vehicles, President Dan Ammann said Tuesday.

"The approach that we are taking to that is to control a lot of that system ourselves because it allows us to move more quickly," Mr. Ammann said at The Wall Street Journal's WSJD.Live technology conference here.

At first, GM seemed eager to team up. In early 2016, for example, GM announced a $500 million investment in Lyft Inc., where Mr. Ammann sits on the board of directors, and a partnership with the ride-sharing company to develop self-driving vehicles.

But now the two companies appear more interested in going it alone. In July, Lyft said it was creating its own autonomous-car development division, and in August, GM said it had begun testing its own ride-hailing app for self-driving cars. Initial tests of the app are only for company employees, but GM plans for it to eventually become a commercial product.

Silicon Valley firms including Alphabet Inc.'s Waymo and Tesla Inc. are also developing their own systems. Waymo plans to put its technology in others' cars and not make its own vehicles.

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GM's relationship with Lyft is one example of mutual mistrust between Detroit and Silicon Valley. Auto makers have feared being turned into commodity producers making a shell for others to fill, like cellphone handset makers. GM explored partnerships with Waymo, but shifted gears after talks stalled.

In line with GM's new approach, the auto maker in 2016 acquired Cruise Automation Inc., a Silicon Valley company developing autonomous-vehicle technology, in a deal valued at more than $1 billion.

GM said on Tuesday it plans to begin testing its fleet of self-driving cars in lower Manhattan, which Mr. Ammann called "the most complex driving environment" in the U.S.

For Detroit auto makers, however, there's an added challenge: A future of self-driving cars could also mean a future in which most people no longer own vehicles. This new technology would require the companies to change their business models, and educate consumers around paying for distance traveled rather than for vehicle ownership. Mr. Ammann predicts that car sharing doesn't pose an imminent threat to auto ownership because it currently accounts for a tiny portion of vehicle miles driven.

"We are inventing a lot as we go," Mr. Ammann said.

(END) Dow Jones Newswires

October 17, 2017 16:15 ET (20:15 GMT)