Alphabet Inc.'s Self-Driving Car Project Becomes a Company, Gets a Name

By Daniel

Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google self-driving car project is no longer just a project. Starting today, the tech company's self-driving car efforts have graduated from the Google X research unit, as one of Alphabet's "moonshots," to an official Alphabet business called Waymo.

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Self-driving car. Image source: Waymo.

"Waymo stands for a new way forward in mobility. We're a self-driving technology company with a mission to make it safe and easy for people and things to move around," Waymo said in a blog post on Tuesday.

Alphabet's launch of Waymo comes nearly eight years after the company began working on self-driving cars, but it enters what is quickly turning into a fiercely competitive market as Tesla Motors (NASDAQ: TSLA) asserts it is already including self-driving sensors in every vehicle and as other auto manufacturers, tech companies, and ride-hailing services explore ways to monetize the nascent technology.

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Meet Waymo

Waymo was careful to emphasize that this is not the beginning of Alphabet's efforts in this important space, but rather the culmination of years of work.

"Waymo may be a new company, but we're building on advanced self-driving technology developed over many years at Google," said Waymo chief executive John Krafcik in the company's blog post.

Waymo technology. Image source: Waymo.

Alphabet knew it was time for Waymo to begin the process of becoming its own company when the former Google X project completed "the world's first fully self driven car ride" in late 2015, Krafcik said. Navigating through Austin's suburbs with legally blind passenger Steve Mahan, Alphabet says the drive reflected everyday driving situations.

Mahan explained the importance of this milestone:

Self-driving technology -- not self-driving cars

Interestingly, in conjunction with the announcement of Waymo today, Alphabet is reportedly backing off any plans to manufacture and sell its own self-driving cars, opting instead to partner with auto manufacturers in order to deploy the technology, according to The Information's Amir Efrati.

And a comment from Waymo's Krafcik during a press conference on Tuesday seems to confirm the new company's choice to abstain from auto manufacturing for now. "We've been really clear that we're not a car company," Krafcik said (via The New York Times). "We're not in the business of making better cars. We're in the business of making better drivers."

Tesla recently released a video of a Model S driving itself. Image source: Tesla Motors.

Alphabet's decision to refrain from manufacturing its own self-driving vehicles differs from Tesla's emphasis on both the self-driving technology and the manufacturing of self-driving vehicles and it means Tesla doesn't have to worry about the technology giant becoming a direct competitor -- for now. However, it's worth noting it was never certain Alphabet ever intended on manufacturing its own vehicles in the first place.

Given how competitive and capital intensive the auto market is, focusing solely on the self-driving technology may arguably be the better move for software-centric Alphabet's Waymo. Indeed, Waymo isn't the only major company to acknowledge the challenge ambitious manufacturing plans could bring about. By focusing on the autonomous driving software instead of building self-driving cars, Alphabet's Waymo vision mimics a recent report that Apple has also shifted its focus from building its own self-driving car to emphasizing the development of the underlying technology for autonomous driving.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Daniel Sparks owns shares of Apple and Tesla Motors. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, and Tesla Motors. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.