Why Google and Ford Might Be Teaming Up on Self-Driving Cars

Ford's self-driving efforts could be about to get a big boost: The Blue Oval is said to be discussing a joint venture with Google. Image source: Ford Motor Company.

Ford is in talks to create a joint venture with Google to build self-driving cars, multiple sources are reporting.

The news was first broken on Monday evening by Justin Hyde and Sharon Carty of Yahoo Autos in a report attributed to "three sources familiar with the plans."

It's not yet clear exactly what the companies are thinking. But if the deal happens, it'll be a bombshell for the auto business -- and a bold move by the Blue Oval.

What we know

According to the Yahoo Autos report, and a follow-up report by Automotive News that cited an additional "source with knowledge of the project," the companies appear to be in advanced talks to establish a venture that would combine Ford's auto-manufacturing expertise with Google's self-driving technology.

A joint venture would allow both companies to sidestep the liability concerns around self-driving cars. Google has said that it would accept responsibility if its self-driving cars were found to have been at fault in crashes, but Ford may not be ready to go there.

It's clear what both parties would get from the deal in the short term. Ford, which is just beginning the process of testing its own self-driving technology , would get the advantage of Google's extensive head start in developing autonomous vehicles.

Google, or rather Google corporate parent Alphabet , would save the several years and several billion dollars it would take to design, engineer, and mass produce a car to global quality standards from scratch.

Neither company would confirm the talks, though Google did say that it is holding discussions with automakers. And Ford CEO Mark Fields has said repeatedly that the Blue Oval is open to partnerships with technology companies that would help it bring more advanced products to its customers more quickly.

In other words, while we may not have official confirmation of a fire yet, there's an awful lot of smoke around this one.

What we don't yet know

It's not clear whether the cars manufactured by the joint venture would be for sale to consumers. We'd need to know that before we could assess what this deal really means for Ford and its investors.

But I suspect that there's another plan. Both Ford and Google have openly discussed their interest in creating ride-sharing services; it's (very) possible that the joint venture centers on a new service that will aim to compete with companies like Uber .

The reports say that the deal is not likely to be an exclusive one. Or put another way, it's very likely that Google is holding talks with other automakers and that other deals may be coming.

If this deal happens, it could be announced very soon, at the International Consumer Electronics Show (CES) in Las Vegas during the first week of January. Ford is scheduled to hold a press conference at CES that will be attended by Fields, CTO and product chief Raj Nair, research chief Ken Washington, and Don Butler, who is Ford's executive director of connected vehicles and services.

That's the crew you'd want for an announcement like this. We'll be watching.

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The article Why Google and Ford Might Be Teaming Up on Self-Driving Cars originally appeared on

John Rosevear owns shares of Ford. The Motley Fool owns shares of and recommends Alphabet (A shares) and Alphabet (C shares). The Motley Fool recommends Ford. 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 .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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