Waymo announced today it will integrate its technology into a robotaxi base from Chinese manufacturer Geely. Geely owns Volvo and this vehicle was designed in Sweden, it will be under the Geely Zeekr brand and most likely be manufactured in China. China has been, for several years now, the leading car manufacturing country in the world but its cars are not seen very often in western countries and particularly not in the USA.
Up to this point, western OEMs have not faced much competition from Chinese makers. Chinese cars are not made to fit US Federal Motor Vehicles Safety Standards and can’t be sold in the USA. Chinese brands have no reputation, or even have a negative reputation compared to top western brands — that’s even true in China though it’s been changing there.
Brand is important. Surveys suggest that the nameplate on a car is the top factor in a consumer’s choice of what car to buy. (They say it’s safety when you ask them, but actual buying choices are based on several other things, including brand, performance, cost, luxury and several others.) Maintaining good reputations for their brands has been essential to keeping market position for all major global brands.
This is why the shift to robotaxi is frightening to car OEMs. Customers don’t care a lot about the brand of the car that picks them up. While you might choose between Uber
It gets even worse for the OEMs. One way the top brands have gotten their reputations is by making quality, highly reliable cars. Chinese manufacturers are new to the game. They make lower cost cars but may not have yet reached the quality levels of a BMW, Mercedes or Toyota. When people buy cars, they care a lot about whether the car is going to break down or not. When your car breaks down, even if it’s under warranty, it’s a major burden. You can get stranded. You have to arrange to get the car to the shop. You’re possibly out a car while it’s in the shop or have to arrange a loaner. On top of all that is the cost of the repair if it’s not under warranty. It’s a bad day and people pay a lot to get cars from the brands that break down less often.
Contrast that with a breakdown in a robotaxi. It probably doesn’t happen when you’re in it, so you aren’t even aware of it, and you’re sent only a properly working taxi. But if it happens to breakdown while you’re in it, there’s no calamity. The car just pulls to the side of the road while a replacement taxi is dispatched. Within a few minutes, it arrives and you get in it, and continue your trip. That’s the sum total of your trouble.
A safety related breakdown is of course unacceptable in all cars, so people will not accept cars that have those sorts of problems in any channel. To prevent this, robotaxis will be full of sensors and constantly checking the mechanical soundness of the vehicles. Every time the car applies the brakes it will notice if anything wrong happens, if any temperature gets too high, if any unusual noise is made. It will even do hard brake slams on empty roads from time to time and stress test every other safety system to assure no problem happens. Most of the non-safety issues will also be spotted this way.
This means you don’t need to make a car as well as a fine German or Japanese OEM can make one. You don’t even have to do it as well as American or other vendors do. You actually will pick the reliability to be most cost effective, which probably means cheaper parts with more frequent replacement for the minimum total cost. This is an area where the Chinese are well along and ready to play in the global markets. It’s not that they can’t or won’t develop the ability to engineer the same reliability as global leaders, it’s that they don’t need to pay the cost that comes with that.
It’s also a shortcut. Japanese companies took many decades to attain their current reputation for fine automotive engineering. The path to matching them directly is not easy.
The long-term goal for robotaxi players is to make a service that can function as a car replacement. That urban dwellers will decide to use that service and reduce the number of cars they own; first from 3 to 2 or 2 to 1, but in some cases to zero. Instead they will buy everything as a service from the robotaxi company: Vehicle, energy, maintenance, parking, insurance, financing, repairs and more. They won’t even know they have switched to a Chinese maker from a western one.
The new vehicle was custom designed to be a robotaxi. The proposed interior is very spartan, with nothing but a basic screen. This will actually make it quite inexpensive — it is surprising how much cost there is in a vehicle for things that are only there for the driver, even beyond the obvious steering wheel and pedals. In fact, it is likely that the money saved from removing those things will exceed the cost of the extra sensors and computing that must be added for a robotaxi. This is one of the things that will make robotaxi rides competitive.
This design is unlike the “vehicle beyond the car” designs of Zoox and Cruise. No effort at face-to-face seating at present, though that may come later. (It’s more social, but some people don’t like facing backwards.) It’s simple, with a flat, low floor for easy entry, though perhaps not as easy as those other vehicles. It has nice wide windows and tons of foot room. Waymo (being a child of Google) knows what people actually will do in these vehicles, namely stare at their phones. That’s why all passengers do today in all vehicles. Not much more than a comfy seat and a control screen is needed.
The western OEMs have backed off on their robotaxi plans, well most of them have. Recently we even saw a retreat from Cruise after an internal battle. They have reason to be afraid again. This won’t be the last Chinese spearhead into their markets. Aside from Waymo, it is Chinese companies who have been making fast progress in robotaxi deployment in Chinese cities. For some players, it’s going to be a bumpy ride.