Ford & Google – Full of GAS?

More about infrastructure than digital vehicle services.

• Ford has struck a far-reaching deal with Google that encompasses far more than just the software and services in the vehicle cockpit which I think Ford will tinker with and may never deploy.
• Ford and Google have agreed to a 6-year co-operation that commences now but the effects of which will not be seen until 2023.
• The main features of the deal include:
  • First, Google Automotive Services (GAS): This is an iteration of Android Auto except that the operating system of the infotainment unit is Android with Google’s services running in situ.
  • BlackBerry and Sync will be replaced with Android and Google Maps and Google Assistant will become default in the vehicle.
  • Although GAS is Android-based it is not subject to the same requirements for consistency and conformity that the smartphone makers have to abide by.
  • For example, the deal that GM struck with Google in September of 2019 appears on the surface to be very similar to this one in that the assistant and navigation will be embedded and set as default.
  • However, at the same time, GM is creating its own unique infotainment features which means that it can pretty do what it wants in terms of fragmenting the APIs and user experience.
  • GM can also allow Google as much or as little access to the core vehicle data that it wants.
  • These terms will have already been agreed but they have not been made public.
  • The only difference between Ford’s announcement for GAS in the vehicle and GMs is that Patrick Brady did Google’s quotes in 2019 whereas it is Sundar Pirchai this time.
  • I suspect that this is because this deal has far greater scope outside of the vehicle and covers much more than just GAS.
  • Google’s history with GAS is poor to say the least.
  • Two of the big deals that Google has struck in the area of infotainment software (Renault Nissan Mitsubishi and GM) are massively behind on their promises.
  • GM expected to have Android and Google embedded in most of its brands beginning in the 2021 model year (see here) but of this there is no sign.
  • The Renault Nissan Mitsubishi Alliance is a similar story with lots of noise and fanfare but very little follow through in terms of vehicles on the road.
  • Unless I am reading this wrong, it appears that the terms that Google sets for these deals look OK on paper but when the hard analysis is done and the real relationship starts, its appeal rapidly wanes.
  • These deals have no volume commitment that I am aware of and as such, Ford, GM and the Alliance are not committed to shipping any GAS vehicles should they decide that they do not want to.
  • The OEMs continue to be sceptical with regard to Google’s long-term motivations and they are right to be as what Google has done in smartphones is exactly what it wants to repeat in vehicles.
  • There are probably better ways forward while Google continues to offer sub-optimal terms for OEMs and the more they push back, the better the terms will become while they still are the gatekeepers to the treasure trove of vehicle data.
  • Second, Google Cloud: Ford will begin using Google Cloud as its preferred cloud provider in order to get access to Google’s best-in-class AI, data science and machine learning.
  • This will be used to help digitise the user’s journey from research to purchase of a vehicle as well deploying AI in its manufacturing to make it faster and more efficient.
  • It will also use this infrastructure to manage the relationship with the vehicle owner post-purchase in so that service requests, recalls and trade-in opportunities are delivered to the right users at the right time.
  • I think that from Ford’s perspective, this is the meat of the deal that it has struck with Google.
  • The new working group called Team Upshift is comprised of employees from both companies and it is tasked with driving the innovation that is required to deliver on this vision.
  • In its own words, the main areas of focus for Team Upshift are plant modernisation, retail experiences and creating new ownership offers and managing the user relationship.
  • When Ford refers to personalised experiences it is these sorts of areas that it is referring to rather than vehicle digital services and data monetisation.

Take Home Message

• The biggest loser from this deal is Microsoft which has a long-standing relationship with Ford for the cloud and in vehicle software.
• BlackBerry could also be hit as it supplies the QNX software that sits underneath Sync, but I am far from convinced that Ford is fully committed to replacing this with GAS.
• I think that Ford’s position is that it is going full-steam ahead with all of the areas where Google can really help which is in manufacturing, customer management and so on and is following a suck-it-and-see approach to GAS.
• Even if it does move to Android, there is nothing to prevent it from making enough alterations such that Google is as locked out of the vehicle data as it is today with Android Auto.
• RFM has long believed that the one thing that can save the OEMs from long-term declines in vehicle shipments is digital services meaning that letting Google into one’s vehicles is like letting the fox into the hen house.
• All it takes is one “would you like Google to make your services better?” notification from Google followed by “yes” from the user for Google to be able to virtually wipe the OEM from the infotainment unit.
• This is no big secret, and this combined with Google’s terms and conditions are probably what has made those that have signed up, think twice about letting this out into the wild.
• I expect Ford to be no different.