Renault (& Co) & Google – Form over substance.

Very little substance to this agreement.

• Renault and Nissan have signed an exclusive deal with Waymo that signals a further fracturing of the Renault Nissan Mitsubishi alliance and when picked apart the deal doesn’t really mean anything.
• The deal has clearly been worded extremely carefully to give all parties as much wiggle room as possible, meaning that this is not even close to a deal by Renault or Nissan to use Waymo’s autonomous driving solution.
• The deal states that both Renault and Nissan have entered into an agreement with Waymo, exclusive for a period, to explore driverless services for people and goods in France and Japan.
• This is a statement that has been deliberately worded to be very vague but, from which, I can draw the following conclusions.
  • First, Android automotive: The alliance has already signed a deal to use Android Automotive in its vehicles and for the vehicles that use it, Waymo autonomous driving is a natural choice.
  • This is because these vehicles will already be sharing data with Google and so adding Waymo is not going to change the situation around data ownership at all.
  • Waymo is currently the leader and, in this scenario, is a choice with no downside.
  • Second, Nissan autonomous driving: This would appear to a slap in the face for Nissan’s in-house effort with the conclusion that it is not good enough.
  • RFM ranks Nissan’s effort as the best in-house offering from any OEM and 7^th of 30 overall.
  • This is much better than Tesla which RFM ranks as 20^th out of 30.
  • However, car companies are huge, bureaucratic and political organisations and it is possible that Nissan’s offering was snubbed for some other reason.
  • Third, commitment: There is clearly no commitment on Renault or Nissan’s part to do anything with Waymo in the long run and vice versa.
  • However, I would argue that Waymo’s need is greater than either Renault or Nissan.
  • This is because other than Lyft, Waymo has no route to market because it does not manufacture or control any of the devices that will carry its product.
  • This is why this deal is significant for Waymo as it is the first concrete route to market that it has managed to obtain.
  • Fourth, The Alliance: Although the alliance’s logo is used at the top of the press release, Mitsubishi is not involved.
  • Furthermore, this reads like two independent companies that have signed a joint deal with a third party, one in France and the other in Japan.
  • Hence, I conclude that this deal has been struck by the operating companies rather than the alliance itself, raising further questions about the longevity and stability of the alliance.
  • Ever since the arrest of Carlos Ghosn (chief alliance architect), I think the future of the alliance has been in doubt which was further exacerbated by the potential deal with Fiat.
  • The deal with Waymo should have been pursued by the alliance and the fact that it has not speaks volumes to the fragility of the alliance.
• The take-home message is that this deal doesn’t really mean very much.
• Renault and Nissan might use Waymo or they might not which is absolutely no change from before the announcement.
• They will explore potential usage of Waymo which makes complete sense as it appears to be the leader at the moment.
• But then again, who would not evaluate Waymo just in case it ends up as the dominant self-driving offering?
• However, what it does do is increase marginally the likelihood that Renault and Nissan go full steam down the Android Automotive route.
• This is simply because if they decide that they have to go with Waymo for autonomous driving, it will make using Android Automotive an easier and more obvious pill to swallow.
• Hence, I do not see this agreement as meaning very much nor do I see it advancing the cause of Waymo very far although it does open a badly needed route to market.
• Waymo remains the number 1 solution being developed today (of those that provide data) although the gap to Cruise is closing.
• I am still very cautious on the timing of autonomous driving reaching commerciality and am keeping my 2028 target for now.
• Many of the players will not have money to last this long and there are already signs of consolidation beginning (see here).
• I would not want to be involved in the smaller also-rans.