Atanas Stoyanov
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Alphabet’s Template For Rolling Out Self-Driving Automobiles


Google parent Alphabet Inc. (NASDAQ:GOOGA) has decided to move its self-driving-car project from the research lab to a stand-alone business. According to Project X chief, Astro Teller, the move serves as a big step in the path to commercial operations.

Finances for the car group were separated from X Jan. 1. Now the legal and corporate moves are underway to make the new company independent.

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Generating Revenue

In stand-alone mode Alphabet’s car group would like be expected to begin generating revenue soon – though not necessarily a profit right away.

Although Teller declined to discuss a business model for the group, Teller said, “The world is going to have cars that are sold to individuals and cars that are shared by individuals, and which one Alphabet does, we have our thinking on it,” he said. “But right now we’re very focused on safety.”

Incremental Roll Out

The company is expected to roll out self-driving cars incrementally over the next few years in what are considered favorable cities or locations. These would include areas with fairly consistent weather, nice roads less complex driving conditions.

Teller compared the process to teaching a teenager to drive. Conditions will be controlled at first restrictions in place to prevent accidents. Over time, restrictions would be lessened and eventually lifted all together.

Not A Semiautonomous Approach

Companies, including Ford Motor Co. (NYSE:FC), Mercedes, Uber and others have taken a semiautonomous approach, adding technology incrementally while still requiring drivers to be in control.

Not so with Alphabet whose cars have been fully autonomous from the beginning. According to Teller, “You press a button and tell the car where you want to go.”

Not The First Rodeo

Although the entire automotive industry has been working on autonomous driving technology for a long time, few companies have been at it as long as Alphabet. At the beginning of this month, after seven and a half years, Alphabet’s X division hit the 2 million road miles mark for fully autonomous vehicles.

That represents hundreds of millions of interactions with vehicles, pedestrians and cyclists. In short, Alphabet has been “around the block” in a self-driving car many, many, many times.

Related: SOURCES: GOOGLE WILL SOON LAUNCH LIVE TV ON YOUTUBE

The One To Buy

All this has been part of the reason people like Oppenheimer’s Ari Wald point to Alphabet as the one big-cap tech stock to buy.

While both Apple Inc. (NASDAQ:AAPLB) Amazon.com Inc. (NASDAQ:AMZNC) report this week, Wald’s focus is on Alphabet. Long-term Wald says he believes the stock will break through $800 “resistance.”

Wald believes the company is following what he sees as a long-term uptrend that has been in place since January 2015.

On CNBC’s Trading Nation Wald said recently, “We think that it’s setting up a new leg of outperformance in the direction that [Alphabet] has already established long-term uptrend.”