There can be no doubt: The development of autonomous vehicles is going to require more — way more — time and money than people thought just a few years ago.
We have long argued on these pages that the profound changes wrought by new mobility technology — electric vehicles, as well as autos that drive themselves — will be a long time coming. The latest evidence that the disrupters' excitement is facing hard realities: Alphabet this month brought on a passel of investors to help fund Waymo, formerly known as Google's self-driving car project.
Capital transactions and private equity investments happen every week, but this is significant because Waymo is considered a high-potential piece of Alphabet's digital empire — and a leading player in disrupting the $7 trillion mobility industry.
It's not like Alphabet is strapped for cash. Google's parent company earned $34 billion last year on more than $160 billion in sales. It ended 2019 with almost $120 billion in cash — enough to buy all of Tesla's stock or that of GM, Ford, Fiat Chrysler and PSA Group.
A popular view last year was that development of self-driving cars was held back by the lack of regulation making it legal. That is true, but the technology is also far from ready for free-range use on the wilds of America's roads.
Human nature — person-driven vehicles will be on the road for perhaps a quarter-century alongside computer-guided ones — as well as the vagaries of the physical world make automated driving a particularly confounding challenge.
The mobility revolution is still several years and billions of dollars away. Some automated driving startups have found themselves without enough funding to keep going, while other endeavors have been bought by automakers and killed or absorbed.
Alphabet's implied wariness doesn't mean that Waymo is a money pit. It's still an attractive investment opportunity, and operating partners AutoNation and Magna International are probably grateful to be in on the deal along with the likes of Silver Lake and Andreessen Horowitz. Surely plenty more will be glad to sign up.
They'll just have to be patient while they wait for a return on their investment.