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Traditionally fierce rivals, BMW and Daimler are teaming up to challenge a new wave of high-tech competitors, such as Uber and Alphabet's Waymo unit, by launching five mobility services joint ventures.
The two German-based luxury automakers first announced plans to team up last spring and are now ready to set in motion projects including ride- and car-sharing, as well as electric vehicle charging. The project, which is expected to see them invest a combined 1 billion euros, or $1.13 billion, will also create an initial 1,000 new jobs, BMW and Daimler announced at news conference Friday morning in Frankfurt.
The project reflects the dramatic shift expected to transform the auto industry over the coming decade and, in the process, it threatens to sharply reduce new vehicle sales. The Boston Consulting Group, for example, has estimated that nearly a third of the miles that Americans will clock on the road by 2030 will be in electrified, autonomous vehicles operated by ride-sharing services.
Virtually every major automaker has now launched some form of mobility services program, whether independently or in partnership. But the challenges are significant, as Ford Motor learned before the recent announcement that it was killing off its own ride-sharing service, Chariot.
As part of the new joint venture, Daimler will merge its Car2Go car-sharing service with an assortment of mobility services operations at BMW. Going forward, the new program will focus on five areas:
"These five services will merge ever more closely to form a single mobility service portfolio with an all-electric, self-driving fleet of vehicles that charge and park autonomously," said BMW Chief Executive Harald Krueger.
Exactly how the new world of mobility services will shake out is far from certain, but both BMW and Daimler have expressed a desire to get out into the forefront. Not all of their efforts will be included in the new venture. They will, for example, maintain separate programs for the development of both battery-electric and self-driving vehicles – though even there, they have found ways to work together, both German companies investing in the purchase of Nokia's former high-resolution mapping service, a technology considered essential for autonomous vehicles.
Alliances are becoming an industry norm, rather than the exception, especially when it comes to electrification, self-driving technology and mobility services.
Honda last October announced it would invest more than $2 billion to purchase a stake in General Motors' Cruise Automation subsidiary and partner with GM in a planned autonomous ride-sharing service. The two carmakers previously allied in battery and hydrogen fuel-cell joint ventures.
GM's ride-sharing project will take aim at the new Waymo One operation that recently launched in Phoenix and which it is planning to soon roll out to 20 other U.S. cities. Fiat Chrysler Automobiles, Jaguar Land Rover and Nissan all plan to provide vehicles for use by Waymo One.
These new partnerships are rarely monogamous. Daimler also has a nine-year-old relationship with the Renault-Nissan-Mitsubishi Alliance. It's not clear if those three manufacturers might now look at working with the BMW/Daimler partnership but, during the Friday morning news conference, Daimler CEO Dieter Zetsche said, "Further cooperation with other providers, including stakes in start-ups and established players, are also a possible option."
Some automakers have chosen to go it alone when it comes to mobility services. Ford Motor, which has redefined itself as a "mobility services company," rather than an automotive manufacturer, has set up a variety of new projects. But it has found out how difficult it can be to reshape its business. Last month, Ford announced it would end the Chariot project due to high costs and low returns.
Like BMW and Daimler, several traditional automakers see a future in which automobiles will play a combined role with other forms of transportation. Sweden's Volvo and France's PSA, are setting up services that allow a traveler to use a single app to get from point A to point B, however it takes. A user might get a ride-sharing service to pick them up from a suburban home and take them to a commuter train. Once in a central city, meanwhile, they could pick up a bike or e-scooter, all in one step.
"We are steering very clearly towards growth, and together we will continue to invest consistently in our joint mobility services. As well as linking in additional transport options, we want to reach out to even more people in towns and cities across the world, thereby improving the quality of urban life," BMW's Krueger said.