Just days after breaking off merger talks with the French carmaker Renault, Fiat Chrysler Automobiles has reached an agreement to source self-driving technology from a California start-up, Aurora Innovation.
Founded in 2017 by former executives from Google, Tesla and Uber, Aurora is developing hardware and software to enable cars to drive themselves. It has test vehicles on the streets of San Francisco, Palo Alto, Calif., and Pittsburgh. In a statement, Fiat Chrysler said it planned to put the “Aurora Driver” system in commercial vehicles like delivery vans. Neither company offered a time frame for when such vehicles would be on the road.
“Aurora brings a unique skill set combined with advanced and purposeful technology that complements and enhances our approach to self-driving,” Fiat Chrysler’s chief executive, Mike Manley, said in a statement.
The agreement, whose financial terms were not disclosed, underscores the heavy emphasis automakers are placing on self-driving cars for their future. It also puts Fiat Chrysler in position to join the race to field autonomous vehicles, alongside General Motors, Ford, Waymo, Uber and others. In the past, Fiat Chrysler had invested little in autonomous technology, other than supplying minivans that Waymo is using in its large test fleet of self-driving taxis.
Fiat Chrysler had proposed a merger with Renault in part to enable the two companies to share the substantial cost of developing self-driving cars and electric vehicles. The two companies also hoped the combination would strengthen their operations in Europe, where increasing environmental standards are forcing car companies to invest heavily in new technology.
A merger of Fiat Chrysler and Renault would have had an annual production of 8.7 million vehicles a year, enough to move past G.M. as the world’s third largest automaker after Volkswagen and Toyota. But the discussions collapsed last week after the French government, a major shareholder in Renault, demanded guarantees that the merged company would not cut jobs or close plants in France. The merger plans were also complicated by Renault’s two-decade alliance with Nissan, which is also a Renault shareholder.
All three Detroit automakers have teamed up with start-ups in their pursuit of autonomous technology. G.M. acquired Cruise Automation in 2016, while Ford is investing at least $1 billion in its partner, Argo A.I. Additionally, Cruise has attracted major outside investors, including Honda and the Japanese tech giant SoftBank. Ford and Volkswagen are negotiating a plan to have the German company pool its autonomous efforts with Argo.
Fiat Chrysler is aligning with Aurora at a time when industry executives are acknowledging that it will probably take longer than previously believed to put autonomous vehicles on the road. Enthusiasm cooled after an Uber test vehicle struck and killed a pedestrian last year.
“Everybody has hit the brakes,” said Mike Ramsey, an analyst at the research firm Gartner. “They’re backing off from the aggressive plans they had been talking about.”
Waymo had once expected to begin operating a driverless taxi service in Chandler, Ariz., and other cities this year. In the past Ford said it aimed to have driverless cars with no steering wheel and no pedals in mass production by 2021.
In Aurora, Fiat Chrysler is joining forces with a company that got a relatively late start in the field. By the time Aurora was formed, Waymo and G.M.’s Cruise had been working on their technology for four years or more. But Aurora was started by three scientists with considerable experience in autonomous vehicles: Chris Urmson, who formerly headed Google’s self-driving car team before it became Waymo; Sterling Anderson, a former chief designer of Tesla’s Autopilot driver-assistance system; and Drew Bagnell, who had worked at Uber on self-driving technology.
Aurora announced in February that it had raised $530 million in funding from investors that included the online giant Amazon; it says the total has grown to $600 million. It has already agreed to supply its technology to Volkswagen and Hyundai. With Fiat Chrysler, Aurora intends to “develop a meaningful business model for delivering the benefits of self-driving commercial vehicles,” Mr. Anderson said in a statement.