More auto companies team up on automated driving

Rivals BMW and Daimler are the latest automakers to start pooling resources in order to stay competitive while they push toward full autonomy.

The big picture: Once there was a race among auto and tech companies to develop self-driving cars, but now there's a shared belief that it's frustratingly hard and incredibly expensive to do so at scale.

• For some, partnering on a step-by-step progression through the various levels of autonomy seems the most expedient way to try to bring the technology to market.

What's happening: BMW and Daimler, Mercedes Benz' parent, are teaming up on automated driving, joining a growing list of AV research couples: Toyota and Uber, GM and Honda, and Ford and Volkswagen.

• BMW and Daimler will focus on next-generation technologies for driver-assistance systems, highly automated highway driving and self-parking features — which are all considered Level 3 or 4 autonomy.
• They aim to make those technologies available in the mid-2020s for global markets while separate research continues on longer-term projects.
• For example, Mercedes and Bosch will start testing Level 4 and 5 robotaxis in San Jose, California, this summer.

BMW and Mercedes are usually bitter rivals, but the shifting transportation landscapehas a way of turning enemies into friends.

• The German luxury carmakers are also pooling their resources on mobility services, investing $1 billion in a joint venture that spans ride-hailing, multi-modal transportation and related services.

What we're hearing: Industry experts predict even more collaboration on automated driving technology in the near future.

• The likelihood of a recession or cyclical downturn means big R&D expenditures are riskier, says Sam Abuelsamid, principal analyst at Navigant Research.

• AV development becomes more complex as the level of autonomy increases, Michael Hafner, head of driving technologies and automated driving at Mercedes-Benz Cars, explains in a blog post.
• Shouldering the technological and financial burdens together makes sense, even though BMW and Mercedes will always be competitors, Hafner writes.

What's next: AVs aren't here yet, but already they're becoming a commodity. What will differentiate auto companies in the future won't be whose AV technology is safer — airlines don't compete on safety, after all — but which one delivers a better customer experience.

"Once they’re driving the speed limit in the middle of the lane and keeping you from dying, that’s not a differentiated experience."

Go deeper: Amazon's autonomous vehicles bet could make deliveries even cheaper