May 8, 2020 - Economy & Business

Coronavirus could speed consolidation of self-driving technology companies

Illustration: Rebecca Zisser/Axios

The global pandemic may be reinforcing the logic for self-driving cars, but the economic fallout is likely to accelerate the consolidation trend that was already underway.

What it matters: Self-driving technology is a difficult — and expensive — challenge, and many companies have decided they are better off pooling resources. Only a handful of well-capitalized players will likely make it across the finish line.

What's happening: Aptiv closed its $4 billion joint venture deal with Hyundai on March 26, in the midst of the crisis.

  • The new company, yet to be named, will be based in Boston, and led by Aptiv's Karl Iagnemma.

What's they're saying: "A couple of years ago, people thought this was a software activity," Iagnemma told Axios. "What the industry has come to realize is that having a deep strategic relationship with an automotive (company) is essential."

  • It's capital-intensive, too: $1 billion is the price of entry for credible AV players, says Iagnemma.

Yes, but: Well-funded independent players can succeed without worrying about being dependent on a single automaker's fortunes, says Sterling Anderson, co-founder of Aurora Innovation, whose A-list backers include Sequoia Capital, Amazon and T. Rowe Price.

  • "These are make or break moments," said Anderson, whose company is focused on automation for commercial vehicles.

What's next: Volkswagen and Argo AI are nearing completion of a $2.6 billion investment deal that will make Ford and VW equal minority shareholders in the automated driving tech company.

What to watch: Fiat Chrysler says it is still committed to a planned merger with PSA Groupe, but both sides are scrambling to preserve cash in light of the crisis, and there's talk that the companies could try to renegotiate terms of the deal.

Go deeper: Automakers lay out back-to-work playbook for coronavirus pandemic

Go deeper

The Athletic lays off 8% of staff, implements company-wide pay cut

Adam Hansmann (left) and Alex Mather (right), co-founders of The Athletic. Photo: Steph Gray, courtesy of The Athletic

The Athletic is laying off nearly 8% of staff, 46 people, according to an internal memo obtained by Axios.

Why it matters: It's the latest media company that's been been forced to take drastic measures to survive the economic fallout from the coronavirus. Like many sports media outlets, The Athletic has been particularly impacted by the loss of live sports.

Unpacking a surprise jobs report

Illustration: Rebecca Zisser/Axios

Can we trust this morning's surprisingly good employment report?

  • The short answer: Yes.

The emergency era of environmental policy

Illustration: Aïda Amer/Axios

Welcome to the crisis era of energy and environmental policymaking.

Driving the news: A new White House executive order, citing COVID-19, invokes emergency powers to accelerate and even waive some environmental reviews of infrastructure and energy projects.