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Illustration: Rebecca Zisser/Axios

AV companies are largely developing their cars as a package deal, which requires extraordinary expertise and investment in vehicle technologies, software and cloud-based systems.

Why it matters: This strategy could ultimately take a toll on innovation and competition by limiting the possibility of interchangeable components that could drive down costs and bring AVs to market faster.

The big picture: In the vertically integrated approach, AV companies are developing all of their tech stack either in house or within proprietary partnerships. This means that an AV's components will be tied to just one company's ecosystem, even though it's unlikely any one company will dominate the field across vehicle, software and cloud.

The good:

  • This system results in better integration of hardware, software and cloud-based systems.
  • It also yields greater control over customer experience and software updates, and makes contracting out cybersecurity systems easier.

The bad:

  • The expertise needed to excel at all three components is expensive and time-consuming, even for tech giants like Google and Amazon. This could delay when AVs go to market, and make them more expensive for fleet owners and end users.
  • It could also impede innovation and competition, because AV companies would not have the flexibility to change systems or partners if better tech becomes available.

What's happening: Most AV companies don't have Google's budget and deep bench of multifaceted engineering expertise, and instead are pursuing proprietary partnerships.

As an alternative, AV companies could strategically collaborate with tech suppliers across the industry to make the most promising versions of any tech run in all AVs.

  • This would also be cheaper than building entire teams in house, and would allow for greater flexibility as tech companies compete.
  • Even Ford eventually abandoned Henry Ford's vertically integrated vision in favor of outsourcing technology to the best suppliers.

The bottom line: If AV tech is designed to be interchangeable, the market could be more competitive, and AVs could be available sooner and at a lower cost.

Bibhrajit Halder is the CEO of an early-stage AV startup and has worked on autonomous vehicles at Ford, Caterpillar and Apple. He is also a member of GLG, a platform connecting businesses with industry experts.

Go deeper

Updated 3 hours ago - World

Skripal poisoning suspects linked to Czech blast, as country expels 18 Russians

Combined images released by British police in 2018 of Alexander Petrov (L) and Ruslan Boshirov, who are suspected of carrying out an attack in the in the southern English city of Salisbury using Novichok, a military-grade nerve agent, and also the2014 Czech depot explosion. Photo: Metropolitan Police via Getty Images

Czech police on Saturday connected two Russian men suspected of carrying out a poisoning attack in Salisbury, England, with a deadly ammunition depot explosion southeast of the capital, Prague, per Reuters.

Driving the news: Czech officials announced Saturday they're expelling 18 Russian diplomats they accuse of being involved in the blast in Vrbětice, AP notes. Czech police said later they're searching for two men carrying several passports — including two with the names Alexander Petrov and Ruslan Boshirov.

Indianapolis mass shooting suspect legally bought 2 guns, police say

Marion County Forensic Services vehicles are parked at the site of a mass shooting at a FedEx facility in Indianapolis, Indiana, on Friday. Photo: Jeff Dean/AFP via Getty Images

The suspected gunman in this week's mass shooting at a FedEx facility in Indianapolis legally purchased two "assault rifles" believed to have been used in the attack, police said late Saturday.

Of note: The Indianapolis Metropolitan Police Department's statement that Brandon Scott Hole, 19, bought the rifles last July and September comes a day after the FBI told news outlets that a "shotgun was seized" from the suspect in March 2020 after his mother raised concerns about his mental health.

U.S. and China agree to take joint climate action

US Special Presidential Envoy for Climate John Kerry waves as he arrives at the Elysee Presidential Palace on March 10, 2021 in Paris. Photo: Chesnot/Getty Images

Despite an increasingly tense relationship, the U.S. and China agreed Saturday to work together to tackle global climate change, including by "raising ambition" for emissions cuts during the 2020s — a key goal of the Biden administration.

Why it matters: The joint communique released Saturday evening commits the world's two largest emitters of greenhouse gases to work together to keep the most ambitious temperature target contained in the Paris Climate Agreement viable by potentially taking additional emissions cuts prior to 2030.