Last week, General Motors (GM) announced it would shut down its Cruise division, representing a sharp turn for the self-driving car industry.
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The end of GM's self-driving, ride-sharing technology venture leaves a gap in the autonomous driving (AV) market. While Tesla has doubled down on its full self-driving (FSD) technology in recent years, few other leading U.S. automakers have ventured into the complicated field.
GM cited the high cost and difficulty of scaling a robotaxi business as the primary reasons for its decision to stop funding Cruise. This might hint at why many other U.S. companies have opted against building their own self-driving cars.
But one Cruise competitor has been working hard to conquer the robotaxi market, not just in the U.S. but well beyond. Now it may have an opportunity to expand its reach across the ocean to a new city.
Far from the United States, a booming AV market is unfolding
While self-driving cars have been slowly rolling out into U.S. cities, a rival economy has been working hard to usher in the new phase of driving. Multiple Chinese automakers are making progress testing their own self-driving vehicles, often on public roads, taking full advantage of their government’s pro-AV policies.
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Now, one of China’s neighbors is gearing up to welcome new autonomous vehicles. Waymo is planning to start testing its self-driving cars in Tokyo, Japan, in early 2025.
Cruise had previously planned to start doing the same in 2026. Waymo, a Google (GOOGL) subsidiary that experts have praised for its self-driving progress, will no longer have to elbow Cruise for market share. Tokyo does not appear to have any self-driving vehicles on its roads currently.
This is an important milestone for Waymo, as it will mark the first time its robotaxis will operate on public roads in any nation other than the U.S. In a statement published on the company’s blog, Waymo provided further context on its planned Japanese expansion, stating:
“This expansion into Japan aligns with the country's vision for the future of transportation. Over the years, the Japanese National and Tokyo Metropolitan governments have been proactively working to address the evolving transportation needs of society and foster the adoption of innovative technologies that can enhance safety and mobility.”
Waymo also notes that it is working with Japanese regulators, policymakers and safety officials to “ensure a responsible and seamless implementation of Waymo's technology” as it begins testing in Tokyo.
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While Waymo doesn’t specify a date, it notes that its all-electric Jaguar I-PACEs will be arriving in Tokyo in early 2025 through a partnership with Nihon Kotsu, the city’s biggest taxi company.
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This is similar to an agreement that Uber (UBER) recently announced with Chinese AV producer WeRide, which will allow it to offer rides in autonomous vehicles to customers in Abu Dhabi.
Waymo is beating rivals in their own market
While Waymo seems on track to start rolling out autonomous vehicles onto Tokyo’s streets in the coming year, its progress raises a key question: How can a U.S. company beat local Japanese automakers to their own AV market?
There may be multiple reasons why Waymo is able to advance at a faster speed than companies like Honda (HMC) , which dominate Japan’s auto market. The first may be that Honda initially chose to partner with Cruise in 2021 to test its AV program, a decision that is likely haunting it now.
Waymo, by contrast, has partnered with companies that may give it an edge in Asia’s self-driving car markets in the not-too-distant future. In October 2024, it announced a multi-year strategic partnership with Hyundai (HYMTF) that will put its AV system into the all-electric Hyundai IONIQ 5 SUV.
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Another reason may be that Waymo’s technology has given it a boost over competitors, allowing it to move more quickly and expand beyond the U.S. Stella Nolan, editor of EV Magazine, recently conducted a detailed review of Waymo, highlighting the safety features that set it apart from other AV systems.
“Waymo's AI doesn't just observe; it plans," she states. “It processes the information from its environment and decides the safest course of action—calculating the optimal speed, lane position and steering manoeuvres necessary to ensure a smooth, secure ride.”
One potential obstacle may lie in putting Waymo’s large Jaguar I-PACEs on Tokyo roads, which some experts think could lead to complications.
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