Google Inc. (GOOG) has for long been building a technology for self-driven cars and its lobbying to get the cars approved made some headway. Californian Governor Jerry Brown has now signed a bill at the Google headquarters for driverless cars in California.
The bill was signed to conduct safety and performance regulations to test the autonomous vehicles. To date Google has tested a dozen of these vehicles that are controlled by computers and the cars have apparently been driven 300,000 miles without any accident.
The cars have been fitted with radar, GPS and computer vision techniques that auto-sense the surroundings. Therefore, the advanced control system can navigate the car on its own once the destination has been chosen.
Google claims that these cars can improve road safety, and reduce traffic congestion and accidents. A study conducted by the Association for Safe International Road Travel (ASIRT) notes that roughly 1.3 million people die in road crashes each year, while 20-50 million people are injured or are handicapped worldwide.
Therefore, potentially, the old, blind, drunk and disabled can now move independently. Further, it can eliminate the mental exertion of those who drive by themselves. The car can very easily find a spot to park, reducing many of the difficulties that people face every single day.
Big automotive manufacturing stalwarts such as General Motors (GM - Analyst Report), Ford, Mercedes-Benz, Volkswagen, Audi, BMW, Volvo and Cadillac have all been trying to come up with such cars. Google is not keen on making such cars but is interested to develop partnership with the manufacturers. It will be a positive for the automotive manufacturers to get the tested technology from Google.
Regulatory hurdles remain however, since most states in the U.S. currently consider them illegal. The benefits of the technology as it exists today are of course not lost on legislators. This is probably the reason that the Nevada State passed them in 2011. Some other States such as Florida, Hawaii, Oklahoma and California are moving along the same path.
Auto sales are expected to slow down due to continued weakness from the debt crisis in Europe and the possibility of U.S. federal budget cuts. Given its potential and novelty, the new concept cars can boost automobile sales going forward.
In the second quarter, Google’s gross revenue touched a record $12.21 billion. Revenues from both Google-owned and partner sites continued to grow double digits on a year-over-year basis.
Google retains a Zacks #3 Rank, which translates into a short-term Hold rating.