Share the burden
Partial autonomy is already a reality in higher-end cars that keep in lane and adjust their speed in motorway driving.
Each of the next stages - "eyes off," "mind off" and ultimately driverless autonomy - will likely take years to become reality.
Klaus Froehlich, BMW's board member responsible for development, said the company was likely to lose money with its first fully autonomous vehicles, just like it did with its first-generation electric cars.
But developing the technology remains a necessity in order to stay relevant as a carmaker.
"It is an enabling technology, not a business case," he said about BMW's decision to develop autonomous vehicles. "But if the burden can be shared on a platform, I have nothing against that."
One of the most financially promising markets that autonomous technology will open up is driverless on-demand taxis, which may come to replace regular cabs and parts of public transport in large cities.
"Robotaxis" are expected to drive the wider market for car sharing and ride hailing, which was worth $53 billion last year and could be worth $2 trillion by 2030, according to a McKinsey study.
Ford and General Motors are investing at least $2 billion each to develop self-driving vehicles for urban ride-sharing fleets beginning in 2021, competing with incumbents and start-ups.
The emergence of alliances involving the likes of BMW and Mercedes-Benz comes at a time when regulators are pushing for a creation of standards for the new technology, which has the potential to improve vehicle reflexes and cut accidents by up to 90 percent, according to Boston Consulting Group.
Industry experts say such standardization could make it much harder to develop a product which stands out, calling into question the wisdom of high-stakes, go-it-alone strategies.
Alliances, mergers
In September 2016, the US Department of Transport and the National Highway Transportation Safety Administration released guidance for heavily automated vehicles.
The regulator urged carmakers to disclose how vehicle reflexes are programed, particularly when cars are faced with a dilemma, such as choosing between hitting a cyclist or accelerating beyond legal speeds to avoid an accident.
"It is important to consider whether highly automated vehicles are required to apply particular decision rules in instances of conflicts between safety, mobility, and legality objectives," the guidance said. "Algorithms for resolving these conflict situations should be developed transparently using input from federal and state regulators, drivers and passengers."
European regulators too are debating whether to standardize speeds and distances which autonomous cars need to adhere to while weaving in and out of traffic or joining lanes.
Pressure not to waste development costs is laying the groundwork for alliances and even mergers between the various companies supplying technology for autonomous cars, including makers of vehicles, software, computer chips, radar, camera and laser sensors and high-definition maps.
BMW, Mercedes and Audi put aside their rivalry and teamed up to buy mapping firm HERE, for example, in order to cut their dependence on Google.
