Alexis Christoforous and Dan Howley of Yahoo Finance discuss Microsoft’s latest deal to enter the autonomous car market.
Video transcription
ALEXIS CHRISTOFOROUS: I want to change the subject here now and check with Dan Howley, our technology editor, for a story that was released this morning. Dan, more about EV, everywhere, General Motors electric vehicle operation. Now Cruise is getting a lot of support from some big name companies, including Microsoft. Fill us in.
DAN HOWLEY: Yes, Microsoft is joining Cruise. This is the autonomous segment of GM. You can see it here. This is one of the vehicles that they are pushing forward. They also have another vehicle designed to move people, instead of being a personal vehicle. But Microsoft invested $ 2 billion in Cruise, along with GM and Honda, to make them the cloud provider for this service.
And really, this is important because what everyone is talking about is how self-driving cars and vehicles along these lines will need cloud infrastructure and a good deal of it to really work properly. They will have to communicate with each other, with their vehicles and also with the infrastructure at some point. So the idea here is that if they are going to see or see a complete network of autonomous cars across the country and in the world, they are going to need to be able to communicate, and using the cloud is the way to do that.
Now, Microsoft is obviously one of the largest cloud providers on Earth with Azure. They are after Amazon and AWS, nobody else in front of them. So it is interesting to see Microsoft entering this space. Obviously, it will continue to heat up in this area, but having this type of investment is really a big deal for Microsoft alone. Because it shows that they are trying to get into spaces along these lines and say, look, we are not just focused on sitting on the sidelines. We want to invest in that too.
ALEXIS CHRISTOFOROUS: We are also seeing a lot of movement between EV actions. I know I mentioned EV. This has to do with autonomous cars, the Cruise component inside GM. But what about the EV space under a Biden administration? We are seeing stocks taking off, Tesla, again, continuing to wear out. What are you hearing from analysts when talking to them about your expectations for the EV space in the coming months?
DAN HOWLEY: Yes, a lot has been said about how well the EV space would do under Biden, specifically because of any kind of federal credit that could go to them or any kind of incentive that could go to them, especially as there is this impulse to get away from it. vehicles powered by internal combustion engines.
Whether it is personal cars or even trucks, buses, anything like that, this is really the direction that we will see governments around the world, including in Europe, saying that they will totally end internal combustion engines in the coming decades. So – or at least for the next two years.
So, this is something that I think we will hear a lot more from the Biden government. But don’t forget, there will be a lot of resistance. Obviously, we have many interests in the oil sector in the country, and they will certainly want to be heard about what will happen with the future of internal combustion engines and the type of emissions that will result.
ALEXIS CHRISTOFOROUS: Yes, we find today that a federal appeals court has vacated or rejected Trump’s rules on emissions from power plants. And we are seeing some of the actions related to this rise. In addition, Rivian seems to be doing well here and could also attract a lot of interest from investors, raising $ 2.65 billion before his first vehicle launch. What do you think?
DAN HOWLEY: Yes, you know, Rivian was interesting because they were in talks with Ford to help co-develop a platform there. It is really a strange way for these big automakers to work with these outside companies to try to allow them to build the vehicles they are going to offer and then kind of implement that kind of technology in their own vehicles.
So we saw it to some extent with GM and Nikola, where it obviously exploded, not necessarily in the right way for GM or Nikola. The idea was that GM would provide Nikola with more manufacturing capabilities, as well as some of the hydrogen technologies they use, the hydrogen fuel cell technologies, which was really what Nikola should be doing on its own. That obviously kind of affected them a little bit. But this rivian investment, obviously, is going to be much more impressive, at least from what we saw.
So far, the EV leader globally is still Tesla. And anyone who’s trying to take on Tesla, whether it’s Ford with Mach-E now, we know we have GMC with a fully electric Hummer. I doubt that this will really take off as much as they might want. But it is a small rebranding for this product. They will all have to go through Tesla. And I think this is really something that they need to take into account.
There are other EVs available now in different showrooms. People are simply not interested in buying them. It seems that Tesla is the only one that people look at and say, yes, this is the kind of vehicle of the future that I want. They don’t necessarily want one, you know – an EV style of an existing car type. So Mach-E, I think, will really be the test to know what consumers’ appetites for electric vehicles are and the different styles they have. It was supposed to be a Mustang. It is not. But we will see if the kind of reinvention of a legacy brand like this can work well in the EV space and if people are really interested in buying them.