Stuttgart-based Bosch, the world’s largest car-component maker, is putting the pedal to the metal, announcing a five-year investment program worth €4 billion ($4.6 billion) to boost the development of self-driving cars and quadruple the number of artificial intelligence experts to 4,000 by 2021.
“Driverless driving will be a game changer for individual mobility. It will open the door to disruptive business models such as robotaxis and shuttle-based mobility,” Bosch CEO Volkmar Denner said in a statement. “We want to belong to, and can be, among the top,” he said, hinting at US and Chinese rivals.
Waymo, a subsidiary of Google owner Alphabet, is considered a leader in self-driving car technology and has already tested driverless vehicles on hundreds of thousands of miles. Tesla, with its Autopilot feature, taxi service Uber and the Chinese rival Didi are also far advanced in testing autonomous vehicles. Thanks to their focus on software, they have so far outpaced German carmakers and their suppliers.
But Bosch, owned by a foundation and controlled by a trust, is no late-comer. After Robert Bosch founded a mechanics and electrical engineering workshop in 1886, he started offering ignition devices for car engines and developed into a leading component maker in the early 1900s. It currently supplies Tesla with parking sensors as well as a radar system for the Autopilot feature, and Apple with motion sensor chips.
CEO Denner knows these achievements are not enough to safeguard Bosch’s future, and therefore wants to accelerate self-driving car development, where artificial intelligence is deemed crucial. AI helps a driverless car to process gigabytes of video, laser and radar data to safely steer through traffic and recognize unexpected movements of cars and cyclists.
“American and Chinese companies dominate consumer-industry AI, but without domain expertise in traffic, manufacturing, or buildings, their potential will lag behind that of industrial AI,” Denner said. “As an innovation leader, we want to master AI ourselves and join the global elite.” He mentioned an algorithm, labeled SoundSee, as an example of where Bosch has innovated thanks to AI. The software can predict machine breakdowns by observing changes in noise, reducing maintenance costs. The application will be used in the International Space Station this summer.
Bosch, which also makes washing machines, fire alarms and heating systems, has alread cooperated with Mercedes-maker Daimler since 2017 in developing driverless cars. But it is also in talks with German car producers and suppliers to pool resources and jointly develop autonomous car technologies, according to an industry source. Such a partnership could include all the big names of Germany’s car industry, such as VW, Daimler, BMW as well as Bosch rivals ZF and Continental. Without confirming or denying the discussions, Bosch CEO Denner said: “We are open to cooperation and are in talks.”
In addition to driverless cars, Bosch is also expanding its offering of electric-car products, such as electric motors and powertrains, almost doubling annual investment to €700 million from €400 million currently. The company can fund all the investments thanks to an operating profit of €5.3 billion on global sales of €77.9 billion last year. Revenue in its mobility business, which also includes electric bike parts and chips used in airbags, was €47 billion, up 2 percent from 2017. Denner wants to use this clout to remain a leader in the car industry and prevent Waymo and others from overtaking it in the long run.
Martin-Werner Buchenau is based in Stuttgart, where Mercedes-maker Daimler and car-parts supplier Bosch have their headquarters. To contact the author: [email protected]