Not long ago, automakers were scrambling to hire top mechanical engineers and battery scientists. Now they're racing to lock up a limited number of software geniuses to write code for driverless car projects.
In a relatively short time, the global industry has collectively agreed that the future of mobility may be dominated by "robo-driven" cars, owned privately or commercially. Companies that can't capture talent to keep up are at existential risk.
Winners and losers in the battle may already be emerging. Boston-based Lux Research carried out a study titled "Determining Who's in the Fastlane for Autonomous Vehicles." Lux gave five of 12 top global automakers positive ratings based on their strategies, partnerships, investments, and other determinants.
The top-rated automakers for autonomous in the Lux study are Daimler (DDAIF) , Honda (HMC) - Get Report , Hyundai (HYMLF) , Toyota (TM) - Get Report and Volvo, the privately-held Sino-Swedish venture.
"At the end of the day, the company with the best business plan will win the race toward autonomy," said Kevin See, Lux's research director. "Few companies will have a significant technology advantage, so winners will need to capitalize on novel business models from car sharing and ride sharing to monetizing their own data,"
BMW, the German luxury carmaker, scored a "wait and see" grade on the Lux study. BMW is focused on "perfection," the study said, and is unlikely to introduce features that could fail and thus taint its brand. Hence, BMW's caution could be an impediment to innovation.
Yet the German carmaker, which emerged from obscurity in the U.S. to become a top premium name by the 1990s, said it is "accelerating" autonomous initiatives to keep pace with companies like Alphabet's (GOOGL) - Get Report Google unit and Apple (AAPL) - Get Report . Several Silicon Valley companies are developing artificial intelligence that will allow a car to drive as well or better than humans.
"There's a power play going on with other companies buying up software competencies at a fast clip," Klaus Froehlich, BMW AG's head of development, told Bloomberg in an interview. "We definitely need partners in this area, and we massively need to build out in-house resources too."
BMW probably needs a mentality adjustment as well, since it's slogan -- "The Ultimate Driving Machine" -- will have far less relevance in a world filled with robotic drivers.
The automaker that first offers cheap driverless ride sharing "will dominate this market," said Froehlich. "It's a business proposition worth billions in profits that will cost billions to develop."
Ride-sharing ventures like Uber and Lyft have built software platforms, enabled through mobile devices, that could render the traditional automaking business model obsolete, top executives acknowledged.
Some automakers, like General Motors (GM) - Get Report and Volkswagen (VLKAY) , have signed partnerships with sharing enterprises that could give them access -- or at least help them understand -- software platforms that facilitate sharing. Other automakers, such as Ford (F) - Get Report , haven't precluded partnerships but are mainly developing capabilities internally, which requirer aggressive hiring.
What's most interesting about the various projections and forecasts is that no one doubts that driverless technology is approaching at rapid speed.
Doron Levin is the host of "In the Driver Seat," broadcast on SiriusXM Insight 121, Saturday at noon, encore Sunday at 9 a.m.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.