Honda, Alphabet's Waymo in talks over self-driving cars

Announcement marks Google's second potential tie-up with an automaker over self-driving technology

Honda Motor Co said on Wednesday it had entered into formal talks with Alphabet Inc's new self-driving division Waymo to add self-driving technology to its vehicles, marking the second potential customer for the automation software.

The move comes just one week after Google spun off its self-driving unit into its own company named "Waymo" with a mandate to strike partnerships with automakers and others and commercialize the research it has been developing for over seven years.

The potential deal illustrates how automakers faced with the high costs of developing the new technology in-house are separating into those betting on developing it alone, such as Ford Motor Co and General Motors Co , and those turning to partnerships with suppliers to spread the costs.

Honda's announcement marks Google's second potential tie-up with an automaker over its self-driving technology. The first came in May, when the technology giant signed a deal with Fiat Chrysler Automobiles NV to incorporate the tech into the carmaker's minivans.

Unlike cash-strapped Fiat Chrysler, however, Honda has already committed its own resources to autonomous driving, and it said on Tuesday those efforts would continue.

While Honda has been less vocal about its plans for self-driving cars than larger rivals like Toyota Motor Corp, the Japanese automaker showed off a self-driving prototype in June it has been testing in Northern California. The carmaker foresees full autonomy on highways by 2020.

"In addition to these on-going (in-house) efforts, this technical collaboration with Waymo could allow Honda R&D to explore a different technological approach to bring fully self-driving technology to market," Honda said in a statement.

Honda said, as part of the collaboration talks, it could provide Waymo with vehicles modified to accommodate Waymo software, such as Fiat Chrysler has done with its Chrysler Pacifica minivans.

Were a deal to be signed, Honda said its engineers in Silicon Valley and Tochigi, Japan would work closely with Waymo engineers.

A Waymo representative said the company was "looking forward to exploring opportunities to collaborate with Honda to advance fully self-driving technology and make our roads safer."