The commitment announced today marks another step in Waymo's evolution from a secret project started in Google nine years ago to a spin-off that's gearing up for an audacious attempt to reshape the transportation business.
The Jaguar deal will expand upon a fleet of self-driving cars that Waymo has been gradually building in partnership with Fiat Chrysler since 2015. Waymo initially equipped about 600 Pacifica minivans with its self-driving technology before negotiating to buy "thousands" more of the vehicles.
The minivans will be part of a ride-hailing service that Waymo plans to launch in Phoenix later this year. If all goes well, Waymo expects to expand the service to other states.
Jaguar will deliver its vehicles for Waymo's ride-hailing from 2020 to 2022. The 20,000 "I-Pace" models will provide up to 1 million rides per day, according to Waymo.
Financial terms of Jaguar's deal with Waymo weren't disclosed. Jaguar lists the starting price for its I-Pace model at about USD 70,000, a figure that translates into USD 1.4 billion for 20,000 vehicles.
The alliance with Jaguar will give Waymo a way to appeal to passengers who want to ride in a more luxurious car or want to avoid the pollution caused by vehicles fueled by gasoline.
Waymo's planned ride-hailing service poses a potential threat to Uber and Lyft, the early leaders in that still-developing field. Both Uber and Lyft are trying to ward off Waymo by developing their own self-driving cars, even though they got a late start in autonomous technology.
Uber's efforts suffered a major setback when one of its autonomous cars struck and killed a pedestrian in Tempe, Arizona last week. On Monday, Arizona Gov. Doug Ducey suspended Uber's self-driving vehicle testing privileges, stating in a letter to CEO Dara Khosrowshahi that video footage of the crash raised concerns about the San Francisco-based company's ability to safely test its technology in Arizona.
Without mentioning Uber, Waymo CEO John Krafcik emphasized the company's track record for safety while its cars have traveled more than 5 million miles on public roads as its engineers have continued to fine tune the robotic technology.