Toyota to Spend $1 Billion on Self-Driving Cars

The world’s largest automaker is finally getting serious about autonomous vehicles. Forbes reported that Toyota Motors (NYSE: TM) will spend $1 billion to create the Toyota Research Institute near Stanford University in the heart of Silicon Valley.

The institute will research artificial intelligence and robotics, and it will have some major brain power behind it. The head of the institute will be Dr. Gill Pratt, an artificial intelligence expert that previously worked at the Defense Advanced Research Projects Agency (DARPA), which is the Pentagon’s weird science think tank, the people who brought us a little thing called the internet.

Pratt joined Toyota earlier this year, but he did not say what the company plans to do until a press conference on Friday, Nov. 6, 2015 with Toyota’s CEO Akio Toyoda. There, Pratt outlined three goals for the institute:


Akio Toyoda introduces Dr. Gill Pratt to the press.

  1. Improve car safety by decreasing the risk of accidents.


  1. Make driving more accessible to everybody regardless of ability. In other words, make cars easier to drive. I imagine this includes making vehicles that the disabled, the elderly, and others can drive. One reason for this is to increase Toyota’s potential market share, as the population ages and lots of people can no longer drive.


  1. Use Toyota technology to increase outdoor mobility for seniors and others. I imagine that means Toyota is planning to develop high-tech wheelchairs or other vehicles for seniors and the disabled.


At home in Japan, Toyota is also developing support for robots for the elderly. For example, machines to perform tasks like housework.

America is now the Center of Robotics Research

This could be a real game changer in the world of self-driving cars, because as far as I know, nobody has invested this kind of money in the field before. Simply spending that cash will make Toyota a leader and enable it to take a lot of talent away from competitors, including Alphabet (the company formerly known as Google), Ford, Daimler (Mercedes’ parent), Uber, Tesla, and Volkswagen.

Toyota's next generation wheelchairs.

Toyota’s next generation wheelchairs.

This also signals that the center of robotics and AI research has moved from Japan to the United States. Toyota is spending the cash here in the U.S. because America is the leader in robotics. The United States still has the edge in technology and it is growing.

Another reason why Toyota is in Silicon Valley is that America is still the world’s most important market for cars. What happens here will influence the rest of the world.

Toyota is now a Technology Company

It is now obvious that Silicon Valley is now the center of the world of self-driving cars. It is also obvious that traditional automakers and not tech companies like Apple (NASDAQ: AAPL) will dominate this field.

Something else to remember here is that Toyota itself is a technology company. It developed hybrid technology, and more recently, all but perfected fuel cell vehicles. Toyota has one of the best track records developing and rolling out new technology. It has started selling its fuel cell-powered Mirai in the United States.

This means that Toyota could dominate the world of self-driving vehicles, much as it has dominated the auto industry. It looks like Toyota’s position as the world’s largest auto company is safe for the foreseeable future.