By Joseph White and Shariq Khan
(Reuters) - Alphabet (NASDAQ:GOOGL) Inc's Waymo self-driving vehicle unit said on Tuesday it plans to build a plant in Michigan to transform vehicles into autonomous cars for Waymo's ride services business.
Waymo has proposed private investments of $13.6 million to build a facility in southeast Michigan and create more than 100 jobs, potentially up to 400 jobs, the Michigan Economic Development Corp said separately on Tuesday.
The state agency said it will contribute an $8 million grant to fund the project, it added. That would equate to $20,000 in state aid per job if the project hits the 400 employee target.
Waymo said the new facility would be dedicated to mass production of L4 or level 4 autonomous vehicles which can pilot themselves without a human driver under certain conditions.
Waymo said in a blog post it will work with auto supplier Magna International Inc to install its self-driving system in vehicles manufactured by others.
Waymo is already using Fiat Chrysler Automobiles NV minivans and vehicles made by Jaguar Land Rover, a unit of India's Tata Motors. Waymo develops the hardware and software and combines self-driving systems into its fleet.
Waymo Chief Executive Officer John Krafcik has said the company plans to expand its fleet to as many as 20,000 vehicles by 2022, and he has been assembling an array of partnerships to that end, including agreements with car dealer chain AutoNation Inc (NYSE:AN) to provide maintenance and fleet management services.
However, Waymo and other potential players in the nascent robo-taxi and automated delivery market face significant technical and legal hurdles. For instance, the U.S. Congress and federal regulators have not yet established a regulatory framework to govern large-scale deployment of autonomous vehicles on public roads. Waymo alluded to another challenge in its blog post Tuesday, praising Michigan for its "excellent snowy conditions for our cars to test."
Waymo currently employs about 20 people in Novi, Michigan. At its new southeast Michigan facility, for which it is yet to identify a location, the company aims to hire engineers, operations experts, fleet coordinators and other professionals for retrofitting vehicles with its self-driving technology.
The scale of Waymo's Michigan investment is small compared to operations run by the Detroit Three. Still, the Silicon Valley company's decision has symbolic impact in the home state of the legacy U.S. auto industry, which is losing thousands of automotive jobs this year as General Motors Co (NYSE:GM) and Ford Motor (NYSE:F) Co cut staffs.
Both GM and Ford also have said they will build autonomous vehicles at Michigan factories.
In December, Waymo launched self-driving taxis in Arizona for paying customers.
Waymo is considered the leader in developing self-driving technology, due to its decade of testing and millions of miles driven. Volkswagen (DE:VOWG_p) Chief Executive said last November that Waymo had a one- to two-year head start.
GM's Cruise Automation and Uber Technologies (UBER.UL), have yet to launch their paid self-driving services. Cruise has a goal of launching its service this year, but GM and Cruise executives have said that depends on assuring the driving system meets safety criteria.