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Alphabet will operate a fleet of 20,000 Jaguar cars for its driverless ride-hail service by 2022

This will be the first part of a long-term partnership between the two companies.

The new Jaguar vehicle that will be available through a Waymo ride-hail service.
The new Jaguar vehicle that will be available through a Waymo ride-hail service.
Waymo

Alphabet’s self-driving arm Waymo is introducing a new vehicle into its fleet of driverless rides, an all-electric car produced by Jaguar Land Rover.

Waymo unveiled the new vehicle, called the Jaguar I-Pace, at a press event in New York City on Tuesday and said it expected to begin production on the cars equipped with its technology in 2020. In the first two years, the companies expect to manufacture 20,000 cars.

The vehicles will first be available in a ride-hail service in Phoenix, Ariz., where the company will begin testing prototypes this year. Waymo currently has a fleet of driverless Chrysler Pacifica vans as part of its ongoing agreement with Fiat Chrysler.

This is the first part of what Waymo CEO John Krafcik called a “longterm partnership” with Jaguar. For now, Waymo will own and operate those vehicles that are designed and produced to be able to incorporate the company’s technology. Eventually, Waymo could license the technology to Jaguar Land Rover as well.

Jaguar I-Pace
Jaguar I-Pace
Waymo

That means this partnership can ultimately fulfill at least two of four of the business models Waymo has laid out for itself. First, there’s the ride-hail service; second is licensing its technology to automakers. The company is also exploring trucking and logistics — it recently unveiled its new truck — and working with cities to provide first- and last-mile solutions that connect consumers to public transit.

This particular vehicle is well suited for city driving, Krafcik said at the event today, because it’s compact and has a battery with a 240-mile range. That’s a bit of a departure from its fleet of Chrysler vans currently being tested by consumers in an early-rider program in Arizona.

It’s a sign of Waymo’s ambition to be everywhere — both the suburbs and dense urban areas. That’s why the company is currently testing its technology in a few high-density urban areas including Austin and San Francisco.

Competitors like General Motors have historically focused primarily on cities because of the technological benefits of teaching a system how to drive itself in a complex environment as well as the revenue opportunity in those areas.

“It also happens to be the case we can have the biggest impact, by impacting the biggest number of people, in the most complex environments,” GM president Dan Ammann told analysts late last year. “That’s where the people are, and it’s also where the business opportunity is.”

In fact, ride-hail may still be a bigger opportunity than licensing the technology. The industry expects personal car ownership to decrease with the proliferation of self-driving cars. So while Waymo and Jaguar may consider a licensing deal down the road, it’s unlikely that consumer sales of fully driverless vehicles will be a big part of Jaguar’s business.

With the introduction of the luxury electric I-Pace SUV as well as its self-driving trucks, Waymo’s product offerings are beginning to mirror that of Tesla. Tesla, too, recently unveiled its own electric semi truck and has its own luxury electric SUV, the Model X. But Waymo has little ambition to take on the role of automaker, either building or selling cars direct to consumers.

This article originally appeared on Recode.net.