Google is a pioneer in autonomous vehicles, but Continental is headed the same direction, for example through a partnership announced earlier this year with BMW. Although consumers probably know the company best for making tires, it also is a major supplier that makes everything from disk brakes to lithium-ion batteries.
Acquisitions have broadened Continental's business. In 2006, it acquired Motorola's automotive electronics business, for example. In 2012, it reported net income of $2.5 billion on revenue of $43.7 billion.
Partnerships with Google and IBM could be announced at the Frankfurt auto show in September, the newspaper said. The partnerships would involve shared investments up front and then shared revenue from the business later.
Because Continental has existing relationships with automakers as well as extensive experience in the industry, a partnership could help make Google technology more palatable to companies that might be leery of relying more directly on Google.
CNET contacted Google, Continental, and IBM for comment and will update this story with any response.
Continental also has won permission to test autonomous vehicles in Nevada and already has a partnership with Cisco for connecting cars with networks. IBM is another logical partner: it's working on back-end technology that can help cities build intelligence into transportation networks.
It's not the only supplier showing interest in the market.on a BMW in Silicon Valley earlier this year.