Ford and the Argo-not. Automaker Drops Autonomous Vehicle Startup
Argo AI burns through $3.6 billion of funding and finding no additional investors, will shut down.
Ford signaled that it has lost interest in fully autonomous vehicles when it announced last week that it was pulling out of Argo AI, its joint venture with Volkswagen, forcing the Pittsburgh-based startup to close its doors. Argo had employed as many as 2,000 people. Ford has said that it will offer jobs to some Argo engineers but did not say how many.
The news may be sobering for the remaining champions of the loudly hyped self-driving car phenomenon as a heavyweight champion falls hard. Argo was formed during the buzz that occurred around self-driving cars in 2017 by tech wizards. Argo’s president, Peter Rander, came out of Uber’s self-driving car project and its CEO was Bryan Salesky, a veteran of the Defense Advanced Research Projects Agency (DARPA) challenges. The company immediately attracted a $1 billion investment from Ford. Volkswagen came in later. The two carmakers have invested a total of $3.6 billion in Argo.
The news of Argo’s closing came the same day as Ford’s Q3 FY22 earnings report, which revealed a shift in focus from the development of fully autonomous vehicles to investment in driver-assisted technology. What else was the automaker to do after realizing an $827 million loss in the Argo AI venture and with no other investors ready to jump in and help out?
No word from tech-first companies that are still in the race to deliver the promise of a self-driving car. They may be celebrating a competitor peeling off. In the lead is Elon Musk, who has been known to say Tesla has already delivered with its “Full Self Driving Capability.” Musk’s claim is challenged by government agencies (including the National Highway Traffic Safety Administration, NHTSA) and industry watchdogs, who point to accidents and deaths involving Teslas and assert that the claim of a “full self-driving” vehicle is dangerously misleading.
Less confident in their vehicle’s ability to safely offer hands-off driving are other big car companies, notably GM and Mercedes and automotive technology provider Siemens, which unite to state that while aiding the driver (Level 3 and 4 autonomy) is an attainable reality, replacing the driver (Level 5) is simply a dream.
Tech-first companies, as opposed to companies with an automotive lineage, like Google’s Waymo and Apple, may stay on course. These companies, wealthier than nations, care little about spending for moon shots with the expectation of an eventual windfall. After all, wasn’t it a tech-first company led by the great Elon Musk that taught the automotive industry how to build an automobile?
It is no wonder that Big Auto is putting the brakes on autonomous vehicles. The certification, public acceptance and profitability of fully autonomous vehicles are just too far down the road. Certification would require billions of miles of road tests—something that can’t possibly occur in the lifetime of any automotive industry CEO. A begrudging public acceptance is quickly withdrawn after each accident involving an autonomous vehicle. And the cost of the required sensor platform and computer hardware would double the cost of a Ford Focus.
We can’t fault tech companies for trying to solve what seems an impossible problem to the rest of us. If a human being can drive a car, a computer can drive a car better, say the tech companies. In fact, the technology _already_makes autonomous vehicles safer than conventional vehicles.
Good point—autonomous vehicles may have a record of fewer deaths per mile than human-driven vehicles. And it may be unfair to have zero tolerance for the accidents of autonomous vehicles and tolerate hundreds of thousands of deaths per year resulting from human-driven vehicles.
In the end, automotive companies like Ford, without the deep pockets of big tech, can’t be blamed for their impatience. Unlike tech companies, automakers are more traditional, more conservative, more sensitive to model years—and more subject to the needs of cost-conscious consumers.