The autonomous driving world took a hit on Wednesday with the sudden announcement that Argo AI was shutting down. The high-profile startup had deep pockets thanks to major investments from Ford and then the Volkswagen Group, but both automakers are taking those resources away and applying them to other issues such as advanced driver assistance systems.
Argo was founded in 2016 and went public the following year with news that Ford was investing $1 billion in the startup over five years. At the time, the automaker planned to launch a commercial, self-driving ride-hailing venture in 2021, a date it obviously missed and an ambition it no longer has.
In 2019, VW Group joined the party, adding another $1 billion in cash and $1.6 billion in the form of Audi self-driving spinoffs. The company also agreed to buy Ford’s half stake over three years.
What makes the news shocking is that Argo appeared to be one of the best-positioned self-driving vehicle startups, alongside Alphabet’s Waymo and General Motors-backed Cruise. In 2021, Lyft partnered with Argo after selling its own self-driving research group to Toyota and rolled out self-driving Argo-powered Lyfts in Miami (starting December 2021) and Austin (end September 2022) .
In September 2021, Walmart, another Argo partner, also announced plans to begin using the startup’s self-driving technology for last-mile deliveries in Austin, Texas; Miami; and Washington, DC. Argo also began self-contained deliveries for a food insecurity organization in Pittsburgh in 2022.
But obviously none of these business models made sense, and without additional backers, Ford and VW pulled out.
In its third-quarter report to investors, also released on Wednesday, Ford said it had “made a strategic decision to shift its capital expenditures from L4 advanced driver assistance systems developed by Argo AI to L2+ technology. /L3 developed in-house. Argo AI had previously been unable to attract new investors. As a result, Ford recorded a $2.7 billion pre-tax non-cash writedown on its investment in Argo AI, resulting in a net loss of $827 million for the third quarter.
Instead, the company will continue to develop partially automated systems like BlueCruise, which Ars editor Eric Bangeman recently spent several hours testing.
“[T]Things have changed, and now there is a huge opportunity for Ford to give back time – the most precious commodity in modern life – to millions of customers while they are in their vehicles,” said President and CEO. Ford executive Jim Farley.
“It is essential for Ford to develop high-performance and differentiated L2+ and L3 applications that, at the same time, make transport even safer. We are optimistic about the future of L4 ADAS, but the cost-effective and fully autonomous vehicles at large scale are still a long way off.” , and we won’t necessarily have to create that technology ourselves,” Farley said.
The VW Group hasn’t given up on its own robotaxi ambitions – Moia is still planning to roll out autonomous identification. Buzz in Hamburg, Germany, in 2025. But the company is consolidating its autonomous driving development partnerships.
The VW Group’s software division, CARIAD, will be responsible for developing partially automated driver aids (like BlueCruise) as well as fully autonomous driving technology with Bosch and, eventually, Horizon Robotics in China. Meanwhile, VW Commercial Vehicles will continue to try to make sense of the driverless “mobility as a service” economy.
“Especially in the development of future technologies, focus and speed matter. Our goal is to provide our customers with the most powerful functions as soon as possible and to set up our development in the most cost-effective way possible”, said VW Group CEO Oliver Blume. .
According to TechCrunch, Argo employees were told at a town hall on Wednesday that some of them would be offered jobs at Ford or VW in addition to receiving “generous” severance pay. Argo personnel who have not received employment with either automaker will receive an additional bonus, as well as health insurance.
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