No return on investment foreseen from Argo AI, so Ford will focus on Level 2+ and Level 3 autonomy.
Ford- Ford will now concentrate on Level 2+ and Level 3 automated driver-assistance systems it has been developing in-house under the BlueCruise brand name.
- Ford CEO Jim Farley said “almost $100 billion has been invested in L4” industry-wide, and no one has identified how it will add value to consumers at a price premium.
- On the EV front, Farley also reiterated Ford’s plan to deliver 2 million EVs by 2026.
Ford Motor Company has shut down Argo AI because the automaker sees no value to the consumer—and therefore no potential revenue stream—from Level 4 autonomy the tech company was developing. Instead, Ford will concentrate on Level 2+ and Level 3 automated driver-assistance systems it has been developing in-house under the BlueCruise brand name.
“We still believe in L4 technology, that it will have important impact in moving people,” Ford CEO Jim Farley told Wall Street analysts in the automaker’s third-quarter earnings call an hour after the markets closed and Argo AI’s demise was announced. But “almost $100 billion has been invested in L4” industry-wide, and no one has identified how it will add value to consumers at a price premium.
Ford and Volkswagen Group invested $1 billion in the Argo AI startup in 2017 to develop Level 4 driverless vehicle technology. Farley said the Ford group that will continue to develop L2+ and L3 will include some techies hired from Argo AI. Likewise, Volkswagen said on Wednesday it no longer is investing in Argo AI, saying it will concentrate its automated driving efforts on existing partnerships with Bosch and Horizon Robotics in China, Reutersreports.
On the EV front, Ford said it will refresh its global electric vehicle lineup in 2023-24 to their second architectures, including platforms that will allow for regularly updatable software. These next-generation EVs, Farley said, could be updated eventually from BlueCruise L2+ and L3 to L4-L5 autonomy.
Farley said “there is no change to our target” of delivering 600,000 EVs by the end of next year, a pointed jab at CEO Mary Barra’s announcement in General Motors’ Q3 earnings call Tuesday that her company was pushing back on its promise to deliver 400,000 EVs to the first half of 2024, instead of by year-end 2023.
One big difference between the Ford and GM targets, however, is that GM’s number refers to EV deliveries in North America alone. Barra blamed GM’s delay on the pandemic’s supply-chain bottlenecks.
Farley also reiterated Ford’s plan to deliver 2 million EVs by 2026. Both Ford and Hyundai Group are claiming the No.2 sales position for EVs in the US (behind Tesla). While Hyundai Group includes EVs from Hyundai and Kia brands and the recently launched Genesis G80 EVs, Ford has the Mustang Mach-E, F-150 Lightning, and E-Transit on-sale here.
Farley and Executive Chairman Bill Ford Jr. at last month’s Mustang reveal in Detroit.
Jeff Kowalsky
Like GM’s Barra, Farley is enthusiastic about the potential for the Inflation Reduction Act to grow the electric vehicle market.
“We expect the IRA to have a wide array of impacts for customers and Ford,” Farley said, including a $45 per kilowatt-hour tax credit that would go to the manufacturers. Ford has been finding much of its strength as an automaker in commercial vehicles, and Farley noted the IRA includes a $10,000 per “service unit” tax credit on eligible trucks and vans, the first clean-vehicle tax credit to go to businesses. Company leadership is now grappling with the question of “how many Lightning Pros do we make, and how many Lightning retail (units) do we make,” Farley said.
Ford reported $1.8 billion in earnings before income taxes off gross revenue of $39.4 billion. While revenues were up $3.7 billion compared with Q3 of 2021, the EBIT was $1.2 billion lower, year-over-year. Chief Financial Officer John Lawler attributed the lower net profit on “about $1 billion in supplier settlements.”
Keyword: Level 4 Autonomy is Dead to Ford—For Now