Ford shuts down Volkswagen-backed Argo AI

The self-driving car startup Argo AI, which appeared in 2017 with a $1 billion investment, is closing its doors. The parts are being absorbed by the two main backers, Ford and Volkswagen, according to sources familiar with the matter. At a plenary session on Wednesday, Argo AI employees were told that some people would receive offers from the two automakers, according to several sources who requested anonymity. It was unclear how many people would be hired by Ford or Volkswagen, and which companies would get Argo’s technology. Employees were told they would receive a severance package that included insurance and two separate bonuses. Includes annual bonuses and trading bonuses on successful deals with Ford and VW. All Argo employees will receive this. People not employed by Ford or VW will receive additional layoffs and severance pay, including health insurance. A few people told TechCrunch that this is a generous package and that the company’s founders spoke directly with more than 2,000 employees. “Working with our shareholders, we have decided that Argo AI will not continue its mission as a company. “Many of our employees will have the opportunity to continue working on autonomous driving technology with Ford and Volkswagen,” Argo said in a statement. Ford said in its third-quarter earnings report released on Wednesday that it had made a strategic decision to dedicate its resources to developing advanced driver assistance systems rather than autonomous vehicle technology that could be applied to robo-taxis. The company said it recorded a non-cash, pre-tax impairment of $2.7 billion on its Argo AI investment, resulting in a net loss of $827 million in the third quarter. The decision appears to have been triggered by Argo’s inability to attract new investors. Ford CEO Jim Farley acknowledged that the company expects to bring autonomous vehicle technology to market widely by 2021. While millions of customers are in their vehicles, “Ford is mission-critical to develop great, differentiated L2+ and L3 applications that simultaneously make transportation safer.” Farley also hinted that Ford will be able to purchase AV technology through the line rather than developing it in-house. “We are optimistic about the future of L4 ADAS, but a profitable, large-scale fully autonomous vehicle is still a long way off and we don’t have to build the technology ourselves,” he added. Ford also said, “Development and customer enthusiasm for the benefits of L2+ and L3 ADAS justifies fueling the company’s short-term aspirations and commitment to the field.” Argo’s other major backer, VW, has also announced plans to transfer resources and will no longer invest in Argo AI. The company says it will use its software unit Cariad to drive the development of highly automated autonomous driving with Bosch, and in the future with Horizon Robotics in China. Lyft was a lower player, but also took a 2.5% stake in Argo. Lyft announced earlier this year that it plans to launch at least 1,000 autonomous vehicles over its ride-hailing network in several cities over the next five years, starting with Miami and Austin. The ride-sharing company said in a statement that Argo has been a great partner and that the development does not affect Lyft’s autonomous strategy. “We will continue to work with other partners to advance the safety and commercialization of AV technology,” a Lyft spokesperson said in an emailed statement. “Lyft is the current leader in paid AV rides with over 100,000 rides in North America. With the combination of hybrid networks, market engines and fleet management capabilities, we are well positioned to succeed in the AV transition.” Lyft also has partnerships with AV companies Motional and Waymo. Argo was founded in 2016 by Bryan Salesky and Pete Rander. The company broke out of stealth in February 2017 when Ford announced it would invest $1 billion in Argo over five years. Since then, the company has raised more than $2.6 billion, primarily from Ford and VW, to develop, test and commercialize autonomous driving systems. The initial Ford investment came at a time when the early self-driving car industry was particularly hype. Startups founded by early pioneers of Google’s self-driving project have made amazing venture capital deals. A series of arguments followed. GM acquired Cruise for $1 billion in 2016. Delphi, now Aptiv, acquired nuTonomy for $450 million. Amazon acquired Zoox. The promise of commercializing AV technology has proven to be more difficult than expected. A wave of mergers swept the industry as companies collapsed and were absorbed by other companies, including Apple. Others have shifted to the public market, either through traditional IPOs like TuSimple or by merging with special-purpose acquisitions to raise the capital Aurora needs to continue its mission. Argo seemed to be gaining ground over the past year. The company’s self-driving Ford Fusion vehicle and now the Ford Escape Hybrid have been frequently tested on public roads in Austin, Detroit, Miami, Palo Alto and Pittsburgh, where it is headquartered. In the EU, Argo was using the all-electric Volkswagen ID. Rumors of test programs in Hamburg and Munich. Argo is also running several pilot programs in Austin, Miami and Pittsburgh with Lyft, Walmart and 412 Food Rescue. Last month, the company unveiled an ecosystem of products and services designed to support commercial delivery and robo-taxi operations. A list of products that include fleet management software, data analysis, high-definition mapping and cloud-based communication tools go far beyond autonomous driving systems that allow vehicles to navigate city streets without a human being in the driver’s seat. Argo seemed to let the world know that it was open for business. “We are very grateful for the dedication of the Argo AI team and are proud of what we have accomplished together,” Saleski and Lander said in a statement. “The team has consistently delivered more than that and we expect everyone to succeed in everything that comes next, including the opportunity for Ford and VW to continue working on autonomous driving technology.”
#Ford #shuts #Volkswagenbacked #Argo

Leave a Comment

Your email address will not be published. Required fields are marked *