Vw To Invest $17b In Ford’s Argo Ai Report Says
Nothing about the future will come cheap.
Andrew Krok
Reviews Editor / Cars
Cars are Andrew’s jam, as is strawberry. After spending years as a regular ol’ car fanatic, he started working his way through the echelons of the automotive industry, starting out as social-media director of a small European-focused garage outside of Chicago. From there, he moved to the editorial side, penning several written features in Total 911 Magazine before becoming a full-time auto writer, first for a local Chicago outlet and then for CNET Cars.
Bloomberg recently reported that Volkswagenmight invest in Ford’s AV subsidiary Argo AI as part of a growing partnership between the two automakers. Now, we might know how much that investment will cost VW.
VW plans to invest approximately $1.7 billion in Argo AI, The Wall Street Journal reports, citing sources familiar with the matter. Of that total, $600 million will reportedly go to equity, while the remaining $1.1 billion will be spent on additional research and development, the sources told the WSJ.
The Journal reports that VW and Ford will treat Argo as “the nucleus of an equally held joint venture that could receive additional assets from Volkswagen over time.” A previous report says the two value Argo at $4 billion, which would put VW’s reported future investment at nearly 50 percent of that sum.
Bevs Now The Priority
Farley has drawn a line in the sand: a manufacturing rate of 600,000 BEVs annually by the end of 2023. In 2021, the manufacturing rate was roughly 60,000 BEVs for the year. By 2026, 2 million BEVs annually.
Ford isn’t the only global automaker to contend with these complex and potentially hazardous strategic conundrums. I have written on several occasions that Toyota Motor Corp. , in my judgment, has chosen the most sensible course, resisting the encouragement of environmental activists to go all-in, at full speed, on BEVs.
Toyota has much deeper pockets than Ford, yet its approach is multi-pronged: Energy saving gas-electric hybrids, plug-in hybrids, conventional gasoline models, and a limited number of BEVs until consumers and the infrastructure are ready for a larger number. If you’re buying shares in one global automaker, TM is the best bet.
Ford’s decision first to go all-in and then to shut down Argo AI raises the tantalizing question of what might happen three to five years from now if the BEV business mirrors autonomous driving and proves to be costlier and develops more slowly than anticipated. In the event, Ford might be forced to scale back its BEV commitment in the name of financial prudence.
Volkswagen No Longer Investing In Self
BERLIN, Oct 26 – Volkswagen AG is no longer investing in Argo AI, the company said on Wednesday, concentrating its automated driving efforts on its existing partnerships with Bosch and Horizon Robotics in China.
Volkswagen commercial vehicles will pursue a partnership with a new, soon-to-be named partner, the carmaker said in its statement, with prototypes for its electric van, the ID. Buzz, already in test phase.
The first outcomes from the partnership between Volkswagen’s software unit Cariad and Bosch, announced in January this year, are planned for 2023, the statement said.
Volkswagen disclosed a $2.6 billion investment in Argo AI, the Pittsburgh-based self-driving startup, in June 2020.
The investment meant the startup was jointly controlled by the German carmaker and Ford Motor Co , which made an initial investment in Argo AI shortly after it was founded.
“Volkswagen is working with Argo AI to enable further working opportunities for employees and continue developing the promising projects on autonomous driving. All further cooperations with Ford remain unchanged,” Volkswagen’s statement said.
Don’t Miss: Why Work In Alternative Investments
Ford Invests In Argo Ai A New Artificial Intelligence Company In Drive For Autonomous Vehicle Leadership
- Ford is investing $1 billion during the next five years in Argo AI, combining Fordâs autonomous vehicle development expertise with Argo AIâs robotics experience and startup speed on artificial intelligence software â all to further advance autonomous vehicles
- Founded by former Google and Uber leaders, Argo AI will include roboticists and engineers from inside and outside of Ford working to develop a new software platform for Fordâs fully autonomous vehicle coming in 2021 through their equity participation, Argo AI employees will share in the startupâs growth
- Investment in Argo AI strengthens Fordâs leadership in bringing self-driving vehicles to market in the near term and creates technology that could be licensed to others in the future
San Francisco, Feb. 10, 2017 â Ford Motor Company today announces it is investing $1 billion during the next five years in Argo AI, an artificial intelligence company, to develop a virtual driver system for the automakerâs autonomous vehicle coming in 2021 â and for potential license to other companies.
The current team developing Fordâs virtual driver system â the machine-learning software that acts as the brain of autonomous vehicles â will be combined with the robotics talent and expertise of Argo AI. This innovative partnership will work to deliver the virtual driver system for Fordâs SAE level 4 self-driving vehicles.
Volkswagen Ford To Invest Billions In Argo Ai On Autonomous Vehicle Technology
Volkswagen AG and Ford Motor Co. confirmed on Friday they will collaborate on electric vehicles and invest billions of dollars in Argo AI, a Pittsburgh-based autonomous vehicle technology platform company.
Argo AIs self-driving system is the first with commercial deployment plans for Europe and the United States. Through the partnership with Volkswagen and Ford, Argo AIs platform has the largest geographic deployment potential of any autonomous driving technology to date, the companies said in a joint statement.
As part of the transaction, Volkswagen will commit $1 billion in funding and will contribute its $1.6 billion Autonomous Intelligent Driving company, which includes more than 200 employees. Ford will invest the remaining $600 million of its previously announced $1 billion cash commitment in Argo AI. The full transaction represents a more than $7 billion valuation for Argo AI.
Ford and Volkswagen will have an equal stake in Argo AI, and combined, Volkswagen and Ford will own a substantial majority. The remainder will be used as an incentive pool for Argo AI employees.
Based in Munich, Germany, AID will become Argo AI´s new European headquarters.
While Ford and Volkswagen remain independent and fiercely competitive in the marketplace, teaming up and working with Argo AI on this important technology allows us to deliver unmatched capability, scale and geographic reach, Ford President and CEO Jim Hackett said.
Post navigation
Recommended Reading: Financial Planning Vs Investment Management
Ford Decided It Needed To Invest In Driver
Creating a robotaxi capable of navigating in a dense urban landscape is “harder than putting a man on the moon,” said Doug Field, Fords chief advanced product development and technology officer.
Argo AI, the autonomous vehicle technology company backed by Ford and Volkswagen Group, is shutting down as the automakers shift their strategies for self-driving cars.
Ford decided it needed to invest in driver-assistance technology that was more achievable in the near term rather than Argos goal for driving with little human interaction, the automaker said in a statement.
“Profitable, fully autonomous vehicles at scale are a long way off and we wont necessarily have to create that technology ourselves,” Ford CEO Jim Farley said in a statement Wednesday.
Fords decision led VW to walk away, too, according to people familiar with the matter.
VW said it is no longer investing in Argo AI and plans to focus its automated driving efforts on its existing partnerships with Bosch and Horizon Robotics in China.
“Especially in the development of future technologies, focus and speed count,” VW Group CEO Oliver Blume said in a statement. “Our goal is to offer our customers the most powerful functions at the earliest possible time and to set up our development as cost-effectively as possible.”
Ford and VW continue to cooperate on electric and commercial vehicles in the U.S. and Europe.
Reuters contributed to this report.
Related Article
Ford Vw Shuttered Venture After Retailers Interest Waned
Amazon.com Inc. emerged as a potential savior for Argo AI, the now-defunct startup backed by two of the worlds biggest automakers, before the deal fell apart because of a sputtering economy, concerns about control and flagging faith in fully autonomous driving.
The online retailer was prepared to invest several hundred million dollars into Argo last spring, according to people familiar with the matter who disclosed Amazons involvement for the first time. Amazon planned to use Argos self-driving technology to automate some of the electric delivery vans its buying from Rivian Automotive Inc., setting up a test fleet in multiple US cities.
Argos key backers Ford Motor Co. and Volkswagen AG were eager to attract a third partner to Argo to help shoulder the high cost of developing self-driving technology, the people said. VWs then-Chief Executive Officer Herbert Diess even traveled to the US to meet with Amazon co-founder Jeff Bezos earlier this year to discuss the deal. The budding relationship soured as Ford and VW grew wary that Amazon would divert Argos talent and attention, said the people, who asked not to be identified revealing internal deliberations. The companies also struggled to come up a governance structure for how they would share control of Argo. Additionally, the retail giant was turned off by the high cost of Argos technology, one of the people said.
Don’t Miss: How To Invest In Us Stocks From India
Here’s Why Ford Is Investing In Argo Ai
Ford Motors CEO Mark Fields poses after unveiling the Lincoln Navigator concept car during the New… York International Auto Show on March 23, 2016.
Recently, Ford Motorsannounced that it will invest $ 1 billion over the next five years in Argo AI which has expertise in robotics and artificial intelligence software. Ford believes that this investment will help in combining Fords autonomous vehicle development expertise with Argo AIs robotics experience, accelerating its efforts to bring a self-driving vehicle to the market in the near term.
With driverless cars being touted as the automobile of the future, Ford is investing heavily to build technology which can support these vehicles and bring its first autonomous car on the road by 2021. The company intends to deliver a high volume, fully autonomous vehicle for ride sharing by 2021. Through its partnership with Argo AI, Ford also expects to build technology which can be licensed to other players in this segment. With several players looking to launch fully autonomous vehicles including fleet taxis in the next few years, this investment will give Ford a competitive edge in this segment. As it transforms into a mobility solutions player, the ability to license this technology to other players can also open additional revenue streams for the company.
Boost To Autonomous Fleet For Ride Sharing, But Regulatory Concerns Remain
View Interactive Institutional Research :
Ford Volkswagen To Absorb Autonomous Vehicle Partner Argo Ai
Ford Motor Co. and Volkswagen AG will absorb their autonomous vehicle partner, Argo AI, in a move that demonstrates the difficulties of success in the self-driving space, experts say.
The move driven in part by Argo’s inability to attract new investors will shut down the Pennsylvania-based startup founded by two Michigan natives that launched publicly in 2017 with a $1 billion investment from Ford. It was a time of buzz for the infant self-driving industry that since has faced consolidation, technology challenges, government regulations and ethical concerns on the road to commercialization. Ford and VW say they will offer jobs to many Argo engineers as they shift their focus to internal technology efforts.
“In coordination with our shareholders, the decision has been made that Argo AI will not continue on its mission as a company,” Argo spokeswoman Catherine Johnsmeyer said in a statement. “Many of the employees will receive an opportunity to continue work on automated driving technology with either Ford or Volkswagen, while employment for others will unfortunately come to an end.”
Details on what will happen to the technology weren’t immediately provided. It also was unclear how many employees would receive job offers. In July, Argo had more than 2,000 employees. TechCrunch first reported the news on Wednesday.
The company, however, did cut 150 jobs in July after it said it had grown too quickly.
bnoble@detroitnews.com
Also Check: Easiest Way To Invest In Cryptocurrency
Auto Makers May Hire Some Of The 2000 Workers From Argo Ai Execs Say While Shuttering Company That Had Wooed $36 Billion In Funding From Major Auto Makers
Pittsburgh-based Argo AI, an autonomous-vehicle startup, is shutting down.
Argo AI, an autonomous vehicle startup, is shutting down as its two big backers, Ford Motor Corp. and Volkswagen AG, indicated that the companys technology is taking too long to commercialize.
Argo AI confirmed to MarketWatch that some of its 2,000 employees will get a chance to continue to work on AV technology with either Ford F, +1.26% .TechCrunch first reported Wednesday that the company would shut down.
We are incredibly grateful for the dedication of the Argo AI team, and so proud of our achievements together, Argo AI Chief Executive Bryan Salesky and President Peter Rander said in a statement. The team consistently delivered above and beyond, and we expect to see success for everyone in whatever comes next.
The news comes as the commercialization of autonomous vehicles has lagged. Bloomberg Businessweek recently published a story titled Even After $100 Billion, Self-Driving Cars Are Going Nowhere, and Mobileye Global Inc. MBLY, +1.30% Chief Communications Officer Dan Galves told MarketWatch on Wednesday as his automated-driving companys stock rose more than 30% in its first day of trading after an initial public offering that investors dont want to talk about right now.
What Volkswagens Investment In Argo Ai Means For Fords Self
Last July, Ford and Volkswagen announced a collaboration with Argo AI to introduce autonomous vehicle technology in the U.S. and Europe. As part of this collaboration, Volkswagen would join Ford in investing in Argo AI. Working together with Argo AI positions both Ford and Volkswagen to better serve our future customers while improving cost and capital efficiencies. While the uncertainty of todayâs business environment has created challenges for partnerships and investments in the self-driving space, this collaboration remains on track and will be a positive development for everyone involved. As a result, Volkswagenâs investment in Argo AI was finalized June 1.
In my previous role as vice president of Ford corporate strategy, I can tell you firsthand the moment our teams started talking, all three parties could see the value of working together. Hereâs what we saw and why we believe it works for everyone involved â including our future customers.
Read Also: How To Transfer Money From Chase Investment Account
Ford Will Be Hiring People From Argo To Work For Ford Directly
Autonomous vehicle company Argo AI is shutting down. In an earnings report, Ford noted that the company is being wound down and that it will hire engineers from the startup to expand and speed up development of Level 2+ and Level 3 autonomous driving systems.
Ford says that it made a decision to refocus its self-driving capital spending from the Level 4 systems Argo was working on to Level 2+ and Level 3 tech it’s developing in-house. It noted that Argo AI wasn’t able to attract new investors and that it was taking a “$2.7 billion non-cash, pretax impairment on its investment” in the company, which led to it posting an $827 million net loss for Q3.
According to TechCrunch, which first reported on Argo AI’s closure, Volkswagen and Ford will snap up the company’s tech and other assets. It’s not clear how the automakers, which invested at least $3.6 billion into Argo AI between them, are divvying things up nor how many of Argo AI’s more than 2,000 workers they plan to make employment offers to. All Argo AI employees will receive bonuses as part of their severance package, with those who Ford and VW don’t keep on receiving additional payments and health insurance, according to the report.
Related Video:
Argo Ais Business Operations
Aikido:
The aikido business model is often characterized as using a competitor’s strength to get an edge over them. This is accomplished through finding weaknesses in a competitor’s strategic position. In addition, it adds to marketing sustainability by exposing rivals’ flaws, finding internal and external areas for development, and attracting consumers via specific product offers that deviate from the norm.
Due to advancements in sensors, wireless communications, and big data, it is now possible to collect and analyze massive quantities of data in a wide range of settings, from wind turbines to kitchen appliances to intelligent scalpels. These data may be utilized to improve asset design, operation, maintenance, and repair or improve how an activity is carried out. Such skills, in turn, may serve as the foundation for new services or business models.
Blue ocean strategy:
The blue ocean approach is predicated on the premise that market limits and industry structure are not predetermined and may be reconfigured via the actions and attitudes of industry participants. This is referred to as the reconstructionist perspective by the writers. Assuming that structure and market boundaries exist solely in managers’ thoughts, practitioners who subscribe to this perspective avoid being constrained by actual market structures. To them, more demand exists, primarily untapped. The core of the issue is determining how to produce it.
Codifying a distinctive service capability:
Digital:
Don’t Miss: Where To Invest In Crypto
Av Developer Argo Ai To Shut Down As Ford Volkswagen Halt Investments
As challenges and safety concerns mount, Ford now sees a long road to fully autonomous vehicles.
Argo AI, an AV technology startup founded by Uber and Google veterans, will shut down following decisions by Ford Motor Company and Volkswagen AG to halt further investments in the company. The two automakers jointly invested in Argo AI.
Ford said that when it made its investment in 2017 that it expected to bring Level 4 self-driving technology to market by 2021. Level 4 refers to systems that do not require any driver interaction with the vehicle.
But things have changed, said Ford President and CEO Jim Farley in its third-quarter earnings release. Were optimistic about a future for L4 , but profitable, fully autonomous vehicles at scale are a long way off, and we wont necessarily have to create that technology ourselves.
All seemed well for Pittsburgh-based Argo AI in May when it began driverless robotaxi service in Miami and Austin, Texas. As recently as September, the company boasted in its newsletter of a new test track in Greenville, South Carolina.
But signs of trouble for Argo AI came in July when the company laid off about 150 employees. At the time, Argo AI reported having more than 1,700 workers. Unable to attract new investors to Argo AI, Ford wrote off its $2.7 billion investment in the company, resulting in an $827 million net loss for the third quarter.
