27.4 C
New York
Friday, June 21, 2024

Ford Abandons the Self-Driving Road to Nowhere

Self-driving car developer Argo AI suddenly announced that it was closing its doors this week. Some of its 1,800-odd employees, already reduced by summer layoffs, are to be offered jobs to “work on automated technology with either Ford or Volkswagen,” Catherine Johnsmeyer, an Argo spokesperson, said in a statement. The two auto giants had sunk some $3.6 billion into Argo and owned most of it. Now, they had decided to pull the plug.

The end of Argo is just the latest sign that the global effort to get cars to drive themselves is in trouble—or at least more complex than once thought. As some investors bear down for a potential recession and others prepare for a revolution in the form of electric cars, the prevailing wisdom on autonomous vehicles has fractured in two.

Some, like General Motors subsidiary Cruise and Google sibling Waymo, have stuck with the program. They have started to roll out robotaxi services in a few places with limited functionality—at the cost of billions. Sure, they’re behind the schedules widely touted some five years ago, but they have adopted a pragmatic attitude and are plugging away at the problem.

Others, like Ford and Volkswagen, are changing lanes. They’ve given up spending heavily in hopes of a monster payout some distant self-driving tomorrow and prefer to back technologies they can sell to car buyers today.

Far from a lightweight in autonomous vehicles, Argo was a major and well-respected player. The company was founded in 2017 with a nearly $1 billion investment from Ford, which was then eager to catch up with the autonomous Joneses—Google, Uber, General Motors, and VW. Argo had pedigree, thanks to president Peter Rander, an alumnus of Uber’s abandoned self-driving project and among those the ride-hailing company had poached from the National Robotics Engineering Center, and CEO Bryan Salesky, a veteran of the Darpa challenges that kicked off the 21st century’s rush to autonomy.

Argo had wheels on the road and was testing in at least eight cities in the US and Germany, including its home base of Pittsburgh. And it had acquired a reputation in the industry for its safer approach to the dangerous project of testing robots on public roads. In addition to the backing of big names like Ford and Volkswagen, it received funding from partner Lyft, Uber’s ride-hailing rival.

Most PopularBusinessThe End of Airbnb in New York

Amanda Hoover

BusinessThis Is the True Scale of New York’s Airbnb Apocalypse

Amanda Hoover

CultureStarfield Will Be the Meme Game for Decades to Come

Will Bedingfield

GearThe 15 Best Electric Bikes for Every Kind of Ride

Adrienne So

What went wrong? Ford executives laid it out most bluntly on a call with investors this week: They don’t think self-driving makes much sense right now. The reasons given suggest big problems for the whole nascent self-driving industry. Jim Farley, Ford’s CEO, said the company learned through Argo “that we will have a very long road” to get to a truly self-driving car. Overall, some $100 billion has been poured into the AV industry, he estimated, “and yet no one has defined a profitable business model at scale.”

For the accountants at auto giant Ford, the math of Argo, which took in more than $3 billion during its brief life, just didn’t add up. They calculated it would be five years or more “before you could actually get to something that started to generate a meaningful business,” said John Lawler, Ford’s chief financial officer. The company disclosed a $2.7 billion accounting charge this quarter to wind down Argo, resulting in an $827 million loss.

Ford now says it will focus on surer technological bets. Its share of Argo employees will be redirected to work on automated “driver assist”—that is, tech that helps drivers stay safe and sane in stop-and-go traffic but doesn’t do the driving itself. Volkswagen is clinging to some version of autonomous driving and has committed to launching a limited robotaxi service in Germany by 2025. But it too is investing in features that fall short of self-driving, with the aim of allowing “drivers to explicitly take their hands off the steering wheel at times,” according to a press release—an experience far short of the dream of napping while a robo-chauffeur takes control.

Further evidence of the industry’s focus on partial automation came this week from the strong return of Israeli auto supplier Mobileye to public markets after time spent as part of chipmaker Intel. Some 50 auto manufacturers use cameras, chips, and software from the company, which is mostly focused on advanced driver assistance, not autonomy.

As if to underline the message that true “self-driving” remains distant, Reuters reported soon after Argo’s death notice that Tesla is under criminal investigation by the US Department of Justice for claims related to an upgrade it sells called “Full Self-Driving.” The features offered under that brand, including Tesla’s famous Autopilot, are not self-driving as most people understand the term—instead, the driver is supposed to be poised to grab the wheel and take control at any moment. But Tesla CEO Elon Musk and his company have been accused by safety experts of muddying the waters, and definitions, of what a self-driving car can be. Tesla, which has disbanded its press office, did not respond to a request for comment on the reported probe.

Elon Musk may like to think himself a maverick, but he’s not entirely alone in staying the course—and insisting, loudly, that self-driving is the way. “We’re seeing increased separation between the companies operating commercial driverless services and those that are still stuck in the ‘trough of disillusionment,’” Kyle Vogt, the CEO of General Motors subsidiary Cruise, said on call with investors this week.

Since late spring, the company has run a driverless taxi service in San Francisco. Yet it only operates in clear weather, at night, and it has suffered odd outages that blocked traffic. The project has burned through nearly $1.4 billion in just the first nine months of 2022. Waymo, which already runs a paid robotaxi service in Arizona, announced this month that it would expand its own self-driving car service to Los Angeles. When contacted by WIRED, it wouldn’t commit to a timeline for opening that service to the public.

Related Articles

Latest Articles