[ad_1]
Self-driving car developer Argo AI has suddenly announced that it will be closing its doors this week. Some of its 1,800-odd workers, already reduced by summer layoffs, will be offered jobs to “work with automated technology at either Ford or Volkswagen,” Argo spokeswoman Catherine Johnsmeyer said in a statement. The two auto giants had sunk about $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 make self-driving cars is in trouble — or at least more difficult than once thought. As some investors balk at a potential recession and others prepare for a revolution in the form of electric cars, the prevailing wisdom about autonomous vehicles has split.
Some, like General Motors subsidiary Cruise and Google sibling Waymo, have stuck with the program. They have started to implement robotax services in some places with limited functionality – at the cost of billions. Sure, they’re behind the schedules that were widely advertised five years or so ago, but they’ve taken a pragmatic approach and are working on the problem.
Others, like Ford and Volkswagen, are changing lanes. They’ve shied away from spending big in hopes of making a monster payout for some remote self-driving car tomorrow, preferring to support technologies they can sell to car buyers today.
Far from being a lightweight when it comes to autonomous vehicles, Argo was a big and respected player. The company was founded in 2017 with a nearly $1 billion investment from Ford, which was then looking to catch up with the autonomous Joneses — Google, Uber, General Motors and VW. Argo’s pedigree was thanks to President Peter Rander, an alumnus of Uber’s abandoned self-driving project and among those poached by the ride-hailing company from the National Center for Robotics, and CEO Bryan Salesky, a veteran of Darpa’s challenges that began. The rush of the 21st century towards autonomy.
Argo had its 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 built a reputation in the industry for its safer approach to the dangerous project of testing robots on public roads. In addition to backing from big names like Ford and Volkswagen, it also received funding from partner Lyft, Uber’s ride-hailing rival.
What went wrong? Ford executives put it most bluntly during a call with investors this week: They don’t think self-driving makes much sense right now. The reasons cited point to major problems for the entire emerging self-driving industry. Ford CEO Jim Farley said the company learned through Argo that we have a long way to go before we get to a truly self-driving car. He estimates that about $100 billion has been invested in the AV industry overall, “and yet no one has defined a profitable business model at scale.”
For the accountants at auto giant Ford, the math on the Argo, which took in more than $3 billion in its short life, just didn’t add up. They calculated that it would take five years or more “before you actually get to something that starts to create a meaningful business,” said John Lawler, Ford’s chief financial officer. The company this quarter disclosed a $2.7 billion accounting charge to shut down Argo, which resulted in a loss of $827 million.
[ad_2]
Source link
