Ford CEO Farley explains the business drivers behind the Argo AI shell

Shortly after news broke Wednesday afternoon that self-driving subsidiary Argo AI would be dissolved, Ford CEO Jim Farley took part in the company’s third-quarter conference call and spoke at length about how management reached the decision. “It is estimated that more than a hundred billion have been invested in the promise of level four autonomy,” he said during the call, “and yet no one has defined a profitable business model at scale.”

In short, Ford is focusing its investments away from the longer-term goal of Level 4 autonomy (that’s a vehicle that can navigate without human intervention, although manual steering is still an option) for the more immediate near-term gains in faster L2+ and L3 autonomy . L2+ is state of the art today, think Ford’s BlueCruise or GM’s SuperCruise technologies with hands-free driving on pre-mapped highway routes. L3 is where you board the vehicle and handle all safety-critical functions along these routes, not just steering and lane-keeping.

“Large-scale commercialization of L4 autonomy will take much longer than we previously anticipated,” Doug Field, Ford’s chief advanced product development and technology officer, said during the call. “L2+ and L3 driver assistance technologies have a larger addressable customer base, allowing for faster scaling and profitability.”

“It’s about putting that investment in a business that we think we’re going to generate a sizeable return on in the short term compared to one that’s going to have a long arc,” he added. The company has not provided a specific timeframe for potential completion, although Farley stressed that development of the foundational technologies required for Level 4 will not be gained quickly. “We don’t expect a single ‘Aha!’ Just like before,” he said.

Farley expects updated L2+ and L3 systems to roll out in the coming years, along with the company’s second cycle of electric vehicles in 2023-2025. “Ford is completely renewing its electric vehicle lineup globally, introducing fully upgradable electrical architectures and in-house software development to control the vehicle,” noted Farley.

Fields emphasized the importance of keeping much of the back-end functionality of these evolving ADAS technologies in-house. “We will have a core team that can integrate a system and understand its performance at a system level,” he said. “And we will own the software. It’s really important that we also have the connection to these vehicles. L3 is a connected technology, so the ability to have a pipeline that collects data and keeps making the system better – we have to have that.”

“It’s an issue that doesn’t really exist in L4, and it’s a huge opportunity for us to create a Ford experience that’s truly unique,” Fields said.

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