Ford decided it needed to invest in driver assistance technology that was more achievable in the short term rather than Argo’s goal of driving with little human interaction, the automaker said in a statement.
“Mass-scale, fully autonomous, cost-effective vehicles are still a long way off and we won’t necessarily have to create this technology ourselves,” Ford CEO Jim Farley said in a statement Wednesday.
Ford’s decision also caused VW to walk away, according to people familiar with the matter.
“Especially in the development of future technologies, focus and speed matter,” VW Group CEO Oliver Blume said in a statement. “Our goal is to offer our customers the most powerful functionalities as soon as possible and to set up our development at the best cost.”
Ford and VW continue to cooperate on electric and utility vehicles in the United States and Europe.
Ford Chief Financial Officer John Lawler said Wednesday the company determined it would take more than five years to see a return on its investment in full self-driving. Farley said it would also require billions in additional investment.
“It’s harder than putting a man on the moon” to create a robotaxi that can navigate a dense urban landscape, said Doug Field, director of advanced product development and technology at Ford.
Ford will record a non-cash impairment of $2.7 billion before tax on the investment in Argo AI. Argo AI was unable to find other investors, Ford said. The automaker had supported Argo since 2017. The standalone business had more than 2,000 workers as of July.
“Many employees will have the option of continuing to work on automated driving technology with Ford or Volkswagen, while employment for others will unfortunately end,” Argo AI said in a statement.
Launched in 2016, Pittsburgh-based Argo AI was developing the technology behind driverless vehicles. He had raised at least $3.6 billion in investments, mostly from Ford and VW.