FORD DISBANDS ARGO AI AUTONOMOUS VEHICLE UNIT, POSTS LOSS

Ford said that it is disbanding Argo AI, an autonomous vehicle company that it co-owns with Volkswagen.

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Executives said they don’t see a path to profitability on fully autonomous vehicles, and will now focus on partially automated driver-assist systems, which need to be monitored by humans.

“We’ve looked at this every way that you can,” Chief Financial Officer John Lawler told reporters. “We just see the profitability, given the investment that’s going to be required, a long way out.”

It would take billions of dollars for Ford to put self-driving robotaxis on the streets, Lawler said, yet it wasn’t clear when that would happen “in a way that would allow us to have a profitable return on that investment.”

The move by Ford and VW suggests how difficult and costly it is to make self-driving cars a reality, said Guidehouse Research mobility analyst Sam Abuelsamid. The business, he said, has required big investments for years with few results, and investor appetite to sink in more money has waned.

He expects consolidation in the industry, possibly to five or six major players. “More companies are going to go under,” he said. “They’re just going to run out of cash runway or in some cases perhaps get absorbed by one of the bigger players.”