Heavy defeat for VW and Ford in self-driving cars

With great ambitions, VW and Ford joined forces in 2019 to advance the development of self-driving cars. Now the partners are pulling the plug on the start-up Argo AI again. At Ford, this has already led to a billion-dollar write-off.

What happened?

The German Volkswagen Group and the Ford Motor Company are withdrawing from their joint robot car project. Volkswagen will no longer invest in the American company Argo AI, Wolfsburg surprisingly announced on Wednesday evening.

The American car maker Ford is immediately bankrupt and booked a write-down of 2.7 billion dollars, it announced on Wednesday after the US stock market closed. This charge resulted in a net loss of $827 million in the third quarter.

The two partners previously each owned 40 percent of the US company and agreed a broad joint development of the technology in 2019.

Why is that important?

With the end of the joint project with Ford, VW is dealing with another sensitive damper on its software ambitions.

The group had to endure with its billions equipped group-owned software subsidiary Cariad Process problems, i.e. delays in new software generations, which also results in delayed launches of new car models.

The software problems are also a reason why ex-boss Herbert Diess had to resign.

The end of the collaboration with Argo will not affect Ford’s use of VW’s own modular electric vehicle system MEB. The cooperation between the car companies takes place at the subsidiary VW Commercial Vehicles in Hanover, where delivery vans are also jointly developed.

What is VW so far?

VW wants for its robot taxis previously planned with Argo, which still has the Mobility subsidiary Moia in Hamburg 2025, will soon present a new partner. However, the company hasn’t mentioned it yet.

Developing autonomous driving technology is expensive and is also considered risky because the prospects for success, including possible future gains, are unclear.

“Focus and speed count, especially when developing future technologies,” said Volkswagen CEO Oliver Blume.

What about Argo AI?

With the departure of Ford, Argo as a company should be history. According to US media reports, employees were informed on Wednesday that the Pittsburgh-based company would be shutting down. Volkswagen wants to offer employees the opportunity to switch jobs.

Volkswagen entered the then subsidiary of Ford in 2019 with an investment of more than 2.6 billion dollars. The investment was decided as part of a broader alliance with big ambitions.

In addition to a billion dollars in funds, VW had also brought in its own subsidiary AID. By 2022, VW Ford also had to buy shares worth about 500 million dollars, that was the plan at the time.

As of July 2020, the company employed more than 1,000 people, according to Wikipedia, with offices in Pittsburgh, Detroit, Palo Alto, Cranbury and Munich. The number of employees is now 2000, writes Tech Crunch.

sources

(dsc/sda/dpa)