Here’s Why Ford Is Investing In Argo AI – Forbes
Recently, Ford Motors announced that it will invest $ 1 billion over the next five years in Argo AI (a start-up founded by former Google and Uber leaders) which has expertise in robotics and artificial intelligence software. Ford believes that this investment will help in combining Ford’s autonomous vehicle development expertise with Argo AI’s robotics experience, accelerating its efforts to bring a self-driving vehicle to the market in the near term.
With driverless cars being touted as the automobile of the future, Ford is investing heavily to build technology which can support these vehicles and bring its first autonomous car on the road by 2021. The company intends to deliver a high volume, fully autonomous vehicle for ride sharing by 2021. Through its partnership with Argo AI, Ford also expects to build technology which can be licensed to other players in this segment. With several players looking to launch fully autonomous (SAE Level 4) vehicles including fleet taxis in the next few years, this investment will give Ford a competitive edge in this segment. As it transforms into a mobility solutions player, the ability to license this technology to other players can also open additional revenue streams for the company.
Boost To Autonomous Fleet For Ride Sharing, But Regulatory Concerns Remain
As Ford looks to transform itself into an automobile and mobility solutions company, it is looking to adapt itself to the changing automotive landscape. With car ownership declining and many consumers preferring ride sharing, Ford Motors is looking to launch a fleet of autonomous cars which can provide mobility through an app without the hassles of ownership and service. The company is focusing on SAE Level 4 technology to achieve this goal and expects Argo AI’s robotics expertise to assist in reaching this milestone. However, experts believe that level 4 (fully autonomous) cars can face several regulatory hurdles as they eliminate the need of any human intervention, leading to elimination of several jobs. Given these hurdles several other auto players are investing in level 3 technology for self-driving cars which provides most benefits of fully autonomous cars and are more practical to get regulatory approvals. However, if Ford is able to get the necessary regulatory approvals for its fully autonomous fleet, it will have a huge first mover’s advantage in this segment. While several other players such as Audi and BMW are planning to launch driverless cars in the next few years, Ford is likely to be the first player looking to launch a fleet of autonomous cars for ride sharing.
Ford is betting heavily on fully-autonomous vehicles and is also looking to license this technology to other players in the future. While this bet can give the company a competitive advantage and leadership in this space, the risk of not getting necessary regulatory approvals remains. If this company is able to get these approvals, this initiative can boost Ford’s profitability and revenues in the long term.
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