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What went wrong? Ford executives laid it out bluntly in a call with investors this week: They don’t think self-driving makes sense right now. The reasons given suggest big problems for the entire nascent self-driving industry. Jim Farley, Ford’s CEO, said the company learned through Argo “that we have a very long way to go” to get to a truly self-driving car. Overall, about $100 billion has been poured into the AV industry, he estimated, “and yet no one has identified a profitable business model at scale.”
For accountants at auto giant Ford, the math for Argo, which has earned more than $3 billion in its short life, just doesn’t add up. They calculate that it will be five years or more “before you really get to something that starts to build a meaningful business,” said John Lawler, Ford’s chief financial officer. The company disclosed a $2.7 billion accounting charge this quarter to discontinue Argo, which resulted in an $827 million loss.
Ford now says it will focus on more specific technological bets. A portion of those Argo employees will be redirected to work on automated “driver assist”—that is, tech that helps drivers stay safe and sober in stop-and-go traffic but doesn’t do the driving itself . Volkswagen is pursuing some version of autonomous driving and has promised to launch a limited robotaxi service in Germany by 2025. But it is also investing in features that fall short of self-driving, with the goal of allowing “drivers to take their hands off the steering wheel at times,” according to a press release—an experience far removed from the dream of sleeping while a robo-chauffeur takes control.
Further evidence of the industry’s focus on partial automation came this week from the strong return of Israeli auto supplier Mobileye to the public markets after a period spent as part of chipmaker Intel. Some 50 automakers use cameras, chips and software from the company, which often focuses on advanced driver assistance, not autonomy.
As if to underline the message that true “self-driving” remains a long way off, Reuters reported shortly after the announcement of Argo’s death that Tesla was under criminal investigation by the US Department of Justice for claims related to an upgrade it sells called “Full Self-Driving.” The features offered under that brand, including Tesla’s popular Autopilot, are no self-driving as most people understand the term—instead, the driver must be ready to take the wheel and take control at any moment. But Tesla CEO Elon Musk and his company have been accused by safety experts of muddying the waters, and definitions, of what a self-driving car could be. Tesla, which has disbanded its press office, did not respond to a request for comment on the reported investigation.
Elon Musk may like to think of himself as a maverick, but he’s not entirely alone in staying the course—and insists, loudly, that self-driving is the way to go. “We’re seeing an increased separation between companies that operate commercial driverless services and those that are still stuck in the ‘trough of failure,'” Kyle Vogt, the CEO of General Motors subsidiary Cruise, said on the earnings call. investors this week.
Since late spring, the company has been operating a driverless taxi service in San Francisco. But it only works in clear weather, at night, and it suffers from strange outages that block traffic. The project has burned through nearly $1.4 billion in just the first nine months of 2022. Waymo, which already operates a paid robotaxi service in Arizona, announced this month that it will expand its own self-driving car service in Los Angeles. When contacted by WIRED, it would not commit to a timeline for opening that service to the public.
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