Volkswagen Joins Ford In Investing In Argo AI, An Autonomous Vehicle Platform

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Ford already placed a bet on Argo AI, investing in the company’s self-driving system (SDS). Now, in an expansion of its global alliance with Ford, Volkswagen is also jumping aboard to invest in the autonomous vehicle technology platform company.

  • With its $1 billion dollar investment, Ford put startup Argo AI on the map
  • In an expansion of its alliance with Ford, Volkswagen becomes an equal stake partner in Argo.
  • Though sharing Argo’s SDS, Ford and VW will remain competitors in the marketplace with individual purpose-built vehicles.
  • Ford will also become the first automaker outside the VW Group to use Volkswagen’s Modular Electric Toolkit

Argo was established in 2016, but didn’t land on the map until Ford banked $1 billion on funding the startup. Ford had to do something, they were painfully behind in the autonomous driving game. Rather than build its own self-driving technology, Ford went out and bought a company instead. If you’ve got the money, there’s no need to try to reinvent the wheel when there are others already expert in the AI field.

Why Is Ford Partnering With Argo?

Ford’s investment in Argo came as a big surprise to everyone, perhaps even including Argo itself. When the deal with Ford was first announced, Argo’s website didn’t have much information available about the company or its technology. So why did Ford choose this unknown startup to compete against players such as Waymo, Tesla, Uber and GM?

The new Ford Fusion Hybrid is a third-generation test vehicle that Argo AI is now deploying in collaboration with Ford in all five major cities of operation: Pittsburgh, Palo Alto, Miami, Washington, D.C., and now Detroit – where Ford is expanding testing beyond Dearborn.

Although Argo didn’t have the goods to show (at least to the public), it did have the brain trust. Founded by veterans of Waymo and Uber, Argo was established to focus on developing technology to meet Level 4 automation requirements as defined by the Society of Automotive Engineers (SAE).

On the Level 0-5 scale, Level 4 is particularly significant. It’s the level at which the machine is ready to take over and a human driver isn’t necessary–in defined situations. The advanced driver-assistance systems (ADAS) will handle all driving duties within a specific and confined area on a predictable route. For a great explanation of all the different levels of autonomous driving, click here.

Argo Could Be A Real Contender

Argo already scored a coup by catching Ford’s eye. With Volkswagen committing to its platform, Argo AI’s self-driving system (SDS) will be the first with commercial deployment plans for Europe and the U.S. And, it’s primed to make a play as the dominant self-driving technology due to both automaker’s global reach. The magnitude of the deal isn’t lost on Argo AI’s CEO and co-founder.

“Argo AI is fortunate to have a world-class team due to our clear mission and the commitment to deployment from our partners, and together with AID employees, we will have a global workforce to attract even more of the best talent,” said Bryan Salesky, co-founder of Argo AI. “Plus, thanks to Ford and Volkswagen, Argo AI technology could one day reach nearly every market in North America and Europe, applied across multiple brands and to a multitude of vehicle architectures.”

The agreement brings Volkswagen in as an equal Argo stakeholder with Ford, and the two automakers will own the majority of Argo. However, the remaining stake is left as an incentive pool for Argo’s employees. I admire and root for company’s that share success with employees that’s built into the business model.

Although Volkswagen and Ford have come together for this, Ford President and CEO, Jim Hackett, said the companies will “remain independent and fiercely competitive in the marketplace”.  Each will integrate Argo AI’s SDS into purpose-built vehicles to support the distinct people and goods movement initiatives of both companies.

Did you know that prior to becoming CEO at Ford, Hackett didn’t have any automotive experience? To find out why Ford hired a former furniture maker for the top spot, click here.

Ford First Additional Automaker to Use VW’S MEB

In addition to the Argo venture, Ford and Volkswagen announced another collaboration. Ford will be the first company outside the Volkswagen Group to use Volkswagen’s dedicated electric vehicle architecture and Modular Electric Toolkit (MEB). The plan is for Ford to deliver a high-volume zero-emission vehicle in Europe beginning in 2023.

Volkswagen MEB Platform

Volkswagen has already invested $7 billion dollars in MEB. As with any new technology, costs remain high until a certain scale is reached. Volkswagen recognizes that Ford committing to its platform is a win for both automakers.

“Scaling our MEB drives down development costs for zero-emissions vehicles, allowing for a broader and faster global adoption of electric vehicles,” said Volkswagen CEO Dr. Herbert Diess. “This improves the positions of both companies through greater capital efficiency, further growth and improved competitiveness.”

If Argo AI wasn’t a blip on Waymo’s or Uber’s radar, they can’t ignore the company now.  Ford backing the company was one thing, but Volkswagen Group signing on the dotted line is another. Do the more veteran autonomous driving platform players have anything to worry about? Ford and VW state they are on track to develop commercial vans and medium pickups for each brand in select global markets starting in 2022. I guess we’ll see then.

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