Ford announced Wednesday it has dropped capital spending on L4 advanced driver assistance systems being developed by Argo AI to focus on L2 and L3 systems developed inside Ford.
“The auto industry’s large-scale profitable commercialization of Level 4 advanced driver assistance systems will be further out than originally anticipated,” Ford said in a statement that accompanied its third quarter earnings report. “Development and customer enthusiasm for benefits of L2+ and L3 ADAS warrant dialing up the company’s near-term aspirations and commitment in those areas.”
The lower levels of L2 and L3 usually cover features such as lane centering technology and rear end accident prevention tech while L4 is considered nearly full self-driving technology where AI makes predictions on potential crashes and then corrects. L4 can also involve hands free navigation over the course of a trip. L4 is considered high automation where L4 vehicles can intervene if things go wrong.
In making its decision on L4, Ford said Argo AI “had been unable to attract new investors” and as a result Ford recorded a $2.7 billion pretax impairment on its investment in Argo AI resulting in an $827 million net loss for Q3. Ford plans to hire at least some of the Argo AI engineers.
In a Q3 earnings statement, CEO Jim Farley said the company is “making smart choices about how we deploy capital even as we learn adapt.” And that includes adapting as circumstances change, as with the Argo AI decision.
Revenues for the quarter were $39.4 billion, up 10% from a year ago, while adjusted earnings were $1.8 billion above an estimated made in September.
The increase in revenue came despite supply chain issues. In mid -September, Ford had said it would have 40,000 vehicles on wheels that were built but still need parts. Those will be completed and sold to dealers in Q4.
In 2017, Ford invested in Argo AI and autonomous vehicles and at that point anticipated bringing level 4 ADAS (Advanced Driver Assistance Systems) broadly to market by 2021.
“But things have changed and there’s a huge opportunity right now for Ford to give time…back to millions of customers while they’re in their vehicles,” Farley said in a statement. “It’s mission-critical for Ford to develop great and differentiated L2+ and L3 applications that at the same time make transportation even safer.
“We’re optimistic about a future for L4 ADAS, but profitable, fully autonomous vehicles at scale are a long way off and we won’t necessarily have to create that technology ourselves.”
Ford plans to hire talented engineers from Argo AI as it is wound down, he said.
Ford has 83,000 vehicle owners in its Ford BlueCruise and Lincoln ActiveGlide services with 21 million L2 miles in service. ActiveGlide offers Level 2 ADAS with a driver-facing camera to allow hands free driving as long as the driver stays alert and in control of the vehicle.
In early September, Ford said its Mustang Mach-E vehicles would get three more hands-free features this fall based on BlueCruise and ActiveGlide tech. The features are for lane change assist, predictive speed assist and in-lane positioning.
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