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Ford and VW close down Argo AI autonomous car unit

Autonomous-car specialist Argo AI is closing down after Ford and Volkswagen, Argo’s main backers, ended support for the Pittsburgh-based company.

First reported by TechCrunch and later confirmed by the two auto giants, some of the 2,000 workers at Argo will transfer to Ford and Volkswagen, while others without an offer will receive a severance package. Argo’s technology is also set to end up in the possession of the two companies, though at this stage it’s not clear how it might be shared.

“In coordination with our shareholders, the decision has been made that Argo AI will not continue on its mission as a company,” Argo said in a statement on Wednesday. “Many of the employees will receive an opportunity to continue work on automated driving technology with either Ford or Volkswagen, while employment for others will unfortunately come to an end.”

Ford said that for now, it intends to focus on developing driver assistance technology rather than aiming for full automation, which Argo was working on.

Jim Farley, Ford president, said on Wednesday that when the automaker invested in Argo and autonomous vehicles in 2017, it anticipated being able to bring to market by 2021 self-driving capabilities graded at Level 4, a level described as highly advanced and one grade short of the maximum Level 5, which offers full automation.

But in a strategic pivot, Farley said Ford is currently working on L2+ and L3 applications that “make transportation even safer.” He said he felt “optimistic about a future for L4 advanced driver assistance systems, but profitable, fully autonomous vehicles at scale are a long way off and we won’t necessarily have to create that technology ourselves.”

The Ford president confirmed that the automaker will hire engineers from Argo to expand and speed up the development of these opportunities. Meanwhile, German automaker Volkswagen said it will now shift its focus toward Cariad, its unit developing autonomous driving software.

In a statement, Oliver Bloom, the automaker’s CEO, said “focus and speed count” when it comes to developing future technologies, adding that Volkswagen’s goal is to give its customers “the most powerful functions at the earliest possible time and to set up our development as cost-effectively as possible.”

Argo was co-founded six years ago by Bryan Salesky, who came from Google’s autonomous-car unit that eventually became Waymo, and Peter Rander, who had earlier worked on Uber’s now-abandoned self-driving project.

Argo has been testing its autonomous vehicles in eight cities around the world, and in May it announced it had started testing fully driverless vehicles in Miami and Austin. It had also partnered with Walmart to test a driverless delivery service, and robotaxi services were in its sights, too.

Ford and Volkswagen’s Argo investments totaled $1 billion and $2.6 billion, respectively, but the two automakers have now concluded that the dream of fully autonomous vehicles is not worth chasing, at least for now.

The joint move is an indication of the pressures faced by firms in the autonomous-car industry, with large financial investments yet to lead to any meaningful revenue returns.

One of the industry leaders, Alphabet-owned Waymo, has been testing robotaxi services for paying customers in several U.S. cities since 2018, but local regulations and the technology’s careful development mean that progress on exiting pilots and rolling out such services more widely is slow.

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