By on June 2, 2020

U.S. self-driving startup Argo AI has completed a deal with Volkswagen AG on self-driving vehicle technology, fulfilling VW’s wishes for a secure and affordable source of gee-whiz gadgetry for future mobility solutions.

The deal, valued at $2.6 billion, will see VW fork over a cool billion while folding its Autonomous Intelligent Driving team into Argo AI’s operations. The automaker’s alliance partner, Ford, pledged $1 billion (over five years) to the startup in 2017, before last year’s tie-up with the German automaker.

Together, VW and Ford plan to use self-driving hardware and software suites developed by Argo AI to fuel its mobility ambitions in North America and Europe. A tentative deal was inked last July.

The Pittsburgh-based startup released a statement from CEO Bryan Salesky and its European arm’s veep, Reinhard Stolle, claiming “with the close of Volkswagen AG’s investment, we become a global company.”

“This news not only solidifies our well-capitalized position, but differentiates us as the only self-driving technology platform company with partnerships and commercial agreements for deployments across the U.S. and Europe,” the two said.

As part of the deal, Ford and VW will receive minority stakes in Argo AI.

“Working together with Argo AI positions both Ford and Volkswagen to better serve our future customers while improving cost and capital efficiencies,” John Lawler, CEO of Ford Autonomous Vehicles LLC and vice-president of the automaker’s mobility partnerships, said in a Medium post. “While the uncertainty of today’s business environment has created challenges for partnerships and investments in the self-driving space, this collaboration remains on track and will be a positive development for everyone involved

Ford aims to tap into the potential riches of autonomous ride-hailing and other fleet services by releasing a fleet of its own self-driving vehicles. Detroit rival Fiat Chrysler already has a plan and a fleet underway via its partnership with Waymo, while General Motors has its Honda-backed Cruise LLC venture.

“Building a safe, scalable and trusted self-driving service, however, is no small task,” Lawler wrote. “It’s also not a cheap one. We’ve committed to spending more than $4 billion through 2023 on the development of our self-driving service. A large part of this investment is dedicated to developing the self-driving system. With Volkswagen’s investment in Argo AI, we will now share the cost of developing Argo AI’s technology.”

The Blue Oval hoped to have its self-driving fleet in operation by 2021, but the arrival of the pandemic put the kibosh on those plans. The fleet is now expected to hit the road in 2022.

[Image: Ford]

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7 Comments on “Volkswagen – and With It, Ford – Secures Self-driving Deal...”

  • avatar

    I thought the automakers were supposed to be backing off from autonomous vehicles but we keep seeing stories like this.

    Full disclosure, I skipped reading this because of a complete lack of interest in owning an autonomous vehicle. Cars are too expensive already.

    • 0 avatar

      Autonomous vehicles mean people don’t have to own a vehicle and that significantly reduces everyone’s auto expenses. A car will just something you call on a cell phone app. You won’t care about the brand because you don’t own it. Electric vehicles and self driving cars will completely change how people think and use the automobile. Volkswagen made the right move.

      • 0 avatar

        I think VW made the right move for SOME of its’ markets. Autonomous cars make all kinds of sense in places like Europe or China, but I don’t think the market for them here will be as robust.

  • avatar
    SCE to AUX

    BS vaporware.

  • avatar

    Ford currently has something like $37B in cash (including the latest borrowings):

    And plans to drop $4B of that on its “self driving service” during generally tough business conditions [ex. dividend is suspended]. So clearly they are serious about this.

    Someone should warn them that it’s a dead end [if it is] – because plainly they don’t view it that way.

    • 0 avatar

      They pledged $1 billion over 5 years back in 2017 so they have already spend the bulk of it and they are likely contractually bound to giving the rest of the money.

  • avatar

    I hate to be a wet noodle, but considering the goal for the utopians among us is the replace private vehicle ownership with shared autonomous vehicles, there is a new significant hurdle to consider. How can such vehicles be kept sanitary between rides in a post-covid world? Now that the public knows how fast some novel (or known) infectious disease can spread,a public dependent on autonomous vehicles for nearly every errand will have to contend with their potential as a major vector of disease transmission.

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