#ArgoAI

Autonomous vehicle start-up Argo AI is set to shut down.

With Ford having discontinued the Fusion sedan to prioritize higher-margin models, the automaker will need to select a different unit as its preferred platform for self-driving test mules. It will need to choose wisely, too. According to the company, its fourth of generation autonomous test vehicles will foreshadow real-world commercial endeavors using the technology.

On Tuesday, Ford and Argo AI announced that it would be the Escape Hybrid carrying the torch of technology. Starting this month, models fresh from the factory will be modified with the “latest advancements in sensing and computing technology.” The crossover will then be exposed to the most rigorous testing regimen the automaker’s ongoing AV program can muster. From there, the Escape will serve as the architecture and platform Ford has decided will bring its autonomous vehicle service to life.

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.

While mobility has placed the automotive industry in a state of minor limbo, manufacturers achieving a major breakthrough may yet ascend to heaven — financially speaking. Ford has promised to deliver robot-driven taxis within a couple of years and expended quite a bit of cash to get there since acquiring Argo AI in 2017. However its autonomous arm, Ford Smart Mobility, has only encountered mixed success. Progress in terms of self-driving has been incremental, with the company shuttering some of the side businesses that explored alternative revenue streams (e.g. Chariot) and losing millions though its software investments.

Disinterested with failure, Ford partnered with Volkswagen Group earlier this year. As part of the deal, VW agreed to dump another 2.6 billion into Argo in hopes that it would accelerate development. Ford said it would be taking things a step further on Tuesday and announced the acquisition of two more tech companies.

Developing electric cars for scale in Europe takes time, money, resources and commitment. Volkswagen has the new, advanced MEB architecture designed just for that purpose. There are other automakers, though, who need to have an option. For Ford, that answer was simple. They already are working with VW on several projects, so it makes sense to expand that relationship into platform sharing.

In an announcement that also included VW’s investment into Argo AI, Volkswagen committed to providing 600,000 MEB units to Ford for a new electric vehicle that’ll be manufactured and sold within Europe. That includes all of the electric components, according to Dr. Herbert Diess, VW’s CEO. Ford’s CEO Jim Hackett said that it would be “built Ford proud.”

It appears that a presumed rough patch in Ford and Volkswagen’s relationship is over, now that The Wall Street Journal is reporting on VW preparing a nearly $2-billion investment into the Blue Oval’s autonomous development unit, Argo AI.

Earlier this month, claims arose that negotiations had reached an uncomfortable crossroad, with Volkswagen balking at Ford’s proposed admittance fee. Under the new deal, VW would set aside $600 million as an equity investment into Argo — acquiring half of the business in the process — followed by subsequent investments totaling $1.1 billion for the subsidiary’s research and development efforts.

Argo AI, the Pittsburgh-based firm Ford pumped $1 billion into and handed responsibility for educating its self-driving vehicles, just received a go-ahead for testing in the State of California. The company gained a testing permit from the California Department of Motor Vehicles on Tuesday, making its autonomous trials perfectly legal on public roads.

Ford’s current trajectory has its autonomous vehicles entering the commercial market by 2021. That’s two years after General Motors promised to do the same. However, recent events cast doubt over whether GM will be able to meet its self-imposed deadlines (some of which dictate future investments from its partners) and start mass production of computer-controlled cars by the end of this year. It’s not just GM that’s having trouble, either. A critical look into autonomous development shows many companies are struggling with advancing the technology to a point that would make it commercially viable.

The Blue Oval might be better positioned in the autonomous race than initially presumed.