In 2017, automakers scrambled to develop cars that could drive themselves.
Ford Motor bet $1 billion on a startup called Argo AI to catch up with flashy tech companies like Google, Uber and Tesla. Volkswagen, the world’s second-largest automaker, signed on as a sponsor in 2019, investing $2.6 billion in Argo AI at a valuation of more than $7 billion.
By 2021, Argo AI was valued at $12.4 billion and had 2,000 employees, with offices on two continents and ongoing self-driving tests in seven cities.
There were plans to bring a self-driving taxi service to market by 2021, rivaling those from Waymo and Ford’s biggest Detroit rival, General Motors.
But in October 2022, Argo AI was shut down.
It was another sign that after years of big investments, investors were tempering expectations and money was drying up.
After a storm of enthusiasm, self-driving projects have grown beset by the challenge of developing the necessary technology and establishing a business model profitable enough to justify the billions they spend.
In fact, all kinds of mobility projects are losing money: shared bikes, car rides, scooters and shuttles alike.
“The challenge for Ford and everyone else is trying to figure out how to offer these kinds of mobility services and make a viable, self-sustaining business out of it while keeping the cost of the service affordable for the people who use the services.” said Sam Abuelsamid, principal research analyst at Guidehouse Insights. “They’re still struggling. Everybody’s still struggling with that part.”
Ford has scaled back its ambitions and is focusing on technology that can make money in the short term.
Rivals are pushing ahead, even though it could be years before they make any money. Meanwhile, industry watchers are wondering which company will be next to pull the plug.
Watch the video to learn more.
