AI alliance lasts only three years
VW and Ford scrap expensive robot car project
10/26/2022, 11:55 p.m
In 2019, Volkswagen and Ford sign an ambitious pact. Together they want to develop self-driving cars with Argo AI. Only three years later, the project is history. While Ford is already posting depreciation, VW wants to make an offer to employees who are willing to change
The Volkswagen Group and its US partner Ford are withdrawing from the joint project involving robot cars at the software company Argo AI. While the Wolfsburg surprisingly announced in the evening that they would no longer invest in Argo, Ford announced that it would completely exit the business. The American carmaker booked a write-down of 2.7 billion dollars for this, as he announced after the US stock market closed. This charge resulted in a net loss of $827 million in the third quarter.
The two partners agreed in 2019 on a broad-based joint development of the technology and each held 40 percent in Argo. VW intends to present a new partner for its robot taxis previously planned with Argo. It is still planned that they will be launched in Hamburg in 2025 via the mobility subsidiary Moia.
VW offer for Argo employees
The development of technology for autonomous driving is expensive and also considered risky because the prospects of success, including possible future profits, are unclear. With Ford’s departure, Argo as a company should be history. According to US media reports, employees were informed on Wednesday that the Pittsburgh-based company would be closed. Volkswagen wants to offer employees to change positions.
“Focus and speed count, particularly when it comes to the development of future technologies,” said Volkswagen CEO Oliver Blume. “Our goal is to offer our customers the most powerful functions at the earliest possible time and to make our development as cost-efficient as possible.”
Volkswagen entered the then Ford subsidiary in 2019 with an investment of over 2.6 billion US dollars. The investment was decided as part of a broader alliance with great ambitions. In addition to a billion dollars in funds, VW had also brought in its own subsidiary AID. By 2022, VW Ford was also supposed to buy further shares worth around 500 million dollars, that was the plan at the time.
Next damper for VW
With the end of the joint project with Ford, VW has to cope with another sensitive damper on its software ambitions. The group recently had to deal with problems at its group-owned software subsidiary Cariad, which is equipped with billions. There were delays in new software generations, which also resulted in the delayed launch of new car models. The software problems are also a reason why ex-boss Herbert Diess had to resign.
The end of the cooperation with Argo does not affect Ford’s use of VW’s own modular electric car system MEB. The cooperation between the car companies is based at the subsidiary VW Commercial Vehicles in Hanover, where vans are also jointly developed.