The autonomous driving industry is very hot, but an industry star company is about to close, even if he is backed by two century-old car giants.
According to recent reports, Argo AI, an autonomous driving company jointly invested by Ford (F.US) and Volkswagen, will shut down operations, and its employees and some parts will be taken over by Ford Motor Company and Volkswagen, respectively.
John Lawler, Ford’s chief financial officer, said it’s clear that there is still a long way to go to make fully self-driving cars profitable at scale.
Argo AI was founded in 2016 and is headquartered in Pittsburgh. In February 2017, Ford announced that it would invest $1 billion in Argo over the next five years, and the company has since entered the public eye. Since then, the company has raised more than $2.6 billion, mostly from Ford and Volkswagen, to develop, test and ultimately commercialize its self-driving system. At its peak, the company had a market value of $7 billion and a team of more than 2,000 people.
In Ford’s third-quarter report released on October 27, the situation of Argo AI was also reflected, but it was negative. In Ford’s third quarterly report, Ford attributed one of the important reasons for this quarter’s loss to the failure of its investment in Argo AI.
“Ford’s investment in Argo AI (the company’s stake in self-driving technology) included a $2.7 billion non-cash pre-tax impairment,” Ford said in its third-quarter report.
Ford had high hopes when it invested in Argo AI, but the L4-level autonomous driving technology that Ford expects to be put into use at the end of 2021 has not been implemented. Judging from the latest three quarterly reports, Ford has lowered the development of autonomous driving. It is expected that the L4 level will be adjusted to the L2+/L3 technical level.
When it comes to autonomous driving, people always think of “Autobot” and “Bumblebee” in the movie “Transformers”, which may be the ultimate development goal of autonomous driving, according to the National Highway Safety Administration (NHTSA) and the American Society of Automotive Engineers. The automatic driving classification system formulated by (SAE) actually reaches the L4/L5 level, which is the scene people imagined.
But for now, the technical level of autonomous driving is still relatively low, and it may be more accurate to call it automatic assisted driving. The current technical level is still far from people’s imagination.
Looking at it now, even century-old car companies like Ford and Volkswagen have reluctantly accepted the “reality” and switched from high-level L4 to L2+/L3 technology level.
However, despite lowering its forecast, Ford remains confident in the prospects for autonomous driving. In the third quarterly report, Ford made it clear that although the automotive industry is still far from the large-scale profitable commercialization of L4 advanced driver assistance systems than initially expected, the enthusiasm for L2+ and L3 autonomous driving proves that the company’s recent progress in these areas Ambition and commitment are necessary.
As the development of autonomous driving technology is slow, the valuations of major autonomous driving companies around the world have been lowered since the beginning of this year.
Recently, the global self-driving giant, Mobileye (MBLY.US), the self-driving car subsidiary of Intel (INTC.US), officially landed on the Nasdaq exchange, and its valuation was lowered from the previous US$50 billion to 167 when it was temporarily listed. The valuation has shrunk significantly, but fortunately, the stock rose nearly 40% on the first day after its listing (October 26), but it did not break.
Another company that has suffered a sharp drop in valuation is Waymo, a self-driving company owned by Google, whose valuation has been reduced from a maximum of $175 billion to $30 billion.
Judging from the progress of the technology level and the continuous reduction of the valuation of autonomous driving companies by the capital market, we are still far from the scene in the “Transformers” movie.
Author: Xu Yaoyao