Autonomous vehicle start-up Argo AI is set to shut down.
The company started with a $1 billion investment in 2017. Now, it's on the way out, with Ford and Volkswagen, the company's two main backers, set to absorb it.
Employees were reportedly told that they get a severance package with insurance plus two different bonuses. One bonus would be an annual award and the other would be based on the transaction with Ford and VW. Some employees will get offers to work for Ford or VW, and those that don't will receive termination and severance pay and health insurance. Reports indicate that the package was generous.
Those same reports say that company founders spoke to the company's over 2,000 employees.
Argo put out a statement: “In coordination with our shareholders, the decision has been made that Argo AI will not continue on its mission as a company. Many of the employees will receive an opportunity to continue work on automated driving technology with either Ford or Volkswagen, while employment for others will unfortunately come to an end.”
This news comes shortly after Ford said it would shift resources towards advanced driver-assistance tech and away from autonomous vehicles. A third-quarter $2.7 billion non-cash, pre-tax impairment on Ford's investment in Argo AI led to an $827 million net loss in the quarter.
Ford also apparently struggled to get new investors for Argo AI.
Ford CEO Jim Farley: “But things have changed, and there’s a huge opportunity right now for Ford to give time — the most valuable commodity in modern life — back to millions of customers while they’re in their vehicles. It’s mission-critical for Ford to develop great and differentiated L2+ and L3 applications that at the same time make transportation even safer.”
Farley also said Ford might buy autonomous-vehicle tech down the road: “We’re optimistic about a future for L4 ADAS, but profitable, fully autonomous vehicles at scale are a long way off and we won’t necessarily have to create that technology ourselves.”
A company statement suggested that Ford isn't completely jumping out of the AV game: “Development and customer enthusiasm for benefits of L2+ and L3 ADAS warrant dialing up the company’s near-term aspirations and commitment in those areas.”
Whether that's true or just a bit of reassuring copy in the wake of Argo's end remains to be seen.
Volkswagen, for its part, plans to use its Cariad software and partnerships with Bosch and China's Horizon Robotics to work on AVs.
Ride-share service Lyft had a small stake of 2.5 percent in Argo, and also had plans to launch 1,000 AVs across several markets over the next half-decade. Lyft says its plans remain on track.
“We will continue working with our other partners to advance the safety and commercialization of AV technology. Lyft is the current leader in paid AV rides in North America with over 100,000 rides completed. We’re well positioned to win the AV transition through the combination of our hybrid network, marketplace engine and fleet management capabilities,” the company said in a statement.
Argo wasn't Lyft's only AV partner. It also works with Motional and Waymo.
Argo had raised $2.6 billion, mostly from Ford and Volkswagen, since the initial investment in 2017. The development of autonomous vehicles has been very challenging, but Argo seemed to be working towards advancing the use of the tech. Most recently, Argo AI was working up a system to support the use of autonomous vehicles for commercial deliveries and use as robotaxis.
[Image: Ford]
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