Ford Takes $2.7 Billion Hit as it Drops Efforts to Develop Full Self-Driving Cars
Ford is essentially pulling the plug on an effort to develop its first full self-driving car, and it’s going to cost the automaker $2.7 billion to walk away.
As reported by CNN, the company announced Wednesday it would no longer provide financial support for Argo AI, a self-driving car technology company it invested $1 billion in back in 2017.
Instead of having Argo develop self-driving car technology for cars without steering wheels, brakes or accelerator pedals — what is known in the industry as Level 4 or L4 technology — Ford will instead pursue in-house development of a lower level of automated driving technology.
The level it will now pursue on its own, known as Level 3 or L3, allows a driver to not pay attention to the road in certain conditions, such as on the highway, but it would expect a driver to be aware enough to quickly take control of the car if needed.
The decision will mean that Argo AI will shutdown. And the drop in value of Ford’s investment in Argo caused it to take a $2.7 billion charge in the just-completed third quarter. That resulted in an $827 million loss in the period.
Even excluding the special charges for Argo and other items, Ford reported adjusted earnings per share of 30 cents, a slide from the 51 cents it earned on that basis a year ago, but a slight improvement over the 27 cents forecast by analysts surveyed by Refinitiv.
Ford reported automotive revenue of $37.2 billion, a jump of $4 billion from a year ago and $1 billion more than the analysts’ forecasts. The revenue was helped by a $3.4 billion from higher pricing on vehicles.
