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Ford Motor Co to Invest $4 Billion in a New Division for Autonomous Vehicle Development

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【Summary】U.S. automaker Ford Motor Co is committing billions of dollars to develop self-driving technology. The company announced today a new division, Ford Autonomous Vehicles LLC, designed to speed up and capitalize on the development of electric vehicles, self-driving technology and smart mobility services.

Derrick Smith    Jul 24, 2018 11:41 AM PT
Ford Motor Co to Invest $4 Billion in a New Division for Autonomous Vehicle Development
author: Derrick Smith   

U.S. automaker Ford Motor Co is committing billions of dollars to develop self-driving technology and related mobility services out of its new Corktown, Michigan office.

The company announced today a new division, Ford Autonomous Vehicles LLC, designed to speed up and capitalize on the development of self-driving technology. In addition, the Detroit-based automaker detailed key organizational changes designed to improve its operational fitness and drive profitable growth of self-driving technology and electric vehicles.

The new division will put all of Ford's autonomous business ventures, including research, development, user experience and ride-hailing under one organization.

The new LLC will be primarily based out of Ford's Corktown campus in Detroit and will hold Ford's ownership stake in Argo AI, a Pittsburgh-based autonomous driving startup that Ford invested $1 billion in.

Ford expects to invest $4 billion in its AV efforts through 2023, including its prior $1 billion investment in Argo AI. The LLC is structured to take on third party investments from venture capital firms.

Corporate Realignments at Ford

Ford also announced realignments to its management structure, to speed up business development and encourage more collaboration between teams working on Ford's self-driving technology.

Sherif Marakby, currently Ford vice president, Autonomous Vehicles and Electrification, was appointed CEO of Ford Autonomous Vehicles LLC reporting to a board of directors chaired by Marcy Klevorn, Ford's executive vice president and president, Mobility.

Ted Cannis, global director, electrification, will lead Ford's Team Edison, the team responsible for developing and bringing to market next-generation electric vehicles.

"Ford has made tremendous progress across the self driving value chain – from technology development to business model innovation to user experience," said Jim Hackett, president and CEO, Ford Motor Company. "Now is the right time to consolidate our autonomous driving platform into one team to best position the business for the opportunities ahead."

The organization changes are effective Aug. 1.

Ford's electric vehicle strategy includes rethinking the ownership experience, including making EV charging an effortless experience, as well as offering over-the-air software updates to enhance capability and features of its vehicles as new software is developed.

"The evolution of computing power and IT have helped bring great products to customers – from cars to tablets," Hackett said. "We can now harness this technology to unlock a new world of vehicle personalization, supply chain choreography and inventory leanness that rivals any industrial model in the world – and Joe's challenge is to help us redesign this system to do just that – while better serving customers and dealers and improving our overall fitness."

Flexible Vehicle Architectures to Save Costs

Ford is also moving to flexible vehicle architectures, which includes shared platforms across models designed to speed up vehicle development time by 20 percent. This is helping Ford achieve its commitment to deliver nearly $7 billion of engineering efficiencies. The company intends to have the most efficient Product Development organization among full-line automakers by 2023.

Ford's five flexible vehicle architectures will be paired with module "families" that include the power pack, electrical pack and vehicle configurations. Seventy percent of each vehicle's engineering will be driven from this new architecture approach, with just 30 percent of content – including grilles, hoods, doors and more – customized for each vehicle.

By 2020, Ford will offer North America's freshest lineup among all full-line automakers focusing more on trucks, small SUVs and crossovers rather than sedans, which are declining in sales industry-wide as consumer preferences change. Ford plans to replace three-quarters of its lineup—adding four new trucks and SUVs. Ford will continue to produce the Mustang.

"We're looking at every part of our business, making it more fit and ensuring that every action we take is driven by what will serve our customers in a way that supports our fitness and performance goals," Hackett said.

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