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Ford Open to Driverless Partnerships and Investors

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【Summary】New investments related to Ford’s autonomous vehicles arm will likely be allocated to support ongoing and future pilot programs.

Michael Cheng    Nov 21, 2018 9:12 AM PT
Ford Open to Driverless Partnerships and Investors
author: Michael Cheng   

Ford's 2021 deadline for launching autonomous vehicles on public roads is looming over the business, like a heavy cloud. In order to streamline development, which is currently lagging, the Detroit-based automaker is considering several collaborations with other car manufacturers. 

The company might also welcome new investors to its driverless vehicles unit (Ford Autonomous Vehicles), as well as to Argo.AI. Ford expects to pick up momentum for the launch closer to the 2021 deadline, when new vehicular architecture for autonomous cars will be available.

Ford's Path to Success

At the moment, Ford and Argo.AI are conducting trials in Miami, Detroit, Pittsburgh and Washington DC. New investments related to Ford's autonomous vehicles arm will likely be allocated to support the pilot programs. The two groups are in the process of expanding the trials to additional cities.

"This is a capital-intensive process," said Bryan Salesky, CEO of Argo AI. 

"All the automakers are definitely seeing value in sharing on this technology because they realize at the end of the day it may be a lot of software but it's bolted on to a lot of metal and you have to fund the development, the deployment of those vehicles, that's many, many billions of dollars."

Ford recently elaborated on its plans to profit from self-driving cars. The automaker's plan includes offerings in the ride-hailing space. Moreover, it intends to expand to autonomous third-party deliveries and partnerships with existing, well-established food brands. All of these options are also being targeted by other car manufacturers developing autonomous vehicles; hence, Ford will need to offer something unique or add value to its services to stay relevant after launching its self-driving fleet on public roads.

In a move to become a full mobility solutions provider, the automaker has formed numerous collaborations outside of autonomous vehicles. Ford is working with dockless electric-scooter startup Spin, bus-hailing company Chariot and GoRide, a business that specializes in ride-hailing services for medical facilities. If Ford can successfully integrate these services with its driverless cars, it could help boost the value of its upcoming fleet and attract new investors.

In the ride-hailing industry, Ford is looking to reduce cost of rides – from $2.50 per mile to $1 per mile – using its autonomous vehicles. Interestingly, the business highlighted it could still generate profit under such tight price points. In-car advertising is also part of the company's plan to aggressively monetize on driverless cars.

Volkswagen and Ford?

Discussions about potential partnerships and investments between Volkswagen and Ford are currently ongoing. However, Ford's approach to collaborations with its competitor is apprehensive, as the automaker described the possibility of expansion as a "delicate dance." So far, both businesses have acknowledged the discussions – specifically about future partnerships covering the development of light commercial vehicles.

Volkswagen will closely scrutinize a proposal issued by Ford, which details a long-term plan involving multiple collaborations and alliances within the automotive sector.

"Our (Memorandum of Understanding) with VW covers conversations about potential collaborations across a number of areas. It is premature to share additional details at this time," cited Jennifer Flake, a Spokeswoman for Ford.

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