When it comes to driverless cars, automakers are all in. But the development of driverless technology is shaking up the traditional organization of these companies.
Instead of keeping autonomous advancements close to the vest, companies are spinning out their driverless business into separate divisions. Alphabet did it with Waymo. General Motors did it with GM Cruise. And Ford is the latest to announce their spinoff, Ford Autonomous Vehicles LLC (AVLLC).
The new subsidiary will have its headquarters at Ford’s Corktown campus in Detroit and will assume Ford’s ownership stake in Argo Al, an artificial intelligence firm. Ford plans to spend $4 billion to make a fully functioning self-driving car available by 2021 – including the $1 billion it spent to purchase Argo AI last year.
Related: Ford reveals its future by getting into the autonomous car business
Divide and Conquer
Like other companies, Ford reasons that developing driverless technologies outside the corporate machine will help the division avoid bureaucratic red tape, making it nimbler and better positioned to jump on opportunity. Operating independently will also give the subsidiary its own budget to work within – and resources. Not to mention it will have one sole focus: get driverless technologies to market fast.
In the past, Ford’s critics stated the company lagged behind its competitors when it comes to automated technologies. To be fair, a 2021 delivery date is years off from its competitors. For instance, Waymo is launching a robotaxi business in Phoenix later this year. But the creation of the separate company clarifies that Ford is aiming to move to the front of the pack.
Sherif Marakby, a Ford veteran who spent a year at Uber Inc. and is now chief executive officer of Ford Autonomous Vehicles LLC, said, “I’m excited that externally, people see that we’re spending some serious money. Now that it’s all under one umbrella, we can get stuff done faster and move quicker. We believe credit will come; we just need to focus on getting the work done.”
As a separate corporate entity, Ford Autonomous Vehicles LLC can now also take third-party investments, much like the $2.25 billion SoftBank invested in Cruise Automation in May. That money is helping GM create a commercial fleet of self-driving, ride-hailing service vehicles. But the movehighlighted the rising valuations of companies at the forefront of automated-driving technology.
In addition, it allows Ford Autonomous Vehicles LLC to create alliances that bring its autonomous vision to market quicker. In the quest to develop driverless technology, strange bedfellows have emerged and the lines between automakers and tech companies has blurred. BMW and Daimler paired up to consolidate buying. And other car-makers are partnering to spread risk and cost burden, even if it means forgoing outright ownership.
What to Expect from Ford Autonomous Vehicles LLC
Ford is already piloting an autonomous program in Miami, Detroit and Pittsburgh. The company is also testing a prototype of autonomous cars, as a delivery vehicles for Domino’s and Postmates.
Ford Autonomous Vehicles LLC plans to work hard on research that advances algorithms, radar tech, 3D mapping and camera sensing. The auto manufacturer has announced four key investments and collaborations with Velodyne, SAIPS, Nirenberg Neuroscience LLC and Civil Maps in order to accelerate the badly needed research.
But Ford has also said that it isn’t aiming to be the first. Instead, it wants to be the most trusted. Considering that many consumers remain skeptical of a driverless future, that may just be its boldest move yet.
Article written by Anthony Arnold. Anthony is an car engine expert and has years of experience in automotive industry. Currently he works for Engine Trust, a reconditioned and used engine finder in UK.