To Invest or Not, That is the Question

In 2016, then CEO of Ford Mark Fields, claimed that Ford would be selling fully autonomous vehicles in five years. That was six years ago, and it obviously hasn’t happened. Current CEO Jim Farley recently pulled out of Argo, as has Volkswagen, and has no immediate aim to produce or work on level 5 autonomy inhouse.

The aim, it appears, is to focus on current products and improving driver centred features in their level 2 and 3 systems. Chris Thomas, the co-founder of the venture capital firm Assembly Ventures, thinks this might mean short-term gains but a long-term risk. He said, “We’re going to have autonomous and self-driving systems that are broadly deployed across logistics and personal mobility use cases and [they] will unlock immense value for society and create immense value for everyone who is actually in the arena.” If Ford steps out of the race now, they will have no place at the table, in other words.

However, in uncertain economic times, with a continually sliding level 5 goal post, Ford seems to be betting on focusing on more immediate problems. Their bet might pay-off, especially if the consumer remains focused on vehicles that they can control and drive.

Personal Comment:

As I see it Ford’s decision is one that all companies face in one way or another. It’s a question of investment. Investing in a potential future, in this case self-driving vehicles, is inherently risky and uncertain. The further into the future the result of the investment is the more costly because the company must support itself while it waits for that investment to return.  

As the article points out some have hyped the nearly utopian future they see in autonomous vehicles: seeing nothing but positives and huge profits just around the corner. But when do you pull the plug, and say that the investment isn’t worth continuing? For Ford that time was recently when the shuttered Argo. If they are correct that level 5 is at least five years away, then they might save their money while investing in more immediately profitable things. Muddying the waters is the ambiguity around level 5. The engineering focused SAE definition points to the ability of the vehicle to go from A to B “everywhere and in all conditions”. But this can’t possibly mean absolutely everywhere and in absolutely any condition. Vehicles can’t drive through extreme weather like tornadoes or forest fires, and besides, humans can’t drive everywhere and in all conditions. If level 5 is to mean anything this 'everywhere and in all conditions' must have some qualifications, but which ones?

Common to many hype cycles autonomy appears to be entering a lull. Ford, along with other OEMs, must navigate that space while staying profitable. Real-world benefits of the massive investment in self-driving are already present, but they are very far from utopic societal changing ones.

Written by Joshua Bronson,
RISE Mobility & Systems