The American autonomous driving startup company - Argo.ai, which was invested jointly by Ford and Volkswagen, has been confirmed to shut down. This company that had been established for 6 years and had once been called an elite unicorn company, has always been one of the leaders of autonomous driving technology in the past few years. However, due to continuous deficit reports and the lack of external funding, plus the uncertain timetable of the commercialization of the L4/L5 autonomous driving technology, the parent company – Ford, decided jointly with Volkswagen to shut down Argo.ai and then recruit some employees to develop L2+ and L3 driver assistance systems on their own. This incident not only impacted the autonomous driving technology industry, but also shown the common predicament encountered by the development of autonomous driving at this moment, which is stuck in the middle. I had been focused in the development of global autonomous driving technology in the past few years, and this is the most worrying moment so far. Certainly, to view from the shutting down of Argo.ai, I assumed that there are actually more strategic thinking of operation for the two major carmakers that had invested…
- VAG replaced with the new CEO Oliver Blume in this September. Facing the challenges of the era of
BEVs in the future, this CEO bring up action plans frequently since taking the position; In addition to the establishment of a joint-venture company with the Chinese autonomous driving startup company – Horizon Robotics to catch up the progress of autonomous driving technology and L2+ technology recently, a month later, VAG immediately decided to “grasp the nettle” to break up with Argo.ai (and Ford, of course) that the progress of R&D is below expectation. Furthermore, Blume also announced to visit China with the enterprises visiting group led by the German Prime Minister in early November. Regarding these consecutive events, VAG will be obviously inclined to China market; Although the USA market is also very important, the Inflation Reduction Act passed by their government recently will bring more limitation and unfair treatment to foreign carmakers in the operation of BEV industry in the future. This will also influence the will of continuous support to local automotive new technologies from foreign funding.
- Ford will retreat from the competition of autonomous driving in the short run after trying to quit the operation of Argo.ai then immediately losing the support for Argo.ai from Volkswagen, and it will be difficult for them to own an autonomous driving technology company like GM’s Cruise in the future. Formerly, Ford had a good relation with the ex-CEO of VAG that even acquired the right to utilize the MEB platform to develop new car models. After 2025, the development of the all-new SSP platform of VAG will be completed, so the MEB will be then the old generation of BEV technology at that moment, and Ford must develop new platform on their own obviously. The beautiful vision of the cooperation between the two major carmakers from Germany and USA has vanished by now.
Anyway, how should the current leaders of autonomous driving technology – Waymo, Baidu, Aurora, Cruise, Motional, AutoX, and Mobileye keep going in the long path before the commercialization of the upcoming technologies? Recalling back in 2016, it can be regarded as the heyday of the emerging and skyrocketing of the development of autonomous driving technology; however, after the “cash-burning” R&D works for many years, it’s said that Aurora plans to seek the will of the acquirement of Microsoft or Apple; Mobileye faces the continuous drop of the estimated market cap recently even with the support of their parent company - Intel. So what about the other major IT companies? I have two points of view…
- As the cash-burning R&D works might keep going until 2030 at least, the application scenarios of the technology should begin mass production in several phases within this time period (e.g., autonomous parking in parking lots). The key point is that they must find carmakers that are willing to cooperate (not just fleets of car rental companies) to expand the economic scale, so that consumers could get used to autonomous driving step by step.
- To develop autonomous driving vehicles that only carry goods but not people as soon as possible. Because the requirements of technology details won’t be off the charts (e.g., the smoothness of acceleration/deceleration, the demands of constantly lane changing) if the vehicles don’t carry people, so that the timetable of mass production might be pulled ahead, and it can significantly reduce the operational cost of the logistic companies that the business model will then be relatively feasible. The application of this technology must also need the support by the governments’ traffic laws, otherwise there will be derived issues of the controversies in accidents, etc.,
Even though autonomous driving technology companies gradually began cooperation with major cities for pilot runs of Robotaxis in recent years, however, in the situation that the technology isn’t complete yet, I don’t assume that it can make consumers satisfied then recognize the autonomous driving technology by this fast pace. Different from the application of BEVs, the autonomous driving technology is critical to the driving safety, and it’s about the mental consideration of car-users, and it’s the revolution of the definition of mobility, therefore we must be cautious to realize it step by step. In the path of the development of autonomous driving technology, not only the financial strengths but also the ability of the mid-term/long-term business planning could make it work.