Self-driving cars: VW and Ford abandon robot car software company Argo AI

The Volkswagen Group and its US partner Ford are withdrawing from the joint project involving robot cars at the software company Argo AI.

Self-driving cars: VW and Ford abandon robot car software company Argo AI

The Volkswagen Group and its US partner Ford are withdrawing from the joint project involving robot cars at the software company Argo AI. The Wolfsburg-based company surprisingly announced that Volkswagen would no longer invest in Argo.

The US automaker Ford is going out of business directly and booked a write-down of 2.7 billion dollars, as it announced on Wednesday after the US stock market closed. This charge resulted in a net loss of $827 million in the third quarter.

The two partners previously each held 40 percent of Argo and agreed in 2019 on a broad-based joint development of the technology. VW intends to present a new partner for its robot taxis previously planned with Argo, which are still to be launched via the mobility subsidiary Moia in Hamburg in 2025. However, the company has not yet named it.

Development costly and risky

The development of technology for autonomous driving is expensive and also considered risky because the chances of success, including possible future profits, are unclear. With Ford's exit, Argo as a company should be history. According to US media reports, workers were informed on Wednesday that the Pittsburgh-based company would be closed. Volkswagen wants to offer employees to change positions.

“Focus and speed count, particularly when it comes to the development of future technologies,” said Volkswagen CEO Oliver Blume. "Our goal is to offer our customers the most powerful functions at the earliest possible time and to make our development as cost-efficient as possible."

Volkswagen entered the then Ford subsidiary in 2019 with an investment of over 2.6 billion US dollars. The investment was decided as part of a broader alliance with great ambitions. In addition to a billion dollars in funds, VW had also brought in its own subsidiary AID. By 2022, VW Ford was also supposed to buy further shares worth around 500 million dollars, that was the plan at the time.

Dampeners elsewhere too

With the end of the joint project with Ford, VW has to cope with another sensitive damper on its software ambitions. The group recently had to deal with problems at its group-owned software subsidiary Cariad, which is equipped with billions. There were delays in new software generations, which also resulted in the delayed launch of new car models.

The software problems are also considered a reason why ex-boss Herbert Diess had to resign. The end of the cooperation with Argo does not affect Ford's use of VW's own modular electric car system MEB. The cooperation between the car companies is based at the subsidiary VW Commercial Vehicles in Hanover, where vans are also jointly developed.

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