Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Ford and the Future: Where the Legacy Automaker Stands in the Race for a Driverless Car

The promise of the self-driving car has been a long time coming. While fully autonomous vehicles have yet to take over the roadways of the world, almost 50 different companies are working to make it a reality.

Some are automakers you’ve heard of – Volvo, Mercedes-Benz, BMW, Toyota, General Motors, and Tesla.

Others include equally well-known tech giants, such as Alphabet’s (parent company of Google) Waymo division, Samsung subsidiary HARMAN (in conjunction with Swiss automaker Rinspeed), and both Apple and Amazon.

Foreign multinationals are also big players. China’s Huawei (in a partnership with Audi) and Canadian auto supplier Magna are just two of the global companies with a stake in driverless technology.

An Old Player in a New Arena

Then there are the efforts of the original US automaker: Ford (NYSE:F).

There have been countless reports of Ford’s demise in recent years, but the company continues to make inroads in the self-driving segment – even as some of their other divisions face severe cuts.

Amid such turmoil and reorganization, where exactly does Ford stand today as it relates to self-driving technology?  Are they in a position to compete with those much farther ahead?

As it turns out, the answers run closer to what is actually happening within the world of self-driving technology, as opposed to the massive push of positive marketing found in much of the press.

Ford’s initial approach and commitment to the effort were to take it slow.

To Ford’s credit, they’ve followed through on that promise, even as others have taken the lead in autonomy since that initial demonstration in 2016.

Waymo has already driven its 10 millionth self-driving mile. GM’s Cruise program is looking to double its autonomous workforce in an effort to get its robotaxi service up and running by the end of the year.

Ford, however, has not sat idly by on the sidelines

Flying somewhat under the radar, they have made inroads with their tech (integrated within Ford Fusions) and are quietly closing in on their originally stated goal of a fleet of level 4 autonomous and commercially viable vehicles by 2021.

A Bold (and Profitable) Goal

By current technology standards, that is two very short years away, but it does fall in line with most others working in the AI auto business who also seek to achieve level 4 autonomy.

To understand precisely what level 4 autonomy means for a self-driving car, here’s a quick summary of five levels of automobile autonomy:

  • Level 0 equals no autonomy, and Level 1 is bare minimum assistance – adaptive cruise control and lane warning tech. Ultimately, how the car functions and drives are dependent on the driver.
  • Level 2 is what we see in most of the modern cars of today – assistance with steering, acceleration, braking or several systems working together. The driver remains in total control.
  • The jump to level 3 is enormous. With level 3, a car could operate, driver-free, in a straightforward environment – interstates for example. The driver still needs to take in more complex situations.
  • Level 4 is full automation but in a highly controlled environment – think predetermined routes or pre-set speed limits or geofencing to contain the vehicles to a predefined area. Pedals and steering wheels may or may not be present, and only in highly specific instances would a human be called upon to take control.
  • Level 5, is the summit of self-driving, and what every sci-fi film of the past five decades has promised drivers: no steering wheels, no pedals, just pure AI. Waymo is making a push to get there first, but mass-produced, fully self-driving vehicles for both commercial and non-commercial use is still at least a decade away.

Which leaves most companies to aim for level 4.

Ford and Level 4 Automobile Autonomy

Ford’s ascent to achieving level 4 may not be as publicized or as flashy as some others.  However, they have taken significant steps to show just how serious they are in realizing their vision.

First, the automaker is promising to invest $4 billion in self-driving vehicles over the next four years – through at least 2023. Part of the spend involved putting $1 billion into Pittsburgh-based startup Argo AI back in 2017.

Two years later and Ford is in preliminary talks with Volkswagen to add an additional $1.7 billion to Argo’s development efforts. It’s a significant outlay of funds for the German automaker and strong backing for both Ford and an obscure start-up.

How Argo AI could Help Ford Achieve Level 4 Auto Autonomy

Argo, however, is headed up by two veterans of the autonomous car chase. CEO Bryan Salesky, is a former director of Google’s autonomous efforts and President Peter Rander, previously headed up Uber’s self-driving division.

It shows that Ford is putting its money with experts in the field and is able to convince other major companies to do the same. The extra cash will help lower costs as the two companies leverage Argo’s virtual driver system and its high-definition mapping program.

Ford’s other, more recent investments in the autonomous marketplace include a an announcement that will see the automaker produce its self-driving vehicle at a plant in Michigan. In addition, they’ve pledged a further $900 million towards future manufacturing efforts in the state.

Ford’s Plan to Make Money from Autonomous Vehicles

Ford is also one of the few companies who’ve started that their outright goal is not altogether altruistic – they don’t care if they’re first, but they do want to make money.

Sherif Marakby, CEO of Ford’s autonomous vehicle division, summarizes Ford’s vision:

“We’re laser-focused on profitability. While the vehicle is expensive, initially we’re deploying it in service so the cost per mile for transportation for a person or a business is going to be lower and will be profitable for us.”

Slow and Steady

When compared to other driverless developers in the field, Ford was a late bloomer.

That delayed start, however, appears very much by design. Ford has made great strides to get where they are, but they continue to view a cautious, steady approach as an asset, not a hindrance.

To Ford’s credit, there might be something to be said for taking the long view.

According to Gallup, 75% of US drivers would favor non-autonomous cars even if the self-driving version were readily available. Another 52% claim they wouldn’t want to use autonomous vehicles at all.

Of course, as younger, more tech-savvy generations come of age, those numbers will change. Until then, the focus of self-driving cars remains the domain of ride-sharing and delivery, which is where Ford is currently aiming.

Down the line, they also want to bridge the gap between commercial and personal use, to help overcome the current population’s animosity. That means a focus on safety.

The full report, “A Matter of Trust” was sent to the US Department of Transportation.

As part of the report, Sherif Marakby, produced a letter the transportation secretary expanding on the company’s careful approach. In the letter, he noted:

“Developing self-driving vehicles is not simply about the technology  —  it is about earning the trust of our customers and of those cities and businesses that will ultimately use it. Safety, reliability and the experience the technology will enable are the key pillars to developing trust.”

Complex Cars, Complex Environments

Before reaching any level of profitability, Ford continues to stretch the viability of its driverless tech.

Ford was the first self-driving manufacturer to test at Mcity at the University of Michigan – including in the snow. After a decade in closed environments, the company is expanding its real-world testing into some non-traditional markets.

Moving beyond the typical trial runs that occur in self-driving hotbeds such as California and Arizona, Ford initially launched their first urban tests in Detroit and Argo’s home base of Pittsburgh. Now though, they are running their autonomous Fusions into far more complex cityscapes.

Map-building drives are occurring in Washington DC and journalists are getting a taste of Ford’s efforts in the maze that is Miami.

Miami is a particularly bold choice in contrast to the static, navigable southwest or tech-centric city of San Francisco. It shows confidence in Ford’s current autonomous package and reflects just how far they’ve come in developing the tech.

As if testing wasn’t enough, Ford is looking even further ahead to ensure immediate usability for their efforts. Current partnerships in Miami include Domino’s Pizza and Postmates delivery service.

If the trails with both companies go well, it will translate into using incredibly advanced technology for incredibly practical applications, and put them near the top in the push for driverless vehicles.

The Reality of the Self-Driving Vehicle

Even as testing expands, and the further administration of the first few years of autonomy come into view, Ford – along with many other self-driving hopefuls – are recognizing the current limits of autonomous vehicles.

CEO Jim Hackett recently provided insight into Ford’s immediate outlook:

“We overestimated the arrival of autonomous vehicles…its applications will be narrow, what we call geo-fenced, because the problem is so complex.”

Ford’s bid for the 2021 level 4 autonomy has not changed though, with Hackett adding:

“When we bring this thing to market, it’s going to be really powerful. There’s probably going to be alliance partners that we haven’t announced yet that will make it more certain that we don’t take on all the risks ourselves financially.”

That might sound like brake tapping on expectations, but it fits well with Ford’s low risk, high reward approach.

It also hints at the future of autonomous vehicles, while still very much uncertain, is also wide open. It may not be today. It may not be tomorrow. But driverless vehicles will one day find a home in garages across the country.

If their current efforts are any indication, there’s little doubt a self-driving Ford will be among them.