Ford to make autonomous cars for ride-hailing, ride-sharing by 2021
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August 16, 2016 01:00 AM

Ford to make autonomous cars for ride-hailing, ride-sharing by 2021

Automaker plans to double Silicon Valley staff, makes $75 million investment in lidar

Nick Bunkley
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    CEO Mark Fields: "Ford is going to be mass-producing vehicles with full autonomy in five years."

    In Ep. 3 of Season 1 of “Futurismo,” Automotive News' new podcast series about the next quarter century in the auto industry, we take a test drive in one of Ford's shuttle vans optimized for mobility. We also talk to experts about the gold rush to pick up mobility startups, and see how these companies and carmakers can collaborate in the coming third age of car-sharing.

    Ford Motor Co. today said it plans to introduce an autonomous vehicle by 2021 for use in a ride-hailing or ride-sharing service.

    Ford said the vehicle would be “specifically designed for commercial mobility services” and built in high volumes.

    “Ford is going to be mass-producing vehicles with full autonomy in five years,” CEO Mark Fields said at an event in Silicon Valley that was broadcast online. “There’s going to be no steering wheel, there’s not going to be a gas pedal, there’s not going to be a brake pedal and of course a driver is not going to be required.”

    To help accomplish that goal, Ford said it is investing in Velodyne, a company that makes lidar sensors used to detect objects around a vehicle, and Civil Maps, which has developed a more efficient 3-D mapping technology. Ford and Chinese search engine giant Baidu Inc. are investing $75 million each into Velodyne. 

    Ford also said it has acquired an Israel-based company called SAIPS, which helps vehicles learn and adapt to their surroundings, and reached an exclusive licensing agreement with a “machine vision” company called Nirenberg Neuroscience.

    Ford said it is doubling the size of its work force in Silicon Valley to 260 people by the end of next year and increasing its office space there from one 30,000-square-foot building to three buildings totaling 180,000 square feet.

    The news didn't boost Ford shares, which fell 0.7 percent to close today at $12.34. 

    Differing from GM, Tesla

    Fields said Ford’s first autonomous vehicle would meet what’s known as Level 4 autonomy under a scale developed by SAE International that ranges from 0 to 5. By jumping immediately to Level 4 -- one step below complete autonomy in all driving environments (see graphic) -- and eliminating the steering wheel and pedals, Ford’s strategy differs from how General Motors and Tesla are rolling out the technology.

    Within a year, GM plans to introduce a fleet of autonomous Chevrolet Bolts to be tested by the Lyft ride-hailing service it partially owns. Tesla has taken incremental steps toward autonomy, most recently with a feature it calls Autopilot, but several recent crashes have raised concerns about the technology and about whether drivers misunderstood their need to continue paying attention and take over control of the vehicle.

    “We abandoned the stepping-stone approach of driver-assist technologies,” said Raj Nair, Ford’s product development chief, “and decided we were going to take the full leap to deliver a fully autonomous, Level 4 capable vehicle.”

    Nair said he doesn’t expect autonomous vehicles to be available to individual consumers for “several years after their first introduction because the economics simply don’t make sense.” But he said they can spread quickly among ride-hailing services by cutting the labor costs and commissions they have to pay.

    Fields said he expects autonomous vehicles to change society as much as company founder Henry Ford’s assembly line did more than a century ago.

    Said Fields: “This is a transformational moment in our industry, and it is a transformational moment in our company.” 

    Lacking specifics

    Ford’s plan lacks specifics of how it will make this great leap, said Michelle Krebs, senior analyst for researcher Autotrader. 

    “I’m not seeing all the pieces of the puzzle in place because they don’t have a relationship with a ride hailing service like Uber or Lyft," Krebs said. "It’s a first step and at least Wall Street will see that they’re working on this.”

    Morgan Hill, Calif.-based Velodyne said the investment from Ford and Baidu will help it improve design and expand production, making the sensors more affordable for mass adoption. Lidar bounces light off objects to assess shape and location, giving self-driving cars a 360-degree view of their environment with the help of cameras and traditional radar.

    “They want to do as much as they can internally, but also acknowledge that it’s best to partner with those who have the leading technology,” Jeff Schuster, an analyst at research firm LMC Automotive, said of Ford.

    GM spent almost $1 billion acquiring self-driving software maker Cruise Automation and invested $500 million for a 9 percent stake in ride-hailing company Lyft Inc. Fiat Chrysler Automobiles NV has teamed with Google to develop 100 self-driving minivans. Ford conducted unsuccessful negotiations with Google prior to the Chrysler deal.

    GM acquisitions

    Since GM announced its acquisition of Cruise Automation in March, the staff at the company has grown to 100 from 40, said Kevin Kelly, a GM spokesman. GM is testing Cruise’s self-driving software on Chevy Bolt electric cars in Scottsdale, Arizona. GM also has a research lab in Palo Alto that employs about 12 people, Kelly said. 

    “Our goal is to use our autonomous technology in an on-demand ride-sharing network,” Kelly said. “Cruise paired perfectly with Lyft.”

    Velodyne said it “expects an exponential increase in lidar sensor deployments” and that it will continue to work with top automotive and ride-sharing companies worldwide.

    “We want the cost to be low enough to be used for all cars,” Marta Hall, Velodyne’s president of business development, said in the statement.

    Bloomberg contributed to this report.

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