Ford-VW could rank among AV leaders

DETROIT — A potential autonomous-vehicle partnership between Ford Motor Co. and Volkswagen Group would cement the pair as leaders and validate Ford's under-the-radar efforts in the uncertain market.

VW CEO Herbert Diess this month confirmed the two sides are nearing a deal on robocar development, telling a group of company executives talks are "progressing well." In February, Diess praised Ford as "one of the pioneers on autonomous."

The partnership is likely to include an investment in Ford affiliate Argo AI, and a deal could be announced as early as July, Bloomberg reported.

Although details remained unclear, experts say a deal would enable Ford and VW to scale the technology more quickly and secure footholds in markets around the world. An investment by a second major automaker would help Argo continue its high-cost development.

As a sign of its intentions, VW split with its former autonomous-vehicle partner, Aurora Innovation, a startup founded by an all-star cast including former Google engineer Chris Urmson and former Tesla Autopilot program director Sterling Anderson.

"It's a vote of confidence in the work the team at Argo is doing," Sam Abuelsamid, a principal research analyst at Navigant Research, told Automotive News. "They see it as being further along and closer to being production-ready than what they were seeing from Aurora."

A partnership would continue a trend of rivals teaming up in the self-driving market. Honda Motor Co. last year said it would invest $2.75 billion in General Motors' Cruise autonomous-vehicle unit, and Waymo last week teamed with Renault Group and Nissan Motor Co.

"They'd make a formidable team," Abuelsamid said of Ford and VW.

Argo, headquartered in Pittsburgh, has been methodical in its approach to developing and testing autonomous vehicles since Ford in 2017 said it would invest $1 billion in the startup over five years. Argo's goals, much like Ford's, revolve around safety and a clear, human-centered design.

"I think we're still in horse-and-carriage days of AVs," Argo CEO Bryan Salesky said during a presentation last month in Los Angeles. "I'm extremely bullish about the future, but we all have to sort of be true to a vision and be sure we're doing this in the right way. We all have to be honest with folks about how quickly this can get out there. Otherwise we're going to increase expectations and it's going to hurt us in the long run."

Although Ford and Argo have been perceived as laggards in the market compared with GM and Waymo, they have been working to launch a Level 4 autonomous vehicle at scale for commercial purposes in 2021.

"Argo is a company that's very committed to developing a really safe, robust system that can work in different conditions," Abuelsamid said. "They're getting a lot of experience in different environments."

Argo this month said it would begin testing in Detroit, its fifth U.S. market. It also tests in Pittsburgh, Miami, Washington and Palo Alto, Calif.

Abuelsamid said Ford is probably not worried about sharing with VW proprietary technology that it has been developing with Argo.

"It's going to be difficult to get product differentiation in AV driving systems; they're ultimately probably going to feel all the same," he said. "Giving some of that proprietary ownership to VW, I think, is less of a threat from a product standpoint, and it gives Ford the ability to spread out the cost and leverage some scale sooner than they would on their own."