Ford decided it needed to invest in driver-assistance technology that was more achievable in the near term rather than Argo’s goal for driving with little human interaction, the automaker said in a statement.
"Profitable, fully autonomous vehicles at scale are a long way off and we won’t necessarily have to create that technology ourselves," Ford CEO Jim Farley said in a statement Wednesday.
Ford’s decision led VW to walk away, too, according to people familiar with the matter.
"Especially in the development of future technologies, focus and speed count," VW Group CEO Oliver Blume said in a statement. "Our goal is to offer our customers the most powerful functions at the earliest possible time and to set up our development as cost-effectively as possible."
Ford and VW continue to cooperate on electric and commercial vehicles in the U.S. and Europe.
Ford Chief Financial Officer John Lawler said Wednesday that the company determined it would take more than five years to see a return on its investment in full self-driving. Farley said it also would require billions more in investment.
"It’s harder than putting a man on the moon" to create a robotaxi capable of navigating in a dense urban landscape, said Doug Field, Ford’s chief advanced product development and technology officer.
Ford will record a $2.7 billion non-cash, pretax impairment on the Argo AI investment. Argo AI was unable find other investors, Ford said. The automaker had backed Argo since 2017. The autonomous company had more than 2,000 workers as of July.
“Many of the employees will receive an opportunity to continue work on automated driving technology with either Ford or Volkswagen, while employment for others will unfortunately come to an end,” Argo AI said in a statement.
Started in 2016, Pittsburgh-based Argo AI was developing the technology behind driverless vehicles. It had raised at least $3.6 billion in investments, mainly from Ford and VW.