Optimism about the limits of self-driving cars is turning into a trickier question about how expensive car artificial intelligence will benefit, Reuters reported. These are the questions of Argo AI’s founders and car manufacturer partners Ford Motor Co. and Volkswagen Ag.
Instead of building self-driving fleets, they are looking to get paid for the mileage of self-driving vehicles that customers use to transport goods or passengers for a variety of purposes.
The self-driving system developer, led by Bryan Salesky, began developing self-driving cars for a Defense Department-sponsored competition 12 years ago, and its auto giant partners are betting billions of dollars that self-driving car technology will be essential, not just to replace taxi drivers.
“I hate the word robotaxi,” Salesky said in a rare interview at Argo’s Pittsburgh headquarters. There are too many applications and businesses to build, and (trying to) understand which applications and businesses are more profitable than others. “
Argo’s business plan hinges on a unique revenue-sharing agreement that will pay Argo based on miles driven by self-driving Ford and Volkswagen with Argo technology. Details of the arrangement have not been previously reported.
Argo’s financial structure is also different from that of rival self-driving car companies. Ford and VW each own less than 40 per cent, while Argo’s management team owns only about 20 per cent, according to sources familiar with the business. Details of the ownership structure have not been reported before.
Potential commercial applications of Argo technology include long-distance freight, e-commerce delivery, personnel transport along fixed urban routes, and off-highway applications such as mining.
Argo was founded in Pittsburgh in late 2016 by Salesky, a Michigan native, and Peter Rander, chief operating officer, in a modest building on The Strip. Argo’s main competitors initially focused on deploying robotaxis. Waymo chief executive John Krafcik said Waymo was now working to adapt its automatic “drivers” to commercial vehicles, including Class 8 trucks.
Argo’s plan is to provide for The Self-Driving System that Ford will launch in three U.S. cities in the second half of 2021, possibly using compact vehicles based on the redesigned Ford Transit Connect.
VW executives told Reuters they expect to launch an all-electric vehicle designed by VOLKSWAGEN in 2022 or 2023, which would initially be used by the German carmaker’s Moia ride service.
Jim Farley, a Ford executive, told a conference in Detroit in November that the U.S.-ranked carmaker was working on argo technology’s applications that were “more meaningful than robotaxis”, including automatically providing materials to people who trade through subscription services.
In addition to deploying Argo-equipped vehicles in its fleet of rides, VW has purchased argo-equipped vehicles from other ride and transportation companies, said Thomas Sedran, head of commercial vehicles at Volkswagen. For Argo and its partners, this could be another way to make money, as the technology is increasingly applied to more vehicles, with multiple miles traveled.
“The details, the specifics, the amount of cents we’re talking about per mile, or what the share of earnings are still not yet determined,” Sedran said. “At this stage, we’re still trying to generate revenue for the technology. “
Salesky says Argo’s self-driving technology can be adapted to vehicles of all types, sizes and applications: “It will be a multi-stage process with many different platforms and potentially different businesses. “Some competitors don’t believe Argo has any advantage.
“We’re not starting from scratch,” said Glen De Vos, Aptiv’s chief technology officer. Aptiv enhances its expertise by acquiring self-driving start-ups nuTonomy and Ottomatika. De Vos pointed to Aptiv’s partnership with Lyft to test self-driving cars in the latter’s Las Vegas ride-hailing network, and said Argo “doesn’t have the component engineering capabilities aptiv has.” “
So far, investors have valued Argo less than its rivals. Waymo is valued at $105 billion, compared with $19 billion for Cruise in the last round of financing.
After receiving a $1.9 billion investment from Volkswagen, Argo’s valuation was about $7.25 billion, on par with the $7.25 billion valuation of Uber Technologies’ self-driving division, Advanced Technologies Group.
Salesky said he and Rander are willing to bring other investor partners into the business: “The more diversity the better – but it needs to complement the portfolios we’ve built with Ford and Volkswagen.” “But we know it was early days,” he added. “The ‘game’ hasn’t really started yet. “