Ford commits $4bn to autonomous vehicles, forms new subsidiary

Detroit, Michigan — Ford Motor Co. is planning to invest up to $4 billion (€3.4 billion) on autonomous-vehicle (AV) development through 2023, a portion of which will be used to start up Ford Autonomous Vehicles LLC, a subsidiary devoted to those efforts.

The new subsidiary will be based primarily at the campus Ford is creating in Detroit's Corktown neighbourhood and will be led by Sherif Marakby, a Ford vice president who spent a year heading Uber Technologies Inc.'s autonomous-vehicle program before rejoining Ford in 2017.

The new LLC will be the entity charged with fulfilling Ford's promise to launch a self-driving commercial vehicle at scale in 2021. It includes the auto maker's self-driving systems integration, autonomous vehicle research and advanced engineering, AV transportation-as-a-service network development, user experience, business strategy and business development teams.

"Ford has made tremendous progress across the self driving value chain — from technology development to business model innovation to user experience," Ford CEO Jim Hackett said.

"Now is the right time to consolidate our autonomous driving platform into one team to best position the business for the opportunities ahead."

Ford shares rose after the announcement 24 July, closing at $10.57 in New York.

The $4 billion in AV spending includes $1 billion that Ford has committed to investing in Argo AI, a Pittsburgh startup that has become its partner in self-driving system development.

Ford Autonomous Vehicles will hold the ownership stake in Argo AI that Ford received in exchange.

The subsidiary is set up to take on other third-party investment and will be separate from Ford's Smart Mobility LLC, which handles new business opportunities such as its Chariot shuttles.

Marakby, Ford's vice president for autonomous vehicles and electrification, will be CEO for the AV unit.

"The evolution of computing power and IT have helped bring great products to customers — from cars to tablets," Hackett said. "We can now harness this technology to unlock a new world of vehicle personalisation, supply chain choreography and inventory leanness that rivals any industrial model in the world — and Joe's challenge is to help us redesign this system to do just that — while better serving customers and dealers and improving our overall fitness."

The announcement follows Ford's recent purchase of Detroit's vacant Michigan Central Station, a century-old office tower it plans to convert into the hub of an urban campus dedicated to work on autonomous and electric vehicles. Ford opened an office near the depot earlier this year for about 200 employees that are part of Team Edison.