One of America’s oldest car companies is looking to make a billion-dollar investment on autonomous vehicle technology, hoping that owning a car would not be needed anymore. For the next five years, Ford invested in an artificial intelligence start-up called Argo AI as their subordinate to focus mainly on developing these autonomous vehicles. Self-driving cars are something that companies are looking forward to developing in order to create a faster and cheaper way of daily transportation. With this investment, Ford looks forward to not just being able to manufacture cars, but also to provide a better “mobility service”, making it possible for people to get places without owning vehicles.
Many robotics and engineering professionals have come from big companies to work for Argo AI in creating this new technology. Seeing that autonomous cars is something the public has been looking forward too, companies like General Motors, Uber and Google are probably going to be competing against each other to make these vehicles part of an everyday lifestyle. Recently, General Motors made a rather large investment in this field, investing $500 million in Ubers main competition, Lyft. This poses a threat to Ford’s new investment. Ford hopes to increase revenue with this new venture, however this may be difficult given their competitors. Uber and Lyft have already posed a threat to cab companies around the country. Those living in large cities have opted out of owning cars due to the convenience of public transportation and these companies’ inexpensive forms of transportation. Additionally, General Motors is a very established and highly trusted company, which could cause less people to favor Ford when investing. Furthermore, Google has been on the forefront of technological developments, and it is no different when looking at cars. Google has invested large sums of money into this field. Because they have a head start on Ford in this field, Ford is less likely to develop as high quality of a product.
That being said, this is a questionable investment for Ford. While it is a smart decision for them as a company to advance in the technological side of things, this could also be a waste of money for them. They are not known as a company who creates the most up-to-date products as compared to companies such as: Kia, Tesla, Mercedes and Audi. They face a great amount of competition entering this line of investment. What would be a smart choice for Ford, would be to partner with another company, such as General Motors, to work together towards creating this technology. This way, they would not be in competition with another company, and they would have more funding towards this investment. This would allow them to be more likely to create a product that is on the same level as Google’s potentially will be. All in all, Ford should reassess their investment and consider new ways to become competitive in this industry.