Ford spins its driverless car division out into an entirely new company

Vaughn Highfield July 25, 2018

Self-driving cars are clearly the future and every automaker under the sun is invested in making that future come to fruition in some shape or form. After a period of experimentation in-house, Ford has decided that the next step to making driverless cars a reality is to spin off its internal research division into an entirely new company – the inventively named Autonomous Vehicles LLC.

By breaking out into Autonomous Vehicles LLC, Ford can now focus on accelerating the growth of its driverless technology. Ford is also pushing all of its AV research and the self-driving car network is planned for 2021 to Autonomous Vehicles LLC. You can think of it as a direct competitor to Alphabet’s Waymo and General Motors’ GM Cruise companies.

The new company will set Ford back a cool $4 billion (£3 billion) from now until 2023, including the $1 billion (£760 million) it spent on buying self-driving startup Argo AI in 2017. Interestingly, Ford doesn’t see itself being the only investor into Autonomous Vehicles LLC as it envisions third-party investment and partnerships being a viable option.

According to Reuters, Ford actually felt now was the time to spin out its driverless tech division into a separate company because executives believe that the self-driving vehicle industry will be dominated by just a handful of major players. Interestingly, these players may not even be traditional automakers and so Ford wants to rise up and take that space before too many other well-funded players jump into the space. By forming a spin-off company, it means that Ford’s engineers and developers can really focus on autonomous vehicle development properly.

In a statement to Reuters, Ford CEO Jim Hackett explained the decision, saying “Ford has made tremendous progress across the self-driving value chain – from technology development to business model innovation to user experience. Now is the right time to consolidate our autonomous driving platform into one team to best position the business for the opportunities ahead.”

Looking at the landscape of autonomous vehicle companies out there right now it’s clear to see why Ford believes it’ll be a space owned by just a handful of companies. At the moment both Bosch and Nvidia are dominating the market in terms of technologies, providing the sensor arrays manufacturers need alongside the software, hardware and intelligence needed to make a car drive itself.

If Ford doesn’t get involved to start creating its own vehicle fleet, it could easily be left behind as other manufacturers leap in to fill the gap with a more off-the-shelf solution.