Ford said Wednesday that it is disbanding Argo AI, an autonomous vehicle company that it co-owns with Volkswagen.
Executives said they don’t see a path to profitability on fully autonomous vehicles, and will now focus on partially automated driver-assist systems, which need to be monitored by humans, AP reports.
Ford took a $2.7 billion accounting charge to reduce the value of its investment in Pittsburgh-based Argo, and it’s writing off a cash investment of about $500 million. Due largely to the noncash accounting charge, Ford reported a net loss of $827 million from July through September.
Ford said it and Volkswagen would hire many of Argo’s 2,000 employees and some of its offices would remain open.
The Dearborn, Michigan-based automaker said in a news release that it determined large-scale commercialization of self-driving vehicles will take longer than it expected. Yet customer enthusiasm for driver-assist systems warranted additional commitment of capital. Ford also said Argo had been unable to attract more investors.
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