FILE – A Ford logo is seen on signage at Country Ford in Graham, N.C., on July 27, 2021. Ford is pulling out of its investment in Argo AI, an autonomous vehicle company that it jointly owns mainly with Volkswagen. The company said Wednesday, Oct. 26, 2022, in its third-quarter earnings materials that it is switching investment priorities from fully autonomous vehicles to advanced driver assist systems. (AP Photo/Gerry Broome, File)

 

DETROIT (AP) — Ford said Wednesday that it is disbanding Argo AI, an autonomous vehicle company that it jointly owns with Volkswagen.

Executives said they didn’t see a path toward turning a profit on fully autonomous vehicles, and it will now focus on partially automated driver-assist systems, which need to be monitored by humans.

Ford is taking 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 automaker based in Dearborn, Michigan, said in a news release that it determined large-scale commercialization of self-driving vehicles “will be further out than originally anticipated.” Yet customer enthusiasm for driver-assist systems warranted additional commitment of capital. Ford also said Argo had been unable to attract more investors.

“We’ve looked at this every way that you can,” Chief Financial Officer John Lawler told reporters Wednesday. “We just see the profitability, given the investment that’s going to be required, a long way out.”

Doug Field, Ford’s chief technology officer, said a breakthrough will be needed to make self-driving cars work, and then further advances would required before the vehicles could be deployed widely. Sensors on autonomous vehicles can’t be scaled to high volumes or price points that consumers can afford, Field said. The vehicles also require high-performance computers, he said.

“There’s a lot of work to not only just crack the technical problem, but then turn that into a high-volume reliable vehicle,” Field said.

Some Argo facilities will become Ford buildings, and many of the engineers and software developers will become part of Ford’s mission to develop better driver-assist systems, the company said.

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