Here’s Why Argo AI Is Shutting Down

• Argo AI, an autonomous startup backed by Volkswagen and Ford, shuts down amid mounting losses.

• Argo AI would have provided the software behind Volkswagen's planned MOIA ride-pooling service in Germany.
  

• Volkswagen's Level 3 driver-assist technology is expected to be folded into Ford's research and development base.
  

Autonomous tech developer Argo AI, backed by Volkswagen and Ford, is shutting down, with some parts of the company expected to be absorbed into the two automakers. The start-up had been engaged in research and development of driver-assist systems as well as Level 4 autonomous driving technology since 2016.

The decision is seen as being tied to growing losses for its two main automotive backers at a precarious time in the industry, collectively amounting to billions, as well as persisting uncertainty regarding the timeline for the commercial arrival of Level 4 technology. In many ways this uncertainty applies to all leading autonomous vehicle developers, including those that have fielded Level 4 vehicles on limited scales, but this doesn't make the continued expenditures any less significant. This uncertainty extends both to the underlying technologies as well as the regulatory environment in the US and elsewhere when it comes to commercializing Level 4 technology.

"During the quarter, Ford concluded that the auto industry’s large-scale profitable commercialization of Level 4 advanced driver-assistance systems will be further out than originally anticipated—but development and customer enthusiasm for benefits of L2+ and L3 ADAS warrant dialing up the company’s near-term aspirations and commitment in those areas," Ford said in announcing its third-quarter results.

Ford said it is moving its capital spending away from Level 4 technology in favor of Level 2 and Level 3 tech developed in-house. The automaker also noted that Argo AI had been unable to secure new outside investors to continue operations.