Tesla Under Review for Crashes, Ford’s Argo Shuts Down as Self-Driving Cars Face Tougher Future

Uh Oh. Usually, anything Elon Musk got involved in turned into gold. He just seemed to have the magic touch. However, that magic may be running short these days according to a new piece from yahoo.finance.com.

First came news in Ford’s (F) Q3 earnings report that the automaker was shutting down its Argo AI autonomous driving joint venture. Ford said it would be taking a $2.7 billion non-cash, pretax impairment on its investment in Argo AI, with engineers and other employees being absorbed by Ford and its Argo AI partner, Volkswagen. Volkswagen said it would take a $1.9 billion charge from the winding down of Argo.

Then Reuters reported that the Justice Department began a criminal probe last year looking into several crashes involving Tesla’s Autopilot driver assistance system, which was activated during those accidents, and whether Tesla made fraudulent claims about its driver assistance technology’s capabilities.

While Waymo and Tesla have been testing and authorizing driverless transportation in Phoenix and a few other cities, their promise has fallen short of expectations.

Argo AI and Tesla were both pursuing the goal of Level 4 and Level 5 driving automation — while using different strategies to get there. Argo AI worked with authorities and stakeholders like cyclists and pedestrian safety organizations to help shape its product, whereas Tesla made its users and even the open roads of the U.S. its beta testing playground.

In any case, “it’s become clear it’s going to take longer than what investors really wanted to hear,” Philip Koopman, Carnegie Mellon associate professor and self-driving expert, told Yahoo Finance.

The National Transportation Safety Board released this image of a 2021 Tesla Model 3 Long Range Dual Motor electric car that was involved in a fatal accident near Miami that killed two people on Sept. 13, 2021. Tesla upgraded the automated driving system in February 2022.

Big valuations, bigger losses

The promise of autonomous vehicles has had all of us excited to some level. I mean it just makes sense. However, it is a difficult goal to reach. About $75 billion has been invested in developing autonomous technology, but there’s little to show for it.UBS had predicted a $2.8 trillion market by 2030, but had failed to factor in the technological and policy issues.

“[Self-driving startup] Waymo is not at the mercy of an OEM (original equipment manufacturer); Google [Waymo’s owner] can afford to make a 10-year bet, and the OEM’s just may not be comfortable with that kind of burn rate on that kind of timeframe, ” Koopman says. ”[GM-owned] Cruise is going to depend on how much patience GM has.”

Patience, investment and faith will be required to overcome the pitfalls, according to the article. Musk remains confident Tesla will prevail.

“You’re going to have no one in the car by the end of this year,” Musk said on the company’s most recent earnings call. “And certainly, without a question, that’s whatever is in my mind next year,” he said. “I think we’ll also have an update next year to be able to show to regulators that the [self-driving] car is safer, much so than the average human.

After sinking $44 billion—almost twice its valuation—into Twitter, however, one would be excused for having less confidence in his judgment than when he first launched the company.

read more at yahoo.com