These days, every automaker is in the midst of a metamorphosis, eager to emerge from their chrysalis as a “mobility company.” Even brands that don’t seem bent on completely revolutionizing their business model now use the term in reference to themselves.
Ford, which has positioned itself as a mobility company ever since Mark Fields was steering the ship, is among those pushing the narrative the strongest. Fields may have been fired for having a lofty, tech-focused vision that couldn’t charm investors, but much of it carried over to Jim Hackett’s tenure as CEO. Ford desperately wants to be seen as a cutting-edge nameplate.
However, the assumption among industry experts is that it’s lagging behind General Motors in terms of autonomous driving, electrification, and the ability to tap into alternative revenue streams. We sometimes wonder how accurate those assumptions are.
Let’s start with what we know. Ford has put quite a bit of its own money into advanced technologies. While it’s not quite the colossal sum amassed by GM and its investors, the Blue Oval still put over $1 billion into Argo AI alone and is seeking further help cutting costs and collaborating on AV and EV development. It’s also in the middle of building two new data centers it hopes can handle the expected 1,000 percent increase in digital traffic.
Despite this, Ford always appears to be a half step behind General Motors. The General is strongly pushing car connectedness and has already managed to monetize new services through its on-board Marketplace app. Data acquisition is the next piece of that puzzle, which GM also has a relatively clear business model for. But it’s the firm’s autonomous cars that get the most media attention.
Again, GM seems to be leading here. Ford doesn’t plan to launch a commercial business with autonomous vehicles until 2021. But General Motors has a lot of money riding on setting up its own autonomous taxi service before 2020. Meanwhile, Ford appears to be en route to everywhere its historic rival is, just a year or two later. But that’s not entirely fair, according to the CEO of Ford Autonomous Vehicles Sherif Marakby.
“If we wanted to launch 100 vehicles and call it a launch next year, we could do that,” Marakby told Automotive News. “I don’t think that’s what we want to do when we get to the complexity of getting to profitability. We think it requires considering the entire value chain, and understanding customers, to call it a launch. We’re talking launch at scale.”
It would be easy to chalk that up to an executive protecting the image of their company, but there’s a lot of truth in Markaby’s words. Ford’s pursuit of mobility as a business has been thorough and cautious. The company has tested numerous faux autonomous vehicles just to see how the general public would interact with them, while continuing tests of the real thing on both public roads and in relative isolation. It has also sought out partners for future business endeavors and rolled out numerous pilot programs of its own.
From Automotive News:
The company says it foresees a market worth $332 billion developing by 2026, in which ride-hailing revenues will account for $202 billion and delivery services valued at $130 billion. Along those lines, Ford hatched a partnership with Walmart on Wednesday in which the two companies will explore ways to collaborate on grocery delivery.
It’s not Ford’s first foray into delivery. It started testing pizza-delivery services using an autonomous vehicle with Domino’s Pizza in Ann Arbor, Mich., last year. More recently, it added a partnership with Postmates, a delivery platform, in Miami, through which Ford works with approximately 80 companies to provide autonomous delivery options. Those range from national companies such as Domino’s to local dry cleaners and florists.
The automaker also intends to equip 90 percent of its global fleet with modem connectivity by 2020, with a a pretty slick analytics suite under development for fleet managers. All the while, Ford Autonomous Vehicles will see billions more dumped into it through 2023.
These aren’t half-measures. Still, Ford remains worried that the public has confused caution with indecisiveness. “We are laser-focused on utilization and revenue, and that’s what we call launch at scale,” Marakby said. “Which I believe is different than what others are thinking.”
Ford appears to be working on how to make advanced technology profitable; other automakers leading the charge seem more interested in getting it to market to test the theory. In business, it’s hard to say which approach is better. But it’s similarly difficult to assess who’s really in the lead. We’re still of the mind that Ford is trailing GM and Waymo in terms of a deliverable product, but we’ve also learned that the latter two companies have encountered problems. Waymo suffered a few high profile crashes this year and locals complain that its test platforms are a regular annoyance on the road. Meanwhile, GM is alleged to be further behind in developing its Cruise AV than initially assumed.
“We’re going to work on building the future by building an autonomous-vehicle business,” Ford CEO Jim Hackett said on Wednesday. “That’s the center.”
That’s not a particularly unique strategy and maybe not any different from what General Motors is proposing. Perhaps it’s as simple as Ford being slightly behind the biggest of the Big Three in terms of development. Still, the company also has a lot of irons in the fire, more so than other automakers currently undergoing their own mobility transformations. Going in smart and probing every possible avenue isn’t stupid, if that is indeed what Ford is doing, but it’ll have to pull the trigger on something eventually. Otherwise, it could find itself having dumped billions into technology it never turned a profit from, upsetting a lot of already lukewarm investors in the process.