Ford recently announced plans to build a new plant in Michigan focused on building driverless cars. The investment is a major one for the automotive giant. The company is investing $50 million in the facility and, along with other initiatives, will create 900 new jobs.
The company’s goal is to have a fleet of driverless cars in production by installing self-driving technology into hybrids by 2021. The new plant will be part of an expansion of its Flat Rock assembly plant. The company aims to have up to 100,000 autonomous vehicles — with no accelerator, brake pedal or steering wheel — in the United States.
Why Is Ford Making This Move to Driverless Cars?
The Ford decision to invest in driverless cars is part of a broader strategy by the automaker. Ford is shifting away from passenger cars. The strategy change will mean more focus on SUVs, electric vehicles and hybrids. As reported in the Washington Post, Ford plans to invest $11.1 billion in battery-powered electric vehicles and plans to roll out 16 models for sale in 2022. The total investment in autonomous vehicles is reportedly $4 billion.
Is this Ford’s First Foray into Driverless Cars?
No. In 2018, Ford began a pilot program in Miami. There, it tested two model types. One is a self-driving car with hardware and software created by Argo AI, a Pittsburgh startup in which Ford is investing $1 billion. The second car type is an autonomous delivery vehicle. Ford is teaming with Domino’s, Postmates and Walmart, and partnered with a Miami florist and dry cleaner, to test using these.
Why Build a New Plant Instead of Retrofitting an Old One?
Retrofitting is an expensive process. For a new automobile type such as self-driving vehicles, the assembly plant has to be laid out differently. Automation improvements also require different technologies and configurations.
Are There Competitors in the Driverless Cars Market?
Ford is definitely not alone in the pursuit of driverless cars. GM, Uber and Google’s Waymo are all in pursuit of driverless vehicles. Tesla has also invested in an all-electric fleet.
What Are Some of the Other Reasons for Ford’s Decision?
Ford needs to make a big move to address sagging sales. The growth of ride-sharing options, increasingly high prices for new cars and a decline among Millennials in car purchases, are all factors.
Ford realizes these trends are unlikely to shift soon. That’s why it’s focusing much of its driverless strategy on trucks and fleet vehicles
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