Ford Motor Company F 0.3% is spinning off a separate company to accelerate its self-driving vehicle business, improve related operational fitness and drive profitable growth.
What Happened
Ford Autonomous Vehicles LLC will soon manage a five-year, $4-billion investment in AVs with a focus on self-driving systems integration, transportation-as-a-service development, fleet management, user experience and business strategy.
“The closer alignment of the self-driving platform and the mobility solutions teams will allow faster development of businesses that can thrive in the pre- and post-autonomous vehicle worlds,” according to Ford’s Tuesday press release.
The organization will hold Ford’s stake in Pittsburgh startup Argo AI, and it is structured to welcome third-party investment similar to Softbank’s interest in General Motors Company GM 2.08%’s Cruze automation.
Sherif Marakby, Ford’s vice president of the autonomous vehicles and electrification, will lead the new organization, while Ted Cannis spearheads Team Edison’s electrification efforts.
Why It’s Important
The third-party investment opportunity is particularly noteworthy for Ford. Long-term, it positions the company to spin off or monetize the AV programs, and more immediately, it sets the stage for a significant stock catalyst.
The general advancement of AV and EV technology, coupled with the newly announced $4-billion investment, also threaten the market leadership of Tesla Inc TSLA 3.09% and GM.
What’s Next
The restructuring takes effect Aug. 1.
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