The autonomous-car bubble has popped

The closure of Argo AI is the latest setback for driverless cars. What comes next?

On The Carbon Copy podcast this week:

Five years ago, venture investors, tech companies and automakers were pouring tens of billions of dollars into driverless cars. Tesla, General Motors, Lyft, Uber and Google’s Waymo were promising large fleets of robo-taxis, with fully autonomous vehicles available by the turn of the decade. 

In 2017, Ford took a big swing. The company invested $1 billion in Argo AI, a startup developing Level 4 driverless systems. Later, Volkswagen entered the partnership. The automakers promised to make a fully autonomous car by 2021

But in October of last year, Volkswagen pulled out of the partnership. Ford said it would shut down the driverless car program, taking a $2.7 billion loss. 

So how did we get to a point where a promising startup once valued at $7 billion is now being written off by automakers? And what does it say about the viability of fully autonomous cars?

Journalist Ed Niedermeyer says Ford’s shutdown of Argo AI was due to inflated expectations that exposed a mismatch in business models.

I think it’s very easy to look at this and say [that] shutting down Argo AI was an admission that this technology doesn’t work…or was a scam. And you look out on social media, and people are taking that lesson away — and I think that’s the wrong lesson.”

This week, we speak with Ed about the real lessons behind the setbacks for autonomous cars: the mismatch between our fantasies and the reality of the technology.

Transcript available here.

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