Currently reading: Ford loses $827m after closure of self-driving start-up

American giant reports big Q3 loss despite increased revenues; comes after Fiesta cancellation

Ford made an $827 million (£713m) loss in the third quarter of 2022 due to the closure of Argo AI, the autonomous vehicles start-up it backed with Volkswagen.

The loss comes after Ford took a $2.7 billion (£2.3bn) non-cash pre-tax impairment on its investment in the firm.

Ford CEO Jim Farley cited the short-term unprofitability of level four advanced driver assistance systems (ADAS) – full autonomy without driver supervision, albeit in geo-fenced areas – as the reason for Argo’s closure.

Investment will be diverted to internally developed level two-plus and level three systems to meet customer demand. Engineering staff from Argo AI will be hired at Ford to facilitate this shift.

Farley said: “It’s mission critical for Ford to develop great and differentiated level two-plus and level three applications that at the same time make transportation even safer.

“We’re optimistic about a future for level four ADAS, but profitable, fully autonomous vehicles at scale are a long way off and we won’t necessarily have to create that technology ourselves.” 

To date, more than 83,000 people have subscribed to Ford’s BlueCruise and its Lincoln subsidiary’s ActiveGlide ADAS services.

Ford bluecruise 01

Ford otherwise recorded a strong third quarter: revenue reached $39.4bn (£33.9bn), an increase of 10% compared with the same period in 2021.

It sold almost 1.09m vehicles in the quarter – a 7% improvement compared with Q3 2021. In Europe, wholesale shipments were up 23% from Q2 2022, illustrating the easing of supply shortages.

Nonetheless, 40,000 ‘vehicles on wheels’ sat in inventory – built but awaiting critical parts – at the end of September.

The company’s adjusted free cash flow for Q3 was $3.6bn (£3.1bn), less than half the $7.8bn (£6.7bn) figure recorded for Q3 2021.

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Ford expects its full-year earnings (before interest and taxes) to reach $11.5bn (£9.9bn) – around 15% greater than in 2021. This assumes supply problems do not get worse and strong demand for new products such as the next-generation Ford Mustang.

Farley said: “We’re asking ‘what’s best for customers?’ in everything we do.

“Winning for customers is driving a refounding of the company through Ford+, with high ambitions for quality, innovation, profitability and growth across all our businesses – making smart choices about how we deploy capital even as we learn and adapt.”

Ford fiesta active 2022 front quarter tracking 0

This news follows Ford’s official confirmation that it will discontinue the Fiesta supermini next year, ending a 47-year run.

Launched in 1976, the Fiesta has been a big-seller and held an 11-year deadlock as the UK’s most-bought new car between 2009 and 2020.

However, supply shortages caused by the pandemic hampered the model’s performance. It dropped out of the UK’s top 10 list in 2021, and Ford suspended orders for the model in June.

The Fiesta’s departure comes as Ford ramps up its electrification plans: introducing seven new EVs – three cars and four commercial vehicles – in Europe by 2024.

The company pledges that all of its vehicles – passenger and commercial – will be electric by 2035.

Charlie Martin

Charlie Martin Autocar
Title: Editorial assistant, Autocar

As part of Autocar’s news desk, Charlie plays a key role in the title’s coverage of new car launches and industry events. He’s also a regular contributor to its social media channels, providing videos for Instagram, Tiktok, Facebook and Twitter.

Charlie joined Autocar in July 2022 after a nine-month stint as an apprentice with sister publication What Car?, during which he acquired his gold-standard NCTJ diploma with the Press Association.

Charlie is the proud owner of a Fiat Panda 100HP, which he swears to be the best car in the world. Until it breaks.

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QuestionEverything 30 October 2022
It's a miracle Ford have remained in business. They make continually massive mistakes. They didn't do anything with Aston Martin, Land Rover & Jaguar & their F1 team over the years. Volvo hated being owned them. What a mess of a company.
sadjad_ahmadi 29 October 2022

Ford need a major shake up...a lot of bad board room decisions.