Ford Motor stated on Tuesday it was creating a separate $4 billion unit to house its self-driving vehicle projects and is looking outside investors, after a similar move in May by Detroit competitor General Motors with its Cruise Automation unit.
GM’s spinoff of Cruise drew a $2.25-billion investment from SoftBank Group, increasing the automaker’s share price that day by 13 percent. SoftBank’s 19.6-percent stake valued Cruise at $11.5 billion. GM paid about $1 billion in 2016 to acquire the San Francisco-based self-driving startup.
“Ford has seemingly taken a step out of GM’s playbook to try to unlock value” from its self-driving business, stated RBC Capital Markets expert Joseph Spak.
Ford stated it would invest $4 billion through 2023 in its recently formed Ford Autonomous Vehicles LLC, including the $1 billion it earlier had earmarked for Argo AI, the Pittsburgh-based self-driving startup that Ford acquired during last year.
The new unit, to be lead by Vice President Sherif Marakby and based at Ford’s new Corktown campus located in Detroit, will house self-driving vehicle research, engineering and systems integration, along with business strategy and development for the automaker’s future self-driving vehicle fleet.
Ford stated it hoped to speed up business opportunities with the creation of the new unit, which it informed is “structured to take on third-party investment.”