Poor, poor Ford. Once the greatest car company in the world and now eclipsed by geeky South African Elon Musk twice in one week. Ford’s problems started when Tesla announced a new market cap of more than $48 billion, beating analysts estimates and superseding the valuation of its much older rival Ford by $2 billion. Of course, Ford is still the more established player, has a more secure long-term business plan and sells about ten times as many cars, but still, it’s never nice to get beaten.
But now Ford has announced that it will be supplying the market with a fully autonomous car by 2026 at the earliest, a full eight years after Tesla, who says it’ll have one on the market by 2018.
The question on many people’s lips is – what’s going on here? Why can’t a company that has been in the business of making cars for over a hundred years get its act together to build a product that people want?
A lot of it has to do with the difference between Ford and Tesla. Because Ford has been around for such a long time, it’s major stakeholders think that they know what the market wants. Their reasoning tells them that the market doesn’t like sudden changes and prefers to be gently guided to new products over the course of many years. Tesla, on the other hand, is more like a startup. Their goal isn’t to gently guide anybody: it’s to disrupt. In fact, Musk has repeatedly stated that the only reason he ever bothered setting Tesla up in the first place was to transition the car industry away from fossil fuels and onto electric. The Tesla versus Ford battle is, therefore, hotting up.
Ford’s primary concern about early implementation is safety. Today, the challenge for drivers involved in a crash is to find an auto accident attorneys with the best reputation. But Ford is worried that even if autonomous cars deliver safety improvements overall, a few bad mistakes could derail the whole project and cause the regulators to shut it down. In other words, Ford has been calling Tesla reckless.
Tesla, on the other hand, isn’t having any of it. They say that any implementation of autonomous technology will reduce the number of deaths on the road versus human drivers, which can only be a good thing.
The real reasons for Ford’s complaints, however, probably stem from the fact that they just aren’t ready yet. Autonomy caught them by surprise, just as it did the rest of the industry. All of a sudden a new technology emerged and became feasible that has forced them to entirely reconsider their business models. Ford, for instance, is now considering a car-as-a-service model, where people just buy lifts as and when they need them, rather than a whole car.
It’s clear that Ford is trying to build autonomous cars. It recently agreed to pay more than $1 billion for Argo AI, an artificial intelligence company specializing in autonomous vehicles. But it’s timeline is hopelessly unambitious.