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Ford Is Far From First in Driverless Vehicles—and Investors Want In Posted on Aug 09 - 2018

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The autonomous-vehicle gap between Ford Motor Co. and its rivals from Detroit and Silicon Valley can be measured in years. Yet even a company playing catch-up in the race to turn self-driving technology into high-margin businesses is drawing interest from outside investors, an indicator of just how much money is pouring in.

“I’m really excited about what I'm hearing and seeing in terms of interest with many credible entities,” said Sherif Marakby, the Ford veteran who spent a year at Uber Inc. and is now chief executive officer of the newly formed Ford Autonomous Vehicles LLC.

Ford moved last month to reorganize its self-driving car efforts into one distinct unit. The announcement on July 24 left open the possibility of an outside investment such as the $2.25 billion that General Motors Co.'s driverless business received from Japan's SoftBank Group Corp. in June. The shift was overshadowed the next day by disastrous quarterly earnings that sank Ford’s stock.

Yet serious investors are sniffing around Ford AV, Marakby said in an interview this week, enticed by a "one-stop shop" strategy that involves robot taxis and driverless delivery slated to hit the streets in 2021. That’s three years later than Alphabet Inc.’s Waymo, which will open a robotaxi business in Phoenix later this year, and two years after General Motors Co., which plans to deploy self-driving Chevy Bolts in a ride-hailing service in 2019.

He declined to identify the interested parties or say when they might invest. But he said they are attracted by how Ford plans to “bring the entire ecosystem together, meaning an investor in this LLC would be looking at bringing this technology to market and developing the business, the revenue and the profits.”

Old-line automakers have struggled to get credit from Wall Street for the billions they are lavishing on developing self-driving cars. That’s why they’ve started to hive off autonomous activities into distinct units that can attract outside investment and even be spun off. Daimler AG, for instance, recently unveiled a Mobility AG separate from its Mercedes-Benz and commercial truck units. GM, whose shares soared after attracting a SoftBank investment in its self-driving car unit, Cruise Automation, is now considering a public offering of shares in a spinoff. A profit warning last month sent GM’s stock back down, highlighting how its high-flying autonomous activities are tethered to the gyrations of the cyclical car business.

Indeed, Wall Street investors have shown little interest in Ford's stock, which fell to a six-year low after second-quarter profits plunged and the company revealed an $11 billion restructuring that could take five years. By setting off its autonomous-vehicle  business in a limited-liability company, Ford hopes its self-driving strategy will be assessed on its own merits. View More

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