Market Overview

Ford Spins Off Autonomous Vehicle Company, Plans $4B Investment

Ford Spins Off Autonomous Vehicle Company, Plans $4B Investment

Ford Motor Company (NYSE: F) is spinning off a separate company to accelerate its self-driving vehicle business, improve related operational fitness and drive profitable growth.

What Happened 

Ford Autonomous Vehicles LLC will soon manage a five-year, $4-billion investment in AVs with a focus on self-driving systems integration, transportation-as-a-service development, fleet management, user experience and business strategy.

“The closer alignment of the self-driving platform and the mobility solutions teams will allow faster development of businesses that can thrive in the pre- and post-autonomous vehicle worlds,” according to Ford’s Tuesday press release

The organization will hold Ford’s stake in Pittsburgh startup Argo AI, and it is structured to welcome third-party investment similar to Softbank’s interest in General Motors Company (NYSE: GM)’s Cruze automation.

Sherif Marakby, Ford’s vice president of the autonomous vehicles and electrification, will lead the new organization, while Ted Cannis spearheads Team Edison’s electrification efforts.

Why It’s Important

The third-party investment opportunity is particularly noteworthy for Ford. Long-term, it positions the company to spin off or monetize the AV programs, and more immediately, it sets the stage for a significant stock catalyst.

The general advancement of AV and EV technology, coupled with the newly announced $4-billion investment, also threaten the market leadership of Tesla Inc (NASDAQ: TSLA) and GM.

What’s Next

The restructuring takes effect Aug. 1.

Ford’s stock rose 2.5 percent early Tuesday; the shares were up 0.4 percent at $9.93 at the close Friday. 

Related Links:

One Insurer Just Gave A Glimpse Into How Autonomous Auto Insurance Will Work
Strong June Auto Sales Could Represent 'Peak Market'

Photo courtesy of Ford. 

Posted-In: Ford Autonomous Vehicles LLCNews Tech Best of Benzinga


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