Ford, Retreating From Bold Timeline, Buys Quantum Signal for AV Tech

Back in 2016, Ford’s then-CEO Mark Fields fired a shot across the bow when he made a daring pledge. The big automaker would deploy fully autonomous fleet vehicles as part of a ride-sharing or ride-hailing service by 2021, when it would also be mass-producing such vehicles, he said.

Earlier this year, though, current Ford CEO Jim Hackett damped down expectations for the company’s achievements when that 2021 target date arrives. Ford will still create a driverless car by then, Hackett said. But it seems that a widely used commercial fleet service may have to wait.

Although Dearborn, MI-based Ford (NYSE: F) is already testing self-driving cars with partner Argo AI in five US cities, the carmaker is making moves that signal a need to strengthen its autonomous technology—particularly under challenging road conditions.

One of those moves came this week, with the announcement that Ford is acquiring Quantum Signal, a small Michigan research and development company whose expertise spans sensor technology, remote control of robotic vehicles, and a simulation software tool called ANVEL. That modeling and simulation system carries out virtual tests of vehicles, which are shown on a screen as they navigate through various traffic, terrain, and weather conditions. ANVEL users can modify their test runs by adding virtual sensors or other features to their simulated vehicles with point-and-click tools.

Quantum Signal, founded in 1999, has been quietly helping US Department of Defense clients to develop and test connected, driverless vehicles under off-road conditions, Ford said.

“All of this work can be repurposed to support Ford’s self-driving vehicles to help improve their ability to analyze the environment around them,’’ said Randal Visintainer, chief technology officer at Ford Autonomous Vehicles, in a blogpost about the acquisition.

Quantum Signal’s work for outside clients, including the military, is wrapping up as the company becomes a small, independent Ford unit under the new name Quantum Signal AI, Visintainer said in an email exchange with Xconomy.

Ford expects the small company’s contributions to be wide-ranging. Its experience in simulation and algorithm development will help Ford build out its transportation-as-a-service platform, along with vehicle controls that enhance safety and the customer experience, Visintainer wrote in his blogpost. The big carmaker didn’t shy away from saying that its other important goal was to add a cadre of new experts in vehicle autonomy to its existing in-house crew of engineers.

“We’re proud to announce the squad is getting even bigger and more formidable,’’ Visintainer wrote.

The entire Quantum Signal staff of nearly 40—including about 30 engineers—have accepted offers to stay on and join Ford, Visintainer told Xconomy.

Mitchell Rohde, CEO of Quantum Signal, will continue to lead the team as chief executive of the new Ford unit, which will remain at its picturesque digs in a converted old school building in Saline, MI. That’s just south of Ann Arbor and the University of Michigan campus, which is about 50 miles west of Detroit.

Ford said it wants to preserve the “unique culture’’ of Quantum Signal, which describes itself, on its current website, as a “varsity team of super-geeks, in our own schoolhouse, making your problems disappear!’’

Asked what specific benchmarks Ford is now aiming to reach by 2021, the company declined to comment. Nor would it say how close its self-driving car technology has come to being fully ready for mass production and widespread commercial use. The one certainty in the self-driving arena is that all major competitors—including GM (NYSE: GM), Alphabet’s (NASDAQ: GOOGL)Waymo division, and Uber (NYSE: UBER)—are spending billions of dollars in the hope of beating the others to a big share of the future autonomous mobility market.

Ford isn’t disclosing the price it paid for Quantum Signal. But the carmaker is already investing $1 billion over a five-year period to support Pittsburgh-based Argo AI, in an alliance that gives Ford access to related expertise in artificial intelligence and robotics. Argo AI helps equip the self-driving Ford Fusions now being road-tested in Detroit. The partners are also testing autonomous vehicles in Miami, Pittsburgh, Washington, D.C., and Palo Alto, CA.

Earlier this month, Ford welcomed a big rival automaker, Volkswagen, into its Argo AI alliance to share the ongoing expense of refining autonomous technology. Volkswagen is pitching in cash and assets worth a total of $2.6 billion, and like Ford, now owns a significant ownership stake in Argo.

What are the biggest remaining gaps in self-driving technology that Ford is trying to fill right now? Ford declined to answer that question, and another: Once a fully autonomous fleet can operate safely under all conditions, will operating such a fleet of high-tech vehicles produce profits from services such as ride-hailing or food delivery? We may not know, until companies try that on a large scale, whether replacing drivers with expensive technology will save money and boost revenue.

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