Morning Report: The world’s second largest automaker and its new CEO want to lay claim on the future of driving, but acquiring that future through tech startups is not in the cards (yet).
As Ford weathers a declining stock price in face of its rival, General Motors, Fortune reports that the company, per its new CEO Jim Hackett, wants to be a “mobility smorgasbord.” So what does that actually mean? We’ll leave it to Adam Lashinsky to explain:
At a high level—a level where Hackett frequently dwells—his plan for Ford revolves around focusing the company on revenue sources other than making vehicles with internal-combustion engines. These include producing electric and autonomous cars as well as offering services like the Ford-owned Chariot “micro-transit” system and “curb-management” software that eases congestion in cities.
Of course, one way to accomplish these goals is to simply acquire them. It’s a strategy employed by a number of public tech companies, and the acquisition of tech companies has been leveraged by more traditional staples, such as Walmart, in an attempt to keep pace with the market. Ford, on the other hand, has apparently not seen the value in an acquisition strategy.
According to Crunchbase, Ford has only acquired six companies, with no deals reported thus far in 2017. But of the two deals it reported in 2016, Chariot and SAIPs, both fall in line with the automaker’s “smorgasbord” ambitions. But Ford isn’t the only acquisition shy automaker. Its rival, General Motors, has only acquired eight companies, also with none reported in 2017.
What that means for Ford’s ambitions to get back in the green and catch up with its peers in autonomous driving is unclear. The tech industry and the auto industry have, in efforts to work together, hit bumps in the road. And it’s not as if acquiring your way to relevance is a bulletproof strategy, as Yahoo learned the hard way.
The company also hasn’t completely bypassed the tech industry in terms of financial support. Ford invested in two auto tech companies over the past year: Argo AI, an autonomous software company, for $1 billion, and AutoFi, an online sales system for financing vehicle purchases, for $10 million. Alongside those deals, Ford has invested in ten other startups—a modest pipeline for future acquisitions. Meanwhile, GM has only made four investments, with its most notable being in Lyft’s $1 billion Series F raise. Since that deal, the world’s largest automaker has worked closely with Lyft to hasten its own autonomous ambitions.
But for now, Ford appears to want to be the smorgasbord of mobility without the help of tech startups. Indeed, the company appears to prefer to act autonomously—even if its cars don’t.
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