Auto giant Ford Motor Company (F), together with Argo AI, a global autonomous vehicle technology platform, is set to launch self-driving vehicles using the network services of Lyft (LYFT) by the end of 2021. (See Ford Motor stock charts on TipRanks)
This is a first-of-a-kind collaboration where three companies, each with their unique sets of expertise, combine to accomplish a common goal - to commercialize autonomous ride-hailing services at scale.
The first self-driving cars, with safety drivers, will be used in Miami by the end of this year, followed by Austin in early 2022. A fleet of 1,000 autonomous vehicles is expected to be deployed across multiple cities in the next five years.
Once the autonomous vehicles are launched and ready to ride, Lyft users within the vicinity will be able to select a Ford self-driving vehicle for their trip.
Scott Griffith, CEO, Ford Autonomous Vehicles & Mobility Businesses, said, “Argo and Ford are currently piloting, mapping and preparing for commercial operations of autonomous vehicles in more cities than any other AV collaboration, and this new agreement is a crucial step toward full commercial operations – the addition of Lyft’s world-class transportation network.”
Moreover, Argo will utilize anonymized service and fleet data from Lyft to decide where they can safely deploy their self-driving services to better reach consumers and build a sustainable business.
As part of the agreement, Lyft will receive a 2.5% equity stake in Argo AI, which is expected to go public as early as this year.
Ford has already established a sound base in Miami, Austin, and Washington, D.C., supporting commercial fleets with fueling, servicing, and cleaning.
Following the news, Wells Fargo analyst Colin Langan reiterated a Buy rating on Ford with a price target of $18, implying 29% upside potential to current levels.
Langan said, “While Ford is considered a laggard on future mobility trends, in our view recent actions show the company is leading. Their AV partner, Argo AI, is likely among the top 5 autonomous leaders; the Mach-E is a proof point that Ford is serious about EVs; and now that its vehicles are connected, we are seeing the rollout of connected features.”
Overall, the stock has a Moderate Buy consensus rating based on 9 Buys, 5 Holds, and 1 Sell. The average Ford Motor price target of $15.79 implies 13.3% upside potential to current levels. Shares have gained 107.5% over the past year.
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