Why Ford Is Taking the Slower Road to Self-Driving Technology

By Markets Fool.com

A self-driving Ford Fusionundergoing testing on a public road. Ford's self-driving technology is fairly advanced, but it will hold off on bringing it to consumers forseveral more years. Image source:Ford Motor Company.

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Ford Motor Company (NYSE: F) CEO Mark Fields made headlines last month when he said that Ford will put a fully self-driving vehicle into mass production in 2021 -- but only for ride-hailing duty. Customers will have to waitseveral more years beyond that to buy a self-driving Ford, he said.

Some of those headlines asked an important question: What's taking so long? It could be a decade beforeFord dealershave self-driving cars to sell. We've heard much earlier dates from others, and not only from "disruptive" high-tech companies but also from established auto-industry suppliers.

In a recent presentation, Ford's global product chief, Raj Nair, explained why Ford isn't rushing into self-driving technology: In Ford's view, the technology requires an additional set of leaps to be safe.

Why Ford is jumping ahead to fully autonomous vehicles

Nair explained that Ford's view on the evolution of self-driving technology has evolved over the last few years. "Four or five years ago, we had a view that we could continue to introduce driver assist technologies, the radars and the camera-based technologies, continue to walk those up from Level 2 to Level 3 to Level 4," he said in a presentation at Ford's investor day earlier this month.

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The levels that Nair is referring to are stages of vehicle automation as defined by the Society of Automotive Engineers (SAE). Here's Ford's summary.

Image source: Ford Motor Company.

As Nair explained, Ford originally thought that the path to full self-driving capability would involve moving through all of the levels as the technology evolved. But as the company's engineers dug deeper into the technology, they realized that somewhere around Level 3, they were going to have a couple of problems. That's why Ford has now decided to skip directly to Level 4, full self-driving within a defined geographical area.

"[With] the higher levels of automation you get to in Level 2 or Level 3, the more the human-machine interface becomes a problem," Nair said. The greater the level of automation, the more time it takes for the human driver to get refocused on driving the car when the system needs the human to take over. He continued:

[Drivers] simply won't have the situational awareness. And if you try to introduce technology to make sure they have the situational awareness, like tracking eyes, for example, to make sure the eyes are on the road, then we found through our research that customers find that increasingly annoying.

They're expecting the vehicle to be automated, you're constantly reminding them get their eyes on the road. And then they're wondering, why did I pay all this money for this feature if it's actually just going to keep my hands on the wheel and my eyes on the road. What's the point of the automation?"

(The idea that the awareness checks are annoying may be tested in the market soon, by the way. General Motors'(NYSE: GM) Super Cruise system, expected to come to market on a Cadillac model next year, is believed to track the driver's eyes to ensure that the driver is ready to take over when the system shuts down.)

Making Level 3 safe led quickly to Level 4

There was another factor in Ford's decision to aim at Level 4. As Nair explained, in order to make a Level 3 vehicle safe in as many situations as possible, Ford's engineers found they were going to have to add most of the technology required for Level 4:

We found we couldn't safely get through scenarios that really concerned us without adding technology like LiDAR and like high-definition 3D maps. Once you go to that point, you're really at the solution for Level 4. So we changed our direction from walking up driver assist technologies, the camera-based and radar-based technologies increasing at percentage, et cetera, to all the way leapfrogging into what does it take to get to Level 4, what does it take to get rid of the driver, what does it take to get rid of the steering wheel, the pedals, and then working on that technology problem.

The upshot: Ford has rejected Tesla's approach

Tesla Motors (NASDAQ: TSLA) has drawn both praise and controversy for its decision to brand its advanced driver-assist system with the "Autopilot" name. Stripped of the hype, Autopilot is an advanced Level 2 system, closer to a cruise control than to a full self-driving solution.

Tesla's argument is that even if it's imperfect, its system improves safety -- and having lots of Autopilot-equipped Teslas operating in the real world will produce lots of data that will speed Tesla's development of more advanced systems.

There's some merit to that argument. But Ford knows that it can't get away with the kinds of imperfections that its swashbuckling Silicon Valley rival can. That's why Ford is exercising what might seem like an abundance of caution.

The end result might be that Ford lags some of its rivals by a year or two as this technology evolves. But Ford's view is that a decade or two from now, it won't make any difference -- and the Blue Oval would rather take the safest path.

For Ford's investors, that might seem less exciting, but it's probably for the best.

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John Rosevear owns shares of Ford and General Motors. The Motley Fool owns shares of and recommends Ford and Tesla Motors. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.