Auto Industry News: Toyota Looks to “Crown” New Segment, Argo AI Goes Bust, Tesla Under Criminal Investigation, and Killer Cars for Halloween
The self-driving sector received a heavy blow last week with news that Argo AI is no more. The struggling autonomous tech company failed to attract new investors, costing its backer Ford some serious money in Q3. Meanwhile, Tesla’s self-driving claims continue to draw scrutiny – and this time it’s pretty serious. Sources at the DOJ confirmed the EV maker is under criminal investigation for a series of crashes (some fatal) which occurred while Autopilot software was engaged. The Engine Block has details on all these stories and more, including October sales estimates and a round-up of killer cars giving off big Halloween vibes. (Would you take Stephen King’s “Christine” for a spin?)
But first… Toyota is looking for something new, and seems confident the Crown might just be it. Leaning more toward sedan than SUV in the murky crossover waters, the vehicle resurrects an old badge with a new vision.
Toyota Hopes to Crown New Segment
Lifted sedan or squat SUV? Who cares? says Toyota, as long as it sells.
The resurrected Crown badge is officially back on the American market after 50 long years, leaving more than a few folks wondering… uh, why, exactly?
Discontinued in the States in 1972, the Toyota Crown never quite managed to capture the attention (or affection) of U.S. audiences. And with a major head-scratching design this time around, history seems like it may repeat itself.
Toyota thinks differently, and feels confident the hard-to-label Crown could represent the ‘next big thing’ in vehicle design. Believing that sedan demand is not entirely dead – but admitting that consumers unabashedly prefer the high seating positions afford by SUVs – Toyota aims to provide a Goldilocks solution in the Crown.
“With a look that’s entirely unique for its class, the all-new 2023 Toyota Crown brings bold style to the top of the Toyota sedan lineup,” the company proudly states. “With massive wheels, a flowing silhouette and unique paint options, it is a ride that is ready to stand out from the crowd.”
This doesn’t mean the automaker is giving up on SUVs – or big SUVs for that matter. Toyota’s Grand Highlander was recently spotted testing in Michigan. Designed to address the “too cramped” third-row seating of the existing Highlander model, this offering is longer and bigger with a noticeably higher rear roofline.
In Case You Missed It…
Ford unveiled its 2023 Escape last week, revealing a vehicle that looks significantly more upscale. The revamped exterior includes a new hood, grille, headlamps, and wheel designs, lending a “more energetic, confident and sleeker” impression than previous Escapes, said Ford Design Director Amko Leenarts. The automaker also added a new ST-Line model for the new year (pictured), which wears sportier styling but no additional performance-minded mods.
October Sales Snapshot
According to J.D. Power and LMC Automotive’s joint forecast, October new-vehicle retail sales are expected to be 12.1% higher than last year.
These results indicate a “modest improvement” to inventory levels, says Thomas King, president of the data and analytics division. However, strong demand means manufacturer discounts remain low and dealer profits remain high, with nearly 50% of new vehicles still selling above MSRP.
In fact, the forecast shows that buyers spent more money on new vehicles this month than any previous October. The average transaction price is expected to reach $45,599—a record for October and a 2.7% increase from a year ago.
Additionally, the average monthly finance payment in October is on pace to be an eye-watering $711, a 7.0% increase from a year ago.
In what is not a particularly reassuring silver lining, King says monthly loan payment increases would actually be even higher if it weren’t for the strong trade-in value consumers are getting for their used rides. (Although, Manheim data shows those values are dropping. Wholesale used-vehicle prices declined 2.0% from September in the first 15 days of October.)
On the EV front, interest is growing alongside availability. However, Elizabeth Krear, VP of electric vehicle practice at J.D. Power notes that “adoption has been flat for the past six months, with the retail monthly share for BEVs hovering at 5.6%. The top two reasons for EV rejection are lack of public charging and price.”
Argo AI Goes Under, Taking Ford’s Q3 Numbers With It
Argo AI, the Pittsburgh-based autonomous driving technology startup founded in 2016 and backed by automakers Ford and VW, is officially shutting down. The company announced the news during an all-hands meeting on Wednesday, Oct. 26.
The reason for Argo’s demise is pretty straightforward: Money.
According to the Ford’s third-quarter earnings report, Argo AI was unable to attract new investors this year. As a result, the Blue Oval recorded a $2.7 billion non-cash, pretax impairment on its investment in the tech company, resulting in an $827 million net loss for Q3.
“It’s estimated that more than a hundred billion has been invested in the promise of level four autonomy,” Ford CEO Jim Farley said during the company’s Q3 earnings call. “And yet no one has defined a profitable business model at scale.”
“Harder Than Putting a Man on the Moon”
For reference, a vehicle with Level 4 autonomy is fully capable of driving itself without the assistance or intervention of a human driver. However, it is limited to pre-mapped roads and sometimes, even certain weather conditions. Think of the Cruise robotaxis zipping around very specific San Francisco streets and you’ve got the right idea.
Argo AI was essentially working on this same scenario – a robotaxi fleet that Ford and VW could monetize.
Unfortunately, the company missed the deadline to roll out such a commercial product in 2021, signaling what was likely the first fallen domino. When it laid off 150 employees this past July noting an “overstaffing situation,” whispers began circulating that perhaps Argo had expanded too much, too quickly.
By the third quarter of this year, both Ford and VW realized profitability wasn’t looking like such a sure thing anymore. [Developing fully autonomous vehicles] “is harder than putting a man on the moon,” said Doug Field, Ford’s chief advanced product development and technology officer.
Ford decided to shift capital spending away from Argo’s Level 4 experiments and funnel it into internal developments centered on current Level 2 & 3 ADAS technologies. (Learn more about how those work, here.) VW made a similar move, circling the wagons and investing in its own autonomous driving software subsidiary, Cariad.
What’s Next?
Argo’s closure affects about 2,000 employees, 800 of which are based in Pittsburgh – a city that has seen quite an infusion of autonomous car tech startups in recent years. Aurora, Motional (formerly Aptiv) and Waymo all have operations in the Steel City.
The company notes that many employees will simply be absorbed into tech positions at Ford or Volkswagen, “while employment for others will unfortunately come to an end.” (On the bright side, news outlets report that the severance packages were quite generous.)
As for the larger self-driving tech sector, it looks like (for now) Waymo and Cruise will lead the race to profitability. While both companies continue to lose money every year (and consumer confidence), they are *technically* still generating revenue.
Time will tell if other self-driving tech companies follow Argo into the Land of Consolidation. However, it does seem like a probable future, especially as costs skyrocket and optimistic venture capitalists realize autonomous technology is much more difficult than they imagined.
Yet More Tesla Scrutiny – And This Time It Looks Pretty Bad
Last year, the DOJ launched a “probe” into Tesla’s driver assistance system Autopilot after roughly a dozen high-profile crashes – some fatal. New information reveals it was actually a criminal investigation, meaning charges could be filed against the company or individual executives.
In an exclusive Reuters report released on Oct. 27, unnamed sources at the Justice Department confirmed that government officials are trying to determine “whether Tesla misled consumers, investors, and regulators by making unsupported claims about its driver assistance technology’s capabilities.”
At issue, is Tesla’s use of the terms “Autopilot” and “Full Self-Driving (FSD)” to describe its standard and add-on packages of advanced driver assistant features. The terms, while certainly buzzy, are more aspirational than realistic. There are no full self-driving cars available – anywhere. The technology simply does not exist yet.
You may remember that the California DMV recently took aim at the EV maker for the same reason. Those accusations led to California lawmakers passing a bill that could legally force Tesla to stop using the term “Full Self-Driving” in its marketing. It currently awaits Gov. Newsom’s signature.
Additionally, NHTSA recently expanded its safety probe into the technology which could lead to its recall.
The pressure cooker environment seems not to phase Elon Musk. In an earnings call this month, he said Tesla will release upgraded Full Self-Driving software at the end of the year – despite not receiving regulatory approval in 2022.
Did you know…?
In a recent survey from online insurance marketplace Policygenius, 76% of respondents said that they feel less safe driving or riding in cars with self-driving features. Almost as many aren’t comfortable sharing the road with other drivers in self-driving vehicles, either. 73% said they feel less safe knowing other people on the road are traveling in cars with self-driving features.
Killer Cars
Speaking of dangerous rides, we rounded up a quick list of killer cars sure to give you a thrill – some cinematic, some legitimately haunted, and some just too cute to spook.
1958 Plymouth Fury “Christine” | Last seen: Mecum Kissimmee 2020
Though 24 different cars were used throughout the 1983 classic horror film adapted from Stephen King’s novel, only one was actually a Fury. She still exists, and recently showed up at Mecum’s 2020 Kissimmee auction. Estimated to sell for $400,000-$500,000, ol’ Christine only racked up a high bid of $275k so, as they as, the bid goes on.
Freaky Fact: Apparently King’s inspiration for Christine came from a 1964 Dodge 330 Limited Edition dubbed The Golden Eagle. Now referred to as “the most evil car in America,” it has anywhere between 14 and 32 deaths linked to it – depending on which stories you believe. In 2010, a church group stole and dismantled the possessed ride, presumably ending its reign of terror.
1998 Harley-Davidson Skull Trike with Coffin Trailer | Last seen: Mecum Kissimmee 2022
You’d have to be a tough nut not to crack a smile at this wacky build. The custom Trike harbors a Harley-Davidson S&S 1340cc engine and tows a K166.1 Coffin Trailer equipped with generator, fuel cell, sound system and fog machine. It even hides an air conditioning unit in the top hat! Sold for $35,200 at this year’s Mecum Kissimmee, though the total cost of the build was over $150k.
Bonnie and Clyde’s Bullet-Riddled 1934 Ford V8 Fordor Deluxe | Last seen: Whiskey Pete’s Hotel & Casino in Primm, Nevada 2022
When Bonnie Parker and Clyde Barrow stole this 1934 Ford V8 for their infamous killing spree, it’s safe to say they didn’t expect it to wind up one day in a casino lobby, encased in plexiglass alongside Clyde’s blood-spattered shirt. But, then again, it’s safe to say Bonnie & Clyde weren’t exactly known for thinking things through.
James Dean’s Porsche 500 Spyder ‘Little Bastard’ | Last Seen: 1960, being loaded into a sealed boxcar in Miami
Most famous for tragically cutting short the life and career of actor James Dean, this haunted Porsche went on to earn its nickname as “Little Bastard” by causing several more injuries, accidents, and deaths over the years. It disappeared in 1960, and its whereabouts remain unknown. A million-dollar reward for information leading to its recovery was offered in 2005.
1964 Dragula Coffin Dragster Replica | Last Seen: Mecum Monterey 2022
Built to replicate the famous Dragula racer featured in the hit 1960s sitcom, “The Munsters,” this tribute is perhaps one of the best we’ve ever seen. The exterior detail is enough to woo most folks, but enthusiasts will be more interested in what’s under the hood: a 289/350 HP V-8 small-block engine like the original car used, topped by an Edelbrock intake manifold with dual Holley 4-barrel carburetors, Mickey Thompson valve covers and vertical pipe organ exhaust. This replica made a recent appearance, selling at Mecum Monterey in August for $101,200.
The Engine Block is your one-stop source for any and all auto industry news. Keep an eye on our weekly round-up of enthusiast coverage, product reviews, vehicle spotlights, auto show/expo features, and more. Be sure to check back Friday for a list of five trucks totally worth their price tags.
