Ford Motor (F) has partnered with Argo AI and Walmart (WMT) to launch an autonomous vehicle delivery service. The service will make use of the automaker’s self-driving test vehicles that come integrated with Argo AI autonomous driving system. Shares of Ford rose 2.80% to close at $13.22 on Wednesday.
Ford designs, manufactures and sells a range of trucks, cars, sport utility vehicles and electric cars.
The autonomous vehicle delivery service will be used to deliver orders that customers make on Walmart in Miami, Austin, Texas, and Washington, D.C. The trio settled on the selected cities given the strong customer demand. (See Ford stock charts on TipRanks)
The multi-city service should make it easy for customers to order groceries and other items and have them delivered to their doorstep using autonomous cars. Additionally, it should allow Walmart to get the orders delivered with unparalleled speed and ease.
However, it is important to note that the autonomous vehicle delivery service will be available in defined service areas of selected markets.
The CEO of Autonomous Vehicles & Mobility Businesses at Ford, Scott Griffith, said, “Pairing Walmart’s retail and e-commerce leadership with Argo and Ford’s self-driving operations across these multiple cities marks a significant step toward scaling a commercial goods delivery service that will ultimately power first-to-scale business efficiencies and enable a great consumer experience.”
The autonomous vehicle delivery service builds on a strategic collaboration between Ford and Argo that started in 2018. The two have been working to build an autonomous ride-hailing service.
Recently, Benchmark Co analyst Michael Ward reiterated a Buy rating on the stock with a price target of $18, implying 36.16% upside potential to current levels. According to the analyst, Ford has been hit the hardest by the semiconductor chip shortage.
“Though the chip shortage will likely remain an industry issue into 2022, the worst could be over for Ford and a combination of accelerating North American production, record performance at Ford Credit and cash generation should provide momentum for the stock,” Ward said.
Consensus among analysts is a Moderate Buy based on 6 Buys and 3 Holds. The average Ford price target of $16.26 implies 23% upside potential to current levels.