Walmart to test car tests in several cities with Ford, Argo

Walmart is expanding its range of self-driving vehicles to include Ford Motor and Argo AI, an autonomous start-up vehicle backed by the automaker.

The companies said Wednesday that the partnership will use Ford Escape hybrids with Argo AI technology to deliver Walmart to Miami, the District of Columbia and Austin, Texas.

The program will allow Walmart customers to place food orders and other items online for autonomous door-to-door delivery.

“We are excited to expand our autonomous delivery efforts in three new markets alongside Argo and Ford,” said Tom Ward, senior vice president of Walmart US’s last mile delivery, in a statement. “This collaboration will further our mission to deliver products to our customers’ homes with unparalleled speed and ease, and in turn, will continue to pave the way for autonomous delivery.”

Ford and Walmart will operate a pilot program with automatic driving vehicles in 2018. The retail giant currently operates automotive delivery pilots with Gatik and Cruise supported by General Motors. In addition to the partnerships, Walmart has taken an undisclosed stake earlier this year in Cruise.

Online grocery orders are a central part of Walmart +, the big-box retailer membership program that was launched a year ago. One of the advantages of the program is free, unlimited food delivery to members ’homes. The subscription service competes with Amazon Prime.

Walmart, the nation’s largest drugstore, has seen a dramatic increase in online sales during the pandemic as more consumers stayed home and refilled their refrigerators from the bed. Its e-commerce sales in the United States have grown 79% in the last fiscal year, which ended Jan. 31. Yet Walmart has not made a profit with its e-commerce business, putting pressure on the company to come up with more cost-effective ways to deliver boxes and items of goods to its doors.

The new collaboration is the first multi-service in terms of autonomous vehicles for Walmart. Bryan Salesky, founder and CEO of Argo AI, said the focus on three cities will show “the potential of autonomous scale vehicle delivery services.”

Initially, the companies will deploy a small fleet in each of the three cities, with the plan to expand over time, according to an Argo AI spokeswoman. Argo AI, which Ford owns in conjunction with German automaker Volkswagen, is testing autonomous driving vehicles in the three cities and others.

The marketing of autonomous vehicles has been much more challenging than expected several years ago. The challenges have led to a consolidation in the autonomous vehicle sector after years of enthusiasm announcing the technology as the next multimillion-dollar market for transportation companies.

Some companies, such as Uber Technologies, have given up developing systems at home, while others like Zoox sell to Amazon. Waymo remains the first high-profile racer, operating a fleet of public autonomous vehicles in Arizona.

– CNBC Melissa Repko contributed to this report.