Ford-VW alliance over electric vehicles seen upping pressure on other carmakers

Galtero Lara
Julio 12, 2019

Volkswagen and Ford are teaming up with a massive $7 billion project to attack the new frontier in the global auto market: electric and self-driving vehicles, the companies announced Friday.

While the partnership was originally confirmed back in January, some new news is the fact that VW is joining the Dearborn, Michigan-based automaker with a hefty investment into autonomous vehicle platform company Argo AI. The companies said Volkswagen Chief Executive Herbert Diess and Ford CEO Jim Hackett would appear together tomorrow in NY, but provided no additional information in a news release. The two automakers will also look at other ways to work together on electric vehicles, but it didn't go into much detail there.

The second major cornerstone in Volkswagen and Ford's relationship is an investment by the German firm in Argo AI, an autonomous vehicle company that Ford first backed in 2017.

VW will invest $2.6 billion in Argo AI, Ford's self-driving cars venture, and will buy $500 million worth of Argo shares from Ford, giving the two automakers equal stakes in the startup.

Volkswagen intends to launch a vehicle with Argo's platform in "the early 2020s", according to CEO Herbert Diess.

"It likely provides VW with an unassailable scale advantage", Citi analyst Angus Tweedie said in a note published on July 10.

On top of this, Ford and VW are looking to share investments in vehicle architecture, commercial vans, medium-size trucks and larger commercial vans for Europe.

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Ford will engineer and build a medium-sized pick-up to be sold by both brands in Europe, Africa, the Middle East, Asia Pacific and South America from 2022.

Ford is in the midst of an $11 billion restructuring effort.

Argo AI's technology will be incorporated into both Ford and VW vehicles as part of each company's plans to offer geofenced driverless robotaxis or goods delivery services in the U.S. and Europe.

"Unlocking the synergies across a range of areas allows us to showcase the power of our global alliance in this era of smart vehicles for a smart world".

Ford also gets something out of this partnership. Many of those models will be built on an updated version of Ford's C2 global compact platform, they said.

The autonomous company has self-driving test fleets of Ford Fusion Hybrids active in Detroit, Pittsburgh, Palo Alto, Miami and Washington D.C.

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