Ford and Volkswagen joined forces to develop autonomous and electric cars on Friday and said they were also looking at other areas of cooperation, deepening a global alliance to slash development and manufacturing costs.
VW signed a deal in March to develop a pickup truck using a Ford platform, and the carmakers have been in talks about extending the alliance to include autonomous driving and mobility services, as well as Ford's use of VW's MEB electric-vehicle platform. "It makes both companies stronger", VW chief executive Herbert Diess told reporters.
VW's Argo AI investment includes $1 billion in cash, which matches what Ford first committed to the company in 2017, along with the integration of its existing Autonomous Intelligent Driving company that is now 200 employees strong.More news: Manchester United renew interest in two players from Serie A
Ford is also gaining access to the electric auto platform Volkswagen is launching next year and will use it to build and sell its own battery-powered model in Europe starting in 2023 as it develops a separate lineup of zero-emissions vehicles for the US market.
The company is working to turn the page three years after it was rocked by revelations it had installed emissions-cheating technology on millions of diesel vehicles sold worldwide.
Credit Suisse said an an expanded alliance between the two companies could combine VW's strength in EVs with Ford's in autonomous vehicles, allowing both to "address these challenges in a more capital-efficient manner". Several media reports, however, indicated that Volkswagen would share its proprietary electric vehicle platform with Ford. VW, meanwhile, has been working on MEB since 2016 and expects to build 15 million cars using the platform in the next decade.More news: Japan's space probe first to capture material beneath asteroid surface
"Not only does it likely further de-risk VW estimates in 2020 by guaranteeing some profits from electric vehicles next year, but also likely provides VW with an unassailable scale advantage in the market with it potentially producing around 400,000 battery electric vehicles in Europe next year", Citi analyst Angus Tweedie said in a note published on July 10. (Ford will still complete its billion-dollar investment in Argo AI).
"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". A second model - again, designed for Europe - is under discussion at the company.
Ford created Ford Autonomous Vehicles LLC in 2018, pledging to invest $4 billion until 2023 and has sought outside investors to help share the spiraling cost of developing autonomous vehicles.More news: Antoine Griezmann's lawyers pay release clause to complete Barcelona transfer