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July 12, 2019

Ford and VW expand alliance to EVs; both to invest in Argo AI

Ford and and Volkswagen Group have announced an expansion of their alliance to include electric vehicles – and will collaborate with Argo AI to introduce autonomous vehicle technology in the US and Europe. The two companies said the expanded collaboration allows both companies to better serve customers while improving competitiveness and cost and capital efficiencies.

By Sam Duke

Ford and and Volkswagen Group have announced an expansion of their alliance to include electric vehicles – and will collaborate with Argo AI to introduce autonomous vehicle technology in the US and Europe. The two companies said the expanded collaboration allows both companies to better serve customers while improving competitiveness and cost and capital efficiencies.

Ford will use Volkswagen’s electric vehicle architecture and Modular Electric Toolkit (MEB) to design and build at least one high-volume fully electric vehicle in Europe for European customers starting in 2023, more efficiently advancing its promise to deliver expressive passenger cars while taking advantage of Volkswagen’s scale

Volkswagen is to join Ford in investing in Argo AI, the autonomous vehicle platform company, at a valuation of more than USD7bn. Tie-up allows both automakers to independently integrate Argo AI’s self-driving system into their own vehicles, delivering significant global scale, they said.

The companies also said Ford and VW are on track to develop commercial vans and medium pickups for each brand in select global markets starting in 2022; sharing development costs to generate significant synergies.

The Volkswagen-Ford global alliance – which does not involve cross-ownership between the companies – is expected to create annual efficiencies for each company.

“While Ford and Volkswagen remain independent and fiercely competitive in the marketplace, teaming up and working with Argo AI on this important technology allows us to deliver unmatched capability, scale and geographic reach,” Ford CEO Hackett said. “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.”

“Looking ahead, even more customers and the environment will benefit from Volkswagen’s industry-leading EV architecture. Our global alliance is beginning to demonstrate even greater promise, and we are continuing to look at other areas on which we might collaborate,” VW chief Herbert Diess said. “Scaling our MEB drives down development costs for zero-emissions vehicles, allowing for a broader and faster global adoption of electric vehicles. This improves the positions of both companies through greater capital efficiency, further growth and improved competitiveness.”

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