Ford, Volkswagen expand partnership

Ford, Volkswagen expand partnership

Automakers will jointly develop electric vehicles, VW to buy into Ford’s Argo AI self-driving car unit

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Cleveland, Ohio – Ford Motor Co. and Volkswagen AG plan to jointly develop electric vehicles (EVs) and strengthen Ford’s Argo AI autonomous driving subsidiary. The agreement expands the companies’ January deal to collaborate on pickups and vans for some global markets.

Volkswagen will invest $2.6 billion in Argo AI – $1 billion in funding and rolling its 200-employee, $1.6 billion Autonomous Intelligent Driving (AID) company into Argo. Volkswagen will purchase Argo AI shares from Ford for $500 million over three years. Ford will invest the remaining $600 million of its previously announced $1 billion cash commitment in Argo AI. The deal values Argo at more than $7 billion.

“With AID employees, we will have a global workforce to attract even more of the best talent,” said Argo AI co-founder and CE Bryan Salesky. “Thanks to Ford and Volkswagen, Argo AI technology could one day reach nearly every market in North America and Europe, applied across multiple brands and to a multitude of vehicle architectures.”

AID’s Munich, Germany, offices will become Argo AI’s European headquarters and will be led by AID CEO Karlheinz Wurm.

“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 President and CEO Jim Hackett said.

The deal will jumpstart Ford’s EV plans, allowing Ford to use VW’s modular electric toolkit (MEB) – the EV architecture that Volkswagen began developing with massive resource allocations in 2016 as it recovered from its diesel emissions scandal.

Ford expects to deliver more than 600,000 European vehicles using the MEB architecture throughout six years, with a second model for European customers under discussion.

Volkswagen started developing its MEB architecture in 2016, investing approximately $7 billion in this platform. It plans to use MEB to build approximately 15 million cars for the Volkswagen Group in the next decade.

“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,” Volkswagen CEO Dr. Herbert Diess said. “Scaling our MEB drives down development costs for zero-emissions vehicles, allowing for a broader and faster global adoption.”

The companies remain on track to deliver medium pickup trucks for global customers in 2022, followed by commercial vans.

About the author: Robert Schoenberger is the editor of Today's Motor Vehicles and a contributor to Today's Medical Developments and Aerospace Manufacturing and Design. He has written about the automotive industry for more than 19 years at The Plain Dealer in Cleveland, Ohio; The Courier-Journal in Louisville, Kentucky; and The Clarion-Ledger in Jackson, Mississippi.

rschoenberger@gie.net