Ford Motor Company (NYSE: F) and Volkswagen AG (OTC: VWAPY) on Friday officially announced plans to join forces in developing electric and autonomous vehicles. The collaboration will allow Ford access to Volkswagen’s electric vehicle platform. Volkswagen will invest USD 2.6 Billion for an ownership stake in self-driving vehicle startup Argo AI.
Volkswagen said it will commit USD 1 Billion in funding to Argo and contribute its USD 1.6 Billion Autonomous Intelligent Driving (AID) company, which includes more than 200 employees. As part of the deal, Volkswagen will also buy Argo AI shares from Ford for USD 500 Million over three years. Ford will invest the remaining USD 600 Million of its previously announced USD 1 Billion cash commitment in Argo AI. The full transaction values Argo AI at more than USD 7 Billion.
“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. “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 said it plans to deliver a “high-volume zero-emission” vehicle in Europe beginning in 2023 by using Volkswagen’s EV platform, called its Modular Electric Toolkit (MEB). Over six years, the U.S. automaker expects to deliver upward of 600,000 European vehicles using the MEB technology. For Ford, using Volkswagen’s MEB architecture is part of its more than USD 11.5 Billion investment in electric vehicles worldwide.
Volkswagen started developing its MEB architecture in 2016, investing around USD 7 Billion into the platform. The car-maker is planning to use this platform to build roughly 15 Million cars for the Volkswagen Group alone over the next decade.
The two automakers also reported they are on track to deliver medium pickup trucks for global customers, aiming to start in 2022, followed by commercial vans.