Ford and Volkswagen are to expand their global alliance to include electric vehicles and will collaborate with Argo AI to introduce autonomous vehicle technology in the U.S. and Europe.

VW is joining Ford in investing in Argo AI, an autonomous vehicle technology platform company.

VWand Ford say they will independently integrate Argo AI’s Self-Driving System (SDS) into purpose-built vehicles.

Argo AI’s focus will remain on delivering a SAE Level 4-capable SDS to be applied for ride-sharing and goods delivery services in urban areas.

Ford and VW will have an equal stake in Argo AI and combined the two companies will own a substantial majority.

Ford says it will also become the first additional automaker to use VW’s dedicated EV architecture and Modular Electric Toolkit – or MEB – to deliver a high-volume zero-emission vehicle in Europe starting in 2023.

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

VW started developing its MEB architecture in 2016. The company is planning to use the platform to build approximately 15 million cars for the Volkswagen Group in the next decade.

For Ford, using VW’s MEB architecture is part of its more than $US11.5 billion ($AU17 billion) investment in electric vehicles worldwide.

The alliance, which covers collaborations outside of Volkswagen and Ford’s joint investments in Argo AI, does not entail cross-ownership between the two companies and is independent from the investment into Argo AI.

VW will invest $US2.6 billion ($AU3.8 billion) in Argo AI by committing $US1 billion ($1.42 billion) in funding and contributing its $US1.6 billion ($AU2.4 billion) Autonomous Intelligent Driving (AID) company, which has been developing self-driving technology for the Volkswagen Group.

As part of the transaction, VW also will purchase Argo AI shares from Ford for $US500 million ($AU745 million) over three years. Ford will invest the remaining $US600 million ($AU893 million) of its previously announced $US1 billion ($1.49 billion) cash commitment in Argo AI.

The full transaction represents a valuation for Argo AI of more than $US7 billion ($AU10.4 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 un-matched capability, scale and geographic reach,” said Jim Hackett, Ford President and CEO. “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.”

Original source: Motor Trader E-Magazine (Aug 2019)

9 Aug 2019