Ford-VW alliance over electric vehicles seen upping pressure on other carmakers

Ford-VW Alliance Seen Amping Up Pressure on Other Automakers

Following another round of discussions, the two automakers today said they will expand their alliance to include electric vehicles while also investing in Pittsburgh-based Argo AI, a leading autonomous vehicle platform company, to introduce the technology in the US and Europe.

Ford and Volkswagen have announced a partnership to invest billions in electric and autonomous vehicles.

"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", stated Ford President and CEO Jim Hackett.

VW and Ford said their alliance would let them roll out self-driving technology in more markets than other companies. Ford and VW will hold equal stakes in Argo AI.

The partnership with Ford and Volkswagen will allow the firms to "share significant [research and development] costs in the high triple-digit millions", Diess said. The expansion of Volkswagen and Ford's partnership is the latest doubling down of betting on autonomous vehicles as the next big thing.

On top of this, Ford and VW are looking to share investments in vehicle architecture, commercial vans, medium-size trucks and larger commercial vans for Europe.

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"The companies also will share details of new collaborations also aimed at better serving their customers while improving each company's competitiveness and capital efficiency", stated a press release. Ford already has committed to putting $1 billion into Argo, which the companies now value at $7 billion.

With VW, the world's biggest automaker by sales volume a year ago, Argo is now aligned with a partner with substantial scale and resources. Of course, the company has to think ahead to that day and do the pick-and-shovel development work now to ensure that it doesn't get left behind when autonomous vehicles become ubiquitous.

The electric vehicle cooperation will help reduce development costs and make battery-powered vehicles available faster across the globe, VW CEO Herbert Diess said in a statement. In return, the German carmaker may invest in Argo AI, Ford's autonomous partner.

As with Ford and VW, much of this sharing is happening without outright takeovers and mergers. It could also be years, if not decades before carmakers can profit off of autonomous vehicles.

Volkswagen and Ford also announced to team up in electric mobility as Ford will be the first "additional automaker" to use Volkswagen's modular electric drive platform (MEB).

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