Ford, VW join forces on electric, autonomous cars

Cornelia Mascio
Luglio 12, 2019

Volkswagen and Ford announced plans Friday to work closely to develop electric- and self-driving vehicles, the latest automakers to partner in the face of massive changes rocking the auto industry. Specifically, the two will leverage their strengths in electric vehicles and autonomy, giving the two automakers more solid footing in both arenas. The companies said Volkswagen Chief Executive Herbert Diess and Ford CEO Jim Hackett would appear together tomorrow in NY, but provided no additional information in a news release.

In addition, VW is pouring $2.6 billion into Argo AI, a self-driving startup based in Pittsburgh.

The value of VW's contribution to the collaboration is more than $2 billion, including about $1 billion invested, said two industry sources who requested anonymity discussing the deal.

VW said it had committed $7 billion to its MEB platform, which is expected to underpin 15 million vehicles worldwide from the VW group over the next decade.

VW will become an equal stakeholder in Ford's autonomous vehicles venture.

"Not only does it likely further de-risk VW estimates in 2020 by guaranteeing some profits from electric vehicles next year, but also likely provides VW with an unassailable scale advantage in the market with it potentially producing around 400,000 battery electric vehicles in Europe next year", Citi analyst Angus Tweedie said in a note published on July 10.

As part of Friday's press conference, Ford confirmed that it plans to deliver more than 600,000 vehicles in Europe that uses VW's Modular Electric Toolkit over six years.

Ford is in the midst of an $11 billion restructuring effort.

"Ford has taken flack for years for not having a robust EV strategy and VW has had its own fair share of challenges, but this can help both companies reinvent themselves as innovative technology leaders", said Jessica Caldwell, an auto analyst at Edmunds.

"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". A second model is also under discussion, the companies said.

Volkswagen will contribute its Autonomous Intelligent Driving (AID) company to Argo, which will boost the self-driving unit's employees to 700 from 500.

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