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Ford and Volkswagen Announce Multibillion-Dollar EV, Self-Driving-Car Tie-Up

VW will join Ford's Argo self-driving venture, and Ford will build EVs on the Volkswagen platform starting in 2023.

© Provided by Hearst Magazine Media, Inc.   VW will join Ford's Argo self-driving venture, and Ford will build EVs on the Volkswagen platform starting in 2023.

By Alexander Stoklosa, Car and Driver

The tie-up between Ford and Volkswagen is about to move far, far past the recently announced, run-of-the-mill collaboration on commercial vehicles and a mid-size pickup truck and into the future. Today, the two automakers announced a multibillion-dollar investment in the self-driving technology company Argo AI-from which both companies will benefit from autonomous driving know-how-and the sharing of an electric-vehicle platform. 

Ford and Volkswagen expect their investments in Argo AI, an artificial intelligence and robotics company, to pay off in the form of autonomous-driving tech that each can share in their products. Their infusion of cash includes $1 billion from Volkswagen, plus the folding of VW's $1.6 billion Autonomous Intelligent Driving company into Argo (pending European anti-trust review). VW also will purchase $500 million in Argo shares from Ford over the next three years. Ford has already shoved $1 billion into Argo and will invest a further $600 million it previously committed to the tech firm. This gives Ford and VW a substantial ownership majority of Argo AI and grows Argo AI's valuation to $7 billion.

Separate from the Argo AI decision, Ford and Volkswagen have initiated an alliance for not only the previously announced commercial vehicles and pickup truck, but for electric vehicles. Ford will gain access to VW's upcoming MEB electric-vehicle architecture starting in 2023, a platform that underpins VW's I.D. Crozz (pictured above), which goes into production next year. Ford plans to eventually sell more than 600,000 electric vehicles in Europe using that component set over a six-year period. This vehicle will be designed in Ford's Cologne, Germany, facility and co-developed with VW; it will be joined later by a second Ford-badged, Europe-market EV. These two EVs will be distinct from the result of an already-in-motion project that Ford is referring to as a "Mustang inspired" electric crossover, which also will be sold in Europe. 

© Boris Roessler/Picture Alliance via Getty Images   Ford CEO Jim Hackett (left) and Volkswagen CEO Herbert Diess at the Detroit auto show in January 2019.

At present, details on the timing of Argo AI's contributions to both car companies' self-driving features-i.e., if or when those self-driving features will become commercially available-is an open question, although both Ford and Volkswagen stand to realize significant cost savings in developing that tech by teaming up. Ford, at least on paper, seems to be getting quite a lot out of this arrangement relative to VW, which is giving up its self-driving sub-company plus nearly the same $1.6 billion in cash for Argo AI shares, and giving Ford an EV platform. But we'll see how the alliance develops going forward; Volkswagen insists that opening up its MEB electric-car platform to partners will help drive down costs-a noble goal, given how many EVs Volkswagen has vowed to try to sell globally by 2025.

And this doesn't mean that Ford and Volkswagen are now one and the same: Ford CEO Jim Hackett and Volkswagen CEO Herbert Diess emphasized that the tieup will not mean "cross-ownership," and Ford CEO Jim Hackett emphasized that the two companies will remain independent and "fiercely competitive in the marketplace."

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Autos Magazine: Ford and Volkswagen Announce Multibillion-Dollar EV, Self-Driving-Car Tie-Up
Ford and Volkswagen Announce Multibillion-Dollar EV, Self-Driving-Car Tie-Up
VW will join Ford's Argo self-driving venture, and Ford will build EVs on the Volkswagen platform starting in 2023.
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