Ford Motor Company and Volkswagen AG announced last week that they are expanding their global alliance to include electric vehicles – and will collaborate with Argo AI to introduce autonomous vehicle technology in the US and Europe.
Volkswagen CEO Dr. Herbert Diess, Ford President and CEO Jim Hackett as well as Argo AI CEO Bryan Salesky announced that Volkswagen is joining Ford in investing in Argo AI, the autonomous vehicle technology platform company.
Working together with Ford and Volkswagen, Argo AI’s self-driving system (SDS) is the first with commercial deployment plans for Europe and the US.
Being able to tap into both car makers’ global reach, Argo AI’s platform now has the largest geographic deployment potential of any autonomous driving technology to date. Volkswagen and Ford will independently integrate Argo AI’s SDS into purpose-built vehicles ‘to support the distinct people and goods movement initiatives of both companies’.
Argo AI’s focus remains on delivering a Level 4-capable SDS to be applied for ride sharing and goods delivery services in dense urban areas.
Ford and Volkswagen will have an equal stake in Argo AI and, combined, Volkswagen and Ford will own a substantial majority. The remainder will be used as an incentive pool for Argo AI employees.
The full transaction is subject to regulatory approvals and closing conditions.
“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,” 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.”
It was also announced that Ford will become the first additional car maker to use Volkswagen’s dedicated electric vehicle 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. This supports Ford’s European strategy, which involves continuing to play on its strengths – including commercial vehicles, crossovers and imported iconic vehicles such as Mustang and Explorer.
Volkswagen started developing its MEB architecture in 2016, investing approximately $7 billion in this platform. It is planning to use this platform to build approximately 15 million cars for the Volkswagen Group alone in the next decade.
For Ford, using Volkswagen’s MEB architecture is part of its more than $11.5 billion investment in electric vehicles worldwide – and supports Ford’s commitment ‘to offer its European customers a broad range of electric vehicles while meeting its sustainability commitments’.
Says Diess: “Looking ahead, even more customers and the environment will benefit from Volkswagen’s industry-leading EV architecture. Our global alliance is beginning to demonstrate even greater promise, and we are continuing to look at other areas on which we might collaborate.
“Scaling our MEB drives down development costs for zero-emissions vehicles, allowing for a broader and faster global adoption of electric vehicles. This improves the positions of both companies through greater capital efficiency, further growth and improved competitiveness.”
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.
The alliance is governed by a joint committee, which is led by Hackett and Diess and includes senior executives from both companies.
The companies are also on track to deliver medium pickup trucks for global customers, aiming to start in 2022, followed by commercial vans; they both see ‘significant potential, including profitable growth’ by tapping new business areas tied to autonomous technology.
Argo AI says it plans to work closely with both manufacturers to provide the autonomous vehicle technology they need to deliver fully integrated self-driving vehicles that can be manufactured at scale for ‘safe, reliable and durable deployment in ride sharing and goods delivery services’.
Ford plans to design an all-new, MEB-platform-based electric vehicle (EV) model, which starts arriving in 2023; Volkswagen will supply MEB parts and components as part of the collaboration.
The agreement with Ford is a cornerstone of Volkswagen’s electric strategy, supporting the growth of the e-mobility industry and facilitating global efforts to reach the Paris 2050 Agreement.
Both companies remain on track as regards their previously announced plan to improve their respective strengths in commercial vans and medium pickups in key global markets.