Volkswagen and Ford team up on self-driving and electric cars
- by Emilio Sims
- in Money
- — Jul 13, 2019
- In April, Ford said it would invest $500 million in electric vehicle startup Rivian to build a Ford vehicle on Rivian's underpinnings.
The automakers will work together to develop a self-driving system and integrate it into their own vehicles, with Ford already planning to debut a hybrid utility vehicle aimed at providing commercial ride-hailing and package delivery services by 2021. Ford CEO Jim Hackett said the production location for the vehicle would be announced at a later date, but that the company is expecting to sell 600,000 over six years and is planning to add a second model on the platform.
"Our global alliance is beginning to demonstrate even greater promise, and we are continuing to look at other areas on which we might collaborate", Diess said. "We will share updates as details become more firm", a Ford spokeswoman said in a statement. $1 billion will come from funding, while the remaining $1.6 billion will come in the form of VW's Autonomous Intelligent Driving (AID) company, which has more than 200 employees and has been responsible for self-driving-car development for the VW Group. Now, as suspected, Ford will also use VW's modular electric vehicle architecture (called MEB) to offer a new battery EV in Europe. (Ford will still complete its billion-dollar investment in Argo AI).
With electric and autonomous vehicles driving the biggest shake-up in the automotive sector in a century, the huge costs of developing these ground-breaking technologies is forcing even the biggest players to form alliances to share the financial strain.
The decision to team up helps the Ford and Volkswagen share the steep costs - and risks - of developing technology for driverless vehicles, and gives Argo AI more cash to attract talented engineers, crucial to success.
ArgoAI CEO Brian Salesky commented on the company's investments stating: "Thanks to Ford and VW, our technology could reach almost every global market, could applied to multiple vehicle brands a variety of vehicle platforms". It could also be years, if not decades before carmakers can profit off of autonomous vehicles.
According to Citi analysts, the collaboration is "transformational" for both companies. Edmunds provides content for The Associated Press.
With electric vehicles, manufacturers are under pressure to release zero-emission cars in markets such as China and Europe to meet tougher pollution limits. Ford shares were up 0.4% to $10.15 as of 1:25 p.m. Thursday in NY. They said Ford would develop larger vans and pickups while Volkswagen would develop a smaller van for crowded cities.
