Ford Motor Co. and Volkswagen AG joined the forces to develop autonomous and electric cars on Friday and said they were exploring other areas of cooperation by deepening a global alliance to reduce development and production costs.
Ford and VW have already begun to cooperate in the field of commercial vehicles as part of the wider automotive industry’s effort to reorient production and sales tracks to cope with more stringent regulations and fragmented markets.
VW will invest $ 2.6 billion in Argo AI, Ford’s car venture company and will buy $ 500 million in shares from Ford, giving two automakers equal shares in the start.
Companies said that Ford will also build an electric car in Europe using the VW’s MEB vehicle platform.
On Friday, VW’s chief executive Hebert Diess said, “Our global alliance is beginning to show even greater promises and we are continuing to see other areas to cooperate.”
Ford expects to build more than 600,000 electric vehicles in Europe for more than six years, providing components and bases of vehicles from the VW, helping both companies lower their costs. VW said it had made $ 7 billion for its MEB platform, which is expected to support 15 million vehicles worldwide from the VW group over the next decade.
Citi analysts said Ford’s licensing of Volkswagen’s MEB platform was a “transformational” step for both companies.
“VW’s likely to have an unreachable edge on the ladder,” Citi Angus Tweedie’s analyst said on a note published July 10.
The wider alliance, which covers co-operation beyond joint investment in Argo AI, does not include cross-ownership between the two companies.
Ford created Ford Autonomous Vehicles LLC in 2018, promising to invest $ 4 billion by 2023 and has asked foreign investors to assist in delivering the spiral cost of developing autonomous vehicles.
Volkswagen will contribute with Autonom Intelligent Driving for Argo, which will increase the self-drive unit’s staff to 700 out of 500./Investing.com