Ford and Volkswagen on Friday announced a significant expansion of an alliance first announced in January and which does not involve any cross-ownership of shares of each company.
Under the original deal, Ford and VW plan to jointly develop commercial vehicles and share production facilities. One of the vehicles will be a redesigned version of VW's Amarok mid-size pickup sold overseas, which will likely be twinned with Ford's next-generation Ranger. It's due in 2022.
The two automakers have now detailed plans to also collaborate on EV and self-driving technology.
Ford CEO Jim Hackett and Volkswagen Group CEO Herbert Diess
In the area of self-driving technology, VW will invest in American self-driving tech firm Argo AI, whose key investor is Ford. VW will invest a total $2.6 billion in Argo AI to gain a stake in the company equal to Ford, with the new investment valuing Argo AI at more than $7 billion.
VW's investment will be made up of $1 billion in cash and $1.6 billion via the contribution of its own self-driving tech division known as the Autonomous Intelligent Driving (AID) company. AID is based in Munich, Germany, and has 200 staff. The German team will now work closely with Argo AI's 500 staff in the U.S.
The goal is to develop a safe, robust and reliable self-driving system that Ford and VW can use in mass-produced vehicles to be deployed in fleets offering rides, delivering goods, and potentially other services, specifically in dense, urban centers. The first of these vehicles will appear in 2021, likely in a very limited service. The vehicles will have Level 4 self-driving capabilty. Level 4 means a car can operate without a driver in select conditions, such as being restricted to areas where there is sufficient map data, known as geo-fencing.
VW MEB platform
Also announced Friday was a plan to share VW's modular EV platform for high-volume cars, known as the MEB, with Ford. The Blue Oval is targeting sales of 600,000 MEB-based vehicles in Europe over a 6-year period. One vehicle has already been confirmed and is due to arrive in 2023, and Ford is currently studying a second.
The financial transaction of the MEB sharing dealing wasn't mentioned, but Ford did state that the cost of licensing the platform was part of the more than $11.5 billion the automaker has committed to developing EVs.
Both automakers also said they will look at where they can further collaborate on EVs.
