Ford and VW team up on EVs

Ford and VW team up on EVs

Automakers say joint development deal for electric and autonomous vehicles will save billions in costs

Ford president and CEO Jim Hackett speaks as Volkswagen CEO Herbert Diess looks on during a news conference in New York City about the two companies’ joint EV and self-driven vehicle plans. (Reuters Photo)
Ford president and CEO Jim Hackett speaks as Volkswagen CEO Herbert Diess looks on during a news conference in New York City about the two companies’ joint EV and self-driven vehicle plans. (Reuters Photo)

FRANKFURT: Ford Motor Co and Volkswagen AG have joined forces to develop autonomous and electric cars and say they are also looking at other areas of cooperation, deepening a global alliance to slash development and manufacturing costs.

The American and European carmakers have already started cooperating in the area of commercial vehicles as part of the industry’s broader effort to redraw production and sales footprints to cope with more stringent regulation and fragmented markets.

VW will invest US$2.6 billion in Argo AI, Ford’s self-driving car venture, and will buy $500 million worth of Argo shares from Ford, giving the two equal stakes in the startup.

Ford also will build an electric car in Europe using VW’s MEB electric vehicle platform, the companies said.

“Our global alliance is beginning to demonstrate even greater promise, and we are continuing to look at other areas on which we might collaborate,” VW chief executive Herbert Diess said on Friday.

Ford expects to build more than 600,000 electric vehicles in Europe over six years, sourcing components and vehicle underpinnings from VW, helping both companies to drive down costs. VW has committed $7 billion to its MEB platform, which is expected to underpin 15 million vehicles worldwide from the VW group over the next decade.

Analysts at Citi said Ford’s licensing of Volkswagen’s MEB platform was a “transformational” step for both companies.

“It likely provides VW with an unassailable scale advantage,” Citi analyst Angus Tweedie said.

The broader alliance, which covers collaboration beyond joint investments in Argo AI, does not entail cross-ownership between the two companies.

Ford created Ford Autonomous Vehicles LLC in 2018, pledging to invest $4 billion until 2023 and has sought outside investors to help share the spiralling cost of developing autonomous vehicles.

Volkswagen will contribute its Autonomous Intelligent Driving (AID) company to Argo, which will boost the self-driving unit’s employees to 700 from 500.


Do you like the content of this article?
COMMENT (1)

Respect all rivals, warns FAT supremo

Football Association of Thailand (FAT) president Pol Gen Somyot Poompunmuang on Thursday cautioned the War Elephants against underestimating any team in their 2022 World Cup qualifying group.

08:20

Scams give Phuket bad name: PM

Prime Minister Prayut Chan-o-cha asked Phuket locals to ensure tourists are not exploited by local operators, said Werachon Sukondhapatipak, a member of the prime minister's working team.

07:34

BoT more amenable but still leery of Libra landing

The BoT chief has toned down his hostility towards Facebook's digital currency plan, but he said prudent study of the benefits and risks of the virtual coin is still needed.

07:31