Ford Motor Co. and Volkswagen AG are expanding their global alliance to include electric vehicles and will collaborate with Argo AI to introduce autonomous vehicle technology in the U.S. and Europe, the companies have announced.
With Ford and Volkswagen, Argo AI's self-driving system is the first with commercial deployment plans for Europe and the U.S.
The global reach of the automakers will potentially make Argo AI's platform the largest geographic deployment of any autonomous driving technology to date. Volkswagen and Ford independently will integrate Argo AI's system into purpose-built vehicles.
Argo AI's focus will remain on delivering a SAE Level 4-capable system that will be applied for ride-hailing and goods delivery services in dense urban areas.
Ford will use Volkswagen’s Modular Electric Toolkit, a dedicated electric vehicle architecture.With plans to start releasing high-volume zero-emission vehicles in Europe beginning in 2023. The companies are also on track to deliver midsize pickup trucks for global customers, aiming to start in 2022, followed by commercial vans.
Volkswagen will invest $2.6 billion in Argo AI by committing $1 billion in funding and contributing its $1.6 billion Autonomous Intelligent Driving company, which includes more than 200 employees — most of whom have been developing self-driving technology for the Volkswagen Group.
As part of the transaction, Volkswagen also will purchase Argo AI shares from Ford for $500 million over three years. Ford will invest the remaining $600 million of its previously announced $1 billion cash commitment in Argo AI.
Argo AI plans to work closely with Ford and Volkswagen to provide the autonomous vehicle technology the automakers 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.
“The announcement between Ford and VW speaks to two main issues. One, we continue to head towards an autonomous future, and big and small companies alike are scrambling to be ready for this future. And two, as automotive becomes more and more complex, the necessity for partnerships and alliances is more important than ever, as one company cannot bankroll the development alone,” said Arkshay Anand, Kelley Blue Book executive analyst. “Partnerships will continue to ramp up in coming years, crossing boundaries most would not have envisioned even 10 years ago.”
“Ford and VW’s alliances collaborating on autonomous vehicles through Argo AI and electric vehicles makes sense. The financial investment into these technologies is immense, with no immediate payback on the horizon, and the engineering talent to develop these technologies is scarce and in high demand,” added Michelle Krebs, Autotrader executive analyst. “Combining forces not only means sharing resources but ultimately achieving scale and global reach that will advance the technologies faster.”