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VW, Ford cooperate on self-driving cars

Alexander Pearson
July 13, 2019

Volkswagen is investing billions in a company partially owned by Ford that develops technology for self-driving cars. VW chief Herbert Diess didn't rule out deepening the two companies' alliance in the future.

https://p.dw.com/p/3M0tu
VW and Ford logos

Volkswagen said Friday that it would invest $2.6 billion (€2.3 billion) in autonomous driving company Argo AI as part of an alliance with Ford to share the high risks and costs of developing self-driving, electric vehicles.

The German carmaker said it would invest $1 billion in cash in the Pittsburgh-based company and add its own $1.6 billion-valued autonomous driving unit to the arrangement.

VW's investment would give it and Ford an equal stake in Argo AI and, together, they will have a majority interest in the company valued at $7 billion.

Read more: China is most important battleground for carmakers

"While Ford and Volkswagen remain independent and fiercely competitive in the marketplace, teaming up and working with Argo AI on this important technology allows us to deliver unmatched capability, scale and geographic reach," Ford CEO Jim Hackett said.

Electromobility - a viable alternative?

The carmakers also said Ford would use VW's existing electric vehicle technology to develop a fully-electric car for European customers. The Detroit-based manufacturer said it hopes to sell 600,000 electric cars a year starting in 2023.

VW CEO Herbert Diess said the sharing agreement would drive "down development costs for zero-emissions vehicles" and allow for "a broader and faster global adoption of electric vehicles."

Jim Hackett (R), president and chief executive officer, Ford Motor Company, and Herbert Diess, chief executive officer, Volkswagen Group,
Despite the shared investment in Argo AI, Ford and VW will still compete on the car marketImage: AFP/J. Eisele

Read more: Daimler and Geely team up to build Smart cars in China

Car and technology companies have teamed up in recent years to remain competitive in the race to develop vehicles that not only drive themselves, but that also meet increasingly stricter emissions requirements in Europe and China.

"One has to invest today to see the first returns maybe in 2030 and there are major new competitors in this space," Ferdinand Dudenhöffer of Germany's Center for Automotive Research told the AFP news agency.

VW and Ford's latest collaboration comes after both firms said in January that they would work together on developing vans and pickup vehicles.

Speaking on Friday, VW CEO Diess said the companies were "continuing to look at other areas on which we might collaborate."

Google's Waymo teams up with Jaguar to develop driverless cars

Read more: Germany to invest €58 billion in electric, autonomous cars

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