Ford Confirms Expansion Of Autonomous Driving Initiative With Volkswagen

U.S.-based automaker Ford Motor Company F and German counterpart Volkswagen AG announced Friday an expansion of their global alliance to include autonomous driving and electric vehicles. The Detroit News first reported on the partnership Wednesday night.

What Happened

Ford and Volkswagen formed an alliance earlier this year to develop commercial vans and medium-sized pickups. As part of the expansion, Volkswagen will join Ford and invest in Argo AI, an autonomous vehicle platform company to independently integrate the self-driving system into their own vehicles.

Argo AI's mission is to deliver a Level four-capable self-driving system (SDS) that can be used for ride sharing and delivery of goods within dense urban areas, the companies said.

Ford and Volkswagen will assume an equal stake in Argo AI and the combined ownership will represent a majority of shares.

The automakers also announced Ford will use Volkswagen's dedicated electric vehicle architecture and Modular Electric Toolkit (MEB) to achieve a high-volume and zero-emission car in Europe in 2023

Why It's Important

Ford and Volkswagen remain competitors in the global auto marketplace but there is still reason to join forces, Ford President and CEO Jim Hackett said in the press release. By teaming up together the two companies will each be able to "deliver unmatched capability, scale and geographic reach."

Similarly, Volkswagen CEO Dr. Herbert Diess said the partnership will improve both companies "through greater capital efficiency, further growth and improved competitiveness."

The expanded alliance doesn't involve any cross-ownership investments between the two automakers but is expected to generate annual efficiencies for each company. The deal also remains subject to regulatory approvals and closing conditions.

Ford's stock traded about 1% higher to $10.28 Friday morning.

Related Links:

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Ford courtesy photo by Sam VarnHagen.