Ford & Volkswagen are extending their partnership to share costs in developing of electric & autonomous vehicles. The deal includes investments in Argo AI. The two carmakers first announced their collaborative efforts for medium trucks and commercial vans in January.
Volkswagen AG and Ford Motor Company announced the next stage in their shared mission to develop autonomous and electric vehicles today. The two automotive giants are doubling down on Argo AI, a Pittsburgh, Pennsylvania-based artificial intelligence company backed by Ford.
The agreement calls for Volkswagen to invest $2.6 billion in Argo AI and also purchase shares in the startup from Ford for $500 million over three years, according to an official press release. Part of the investment includes Volkswagen’s own Autonomous Intelligent Driving (AID) company, which will be absorbed into Argo AI. The AID headquarters in Munich, Germany will house Argo AI’s new European headquarters.
Ford will continue to invest the remaining amount of its $1 billion commitment to Argo AI into the company. Ford and VW will have equal an equal stake in Argo AI and together will be majority shareholders.
“We founded Argo AI to tackle one of the most challenging applications in computer science, robotics and artificial intelligence — self-driving vehicles,” Argo AI co-founder and CEO Bryan Salesky wrote in the company blog. “And we did this because we strongly believe the technology can benefit society by improving the freedom of movement at all levels of society. Our partnerships with Ford and Volkswagen are extraordinarily valuable in helping us achieve our mission.”
No human intervention needed
Argo AI aims to deliver a SAE Level 4-capable self-driving system (SDS) to ride sharing and commercial applications in urban areas. Level 4 autonomous cars can complete an entire journey unassisted, from departure to parking at the destination. Backup systems help prevent incidents and a human driver can take over, but the car can attempt to pull over and come to a safe stop if needed. These vehicles are usually restricted to certain geographic areas and limited in speed.
Built to scale
Volkswagen and Ford are among the biggest carmakers on the planet, giving a wide-reaching platform for the deployment of new technologies. The companies will independently utilize the self-driving systems into vehicles developed specifically to use it.
“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. “Unlocking the synergies across a range of areas allows us to showcase the power of our global alliance in this era of smart vehicles for a smart world.”
Ford will also be the first car manufacturer to use Volkswagen’s electric vehicle platform, the Modular Electric Toolkit (MEB) to mass produce electric vehicles for Europe by 2023. Ford is aiming to deliver more than 600,000 MEB vehicles over six years.
Volkswagen began development of its MEB architecture in 2016 with a $7 billion investment. The German automaker will build 15 million vehicles on the MEB platform in the next decade. The MEB sharing deal is independent of the Argo AI deal.
Level 4 autonomous cars can complete an entire journey unassisted, from departure to parking at the destination
“Looking ahead, even more customers and the environment will benefit from Volkswagen’s industry-leading EV architecture,” VW CEO Dr. Herbert Diess 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. Scaling our MEB drives down development costs for zero-emissions vehicles, allowing for a broader and faster global adoption of electric vehicles. This improves the positions of both companies through greater capital efficiency, further growth and improved competitiveness.”
Volkswagen and Ford broke the news on their collaboration in January. Initial plans call for Ford to engineer and build medium trucks and large commercial vans for both companies, while Volkswagen builds city vans. These vehicles will complement Ford’s existing Transit and Ranger model lines and the Volkswagen Transporter, Caddy, and Amorak. If all goes well, the vehicles should be put to work on the streets in 2022.
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