(Reuters) – Ford Motor Co and Volkswagen AG (VOWG_p.DE) said on Thursday they are expanding their global alliance announced in January with deals that are expected to involve collaboration on electric and autonomous vehicles.
FILE PHOTO – The Ford logo is pictured on the company’s stand during the 88th Geneva International Motor Show in Geneva, Switzerland, March 7, 2018. REUTERS/Denis Balibouse
The two companies are expected to announce further details on an agreement to share electric and autonomous car technologies at a press and investor conference in New York on Friday. They said Volkswagen Chief Executive Herbert Diess and Ford Chief Executive Jim Hackett would appear together, but provided no additional information in a news release.(bit.ly/2LP9TjA)
The automakers could outline more than one agreement. One potential element could be an investment by Volkswagen in Argo AI, the self-driving vehicle systems company majority owned by Ford.
Ford created Ford Autonomous Vehicles LLC in 2018, pledging to invest $4 billion until 2023. It has sought outside investors to help share the spiraling cost of developing autonomous vehicle technology.
Pittsburgh-based Argo AI, a start-up bought by Ford in 2017, is part of that unit.
Volkswagen and Ford have been discussing for months how to share the burdens of investing in future electric and autonomous vehicles. The apparent agreement between the two global manufacturers is the latest sign of how pressure to cut carbon emissions and fend off challengers from the technology industry is driving consolidation in the auto industry.
Rather than continue developing their own, proprietary technology, automakers are sharing vehicle components and technologies.
As with Ford and VW, much of this sharing is happening without outright takeovers and mergers.
Honda Motor Co last year joined forces with General Motors Co to develop autonomous vehicles by investing $2.75 billion in GM’s Cruise Automation self-driving vehicle unit. Alphabet’s Waymo has agreements with Fiat Chrysler Automobiles and Jaguar Land Rover [TAMOJL.UL] to buy and equip vehicles with its self-driving systems.
Analysts at Citi said Ford licensing Volkswagen’s MEB platform is a “transformational” step. “Not only does it likely further de-risk VW estimates in 2020 by guaranteeing some profits from electric vehicles next year, but also likely provides VW with an unassailable scale advantage in the market with it potentially producing around 400,000 battery electric vehicles in Europe next year,” Citi analyst Angus Tweedie said in a note published on July 10.
VW signed a deal in March to develop a pickup truck using a Ford platform, and the carmakers have been in talks about extending the alliance to include autonomous driving and mobility services, as well as Ford’s use of VW’s MEB electric-vehicle platform.
In June, Volkswagen ended its partnership with software firm Aurora only days after the self-driving software start-up firm announced an alliance with FiatChrysler.
Reporting by Rachit Vats in Bengaluru; Editing by Shounak Dasgupta and Dan Grebler