Ford and VW go electric and autonomous together
Ford and Volkswagen are going to collaborate in two crucial domains: autonomous driving and electrification. A merger or financial fusion (even partly) is not on the agenda. Both companies stay entirely independent.
Given the significant investments the transition to electrification and autonomous driving are demanding, car manufacturers are condemned to work together. They seek the most logical collaborations, mostly in fields where the partner is already more advanced or where scale is essential.
Ford and VW were already collaborating in the field of light commercial vehicles; now, they are going for the next step. They’re not the only ones, recently BMW and Daimler commented on their comparable collaboration after they already worked out deals regarding new mobility solutions.
Argo AI is a start-up based in Pittsburgh (US) working on autonomous driving technology. Ford has already massively invested in it, and now the VW Group is going to invest 2,6 billion dollars in it. One billion directly, 1,6 billion indirectly by integrating its AID (estimated worth 1,6 billion) in Argo.
Autonomous Intelligent Driving (AID) is the Audi daughter specializing in autonomous driving and employs 200 people located in Munich. AID will now become the European branch of Argo, already employing 700 people all over the world.
With the mutual support of Ford and VW, Argo will grow considerably. They both become minority shareholders in Argo, as are the founders Bryan Salesky and Peter Rander. A group of other employees also are essential shareholders.
Argo AI is most active in the sector of robotized taxis, an important field in autonomous driving because many analysts think that the first autonomous cars on the road will be those self-driving taxis. Argo will become a severe competitor for Waymo (Alphabet/Google) and Cruise Automation (General Motors).
On the electrification side of the equation, Volkswagen is the company with the lead. It had already announced that it wished to share the technology of its dedicated electric platform (MEB) with others, even outside the VW Group.
Ford is one of the first to react to this. It is going to use the MEB platform for its own electric car(s) in Europe. The vehicle(s) will be further developed in Ford’s Merkenich R&D center (near Cologne, Germany). The car(s) should be on the road in 2023. The objective is to sell 600.000 cars already before 2025, maybe with different models.
The Ford/VW collaboration was announced in New York by the two big bosses of the company, Jim Hackett for Ford and Herbert Diess for VW Group. “Our global alliance starts to get even more promising,” said Diess in South Manhattan. “We continue to look for other possible sectors of collaboration.”
No fusion plans
An ever-increasing collaboration doesn’t mean both companies are thinking of financial intermingling or a merger. Probably they are also slightly scared by what happened with Daimler and Chrysler, by the difficulties between Renault and Nissan in the Alliance, and by the failed fusion of Renault/FCA.
Just now, Ford is facing difficult times in Europe. It has recently announced the closing of factories and the licensing of 12.000 employees (in total) in Europe and is very happy to jump on the electric bandwagon with the aid of VW. It can also indirectly profit from the critical presence of VW in China.
On the other hand, Volkswagen can write off the considerable investments in electrification and its MEB platform more quickly and develop it further because of the economies of scale. Ford can also help to re-introduce VW on the North-American market, where the group has enormously suffered (financially and image-wise) from the dieselgate scandal.
Volkswagen sees its MEB platform as a driving software center. In the future, MEB will have a permanent online connection. That way it can accept software updates and be improved during the whole life-cycle.
An MEB car owner will even be able to order temporary extras. For example, some extra power when he wants to go on holiday with the entire family or some extra functions in the entertainment system.