Vw Ford Agreement

Michelle Krebs, senior analyst at Cox Automotive, said the deal was smart “because the development of electric vehicles and autonomous vehicles is expensive.” She said car manufacturers believe they are able to share development costs and reduce risks associated with technologically advanced products that do not yet have the necessary quantities to support the investments needed to start up. Volkswagen has agreed to invest $2.6 billion in cash and other resources in Argo AI, a Ford-backed start-up that works on sensors, software and other technologies to allow cars to drive on their own. Volkswagen will convert its Munich-based autonomous vehicle project in Argo with 200 employees. The deal puts Argo at $7 billion. Volkswagen said it would use Ford`s U.S. sites to build certain vehicles for the North American market, and while there may be joint production, Fordhackett stressed that it does not plan to downsize the company following the Ford-VW deal. Ford and the Volkswagen Group have announced a cooperation agreement for the development of middle-class pickup trucks and pickups. The two automotive giants will also look for ways to work together in the development of electric and autonomous vehicles, with a view to achieving cost savings on both sides. As in their previous agreement on mid-range pickup trucks and pickups, the two automakers` expansion partnership will have the greatest impact on vehicles and platforms offered outside North America, the companies said. FRANKFURT/DETROIT — Ford Motor Co. and the Volkswagen Group have reached a framework agreement on the sharing of electric and autonomous automotive technologies and have developed their alliance beyond commercial vehicles, a source familiar with the matter said. The agreement calls for Volkswagen to take a stake in a Start-up backed by Ford, which develops autonomous technologies, and ford takes the components of electric cars developed by Volkswagen.

In a separate agreement, Ford plans to build electric cars based on engines, batteries and other standardized components developed by Volkswagen and used in a model called ID.3, which expires next year. Volkswagen said the car is sold for less than 30,000 euros in Europe or $34,000, making battery-powered transport more accessible to middle-income buyers. As part of the deal, Ford will produce a utility car and a mid-size pickup for itself and for Volkswagen, possibly starting in 2022. Ford spokesman Mike Levine said Ford Ranger (the version sold on the international market) will be the base for the pickup, while the pickup will be derived from the U.S. automaker`s Transit Custom van, which is sold in other markets. Both Ford and Volkswagen say the deal could result in significant operating savings as early as 2023. The link between VW and Ford is also expected to include an investment in Ford`s standalone subsidiary, Argo AI, Bloomberg reported last month. Such a partnership could compete with Google`s subsidiary Waymo and General Motors` cruise unit in ambition and scale.

Ford and VW discussed an approximate valuation for Argo of $4 billion, a person familiar with their thoughts told Bloomberg in February. As car sales slump around the world, hard-hit automakers have little choice but to join forces to fend off Silicon Valley challengers and avoid aging. According to the source, VW will share its MEB electric vehicle platform with Ford. But Volkswagen and Ford, which already collaborate on commercial vehicles and pick-up trucks, must show that they can avoid power struggles between executives and engineers that have doomed many other alliances to failure.