Ford, Volkswagen to broaden global alliance

Argo AI modified Ford Motor Co. Fusion autonomous vehicle sit parked in a garage at the company's headquarters in Pittsburgh Pennsylvania U.S. on Thursday Aug. 16 2018

Argo AI modified Ford Motor Co. Fusion autonomous vehicle sit parked in a garage at the company's headquarters in Pittsburgh Pennsylvania U.S. on Thursday Aug. 16 2018

Ford is scheduled to debut a Mustang-inspired electric performance SUV next year, followed by an electric F-150, a model built through a $500 million partnership with startup electric vehicle outfit Rivian and its own modular zero-emissions that should spawn several auto and utility models.

The move deepens a global alliance aimed at slashing development and manufacturing costs. Neither company will hold a stake in the other. The two carmakers will remain independent and competitive in the marketplace, but the joint venture on Argo allows them to "deliver unmatched capability, scale and geographic reach", according to Ford CEO Jim Hackett.

Volkswagen will contribute its Autonomous Intelligent Driving (AID) company to Argo, which will boost the self-driving unit's employees to 700 from 500.

Ford has already spent $1 billion to acquire Argo AI, which is focused on Level 4 autonomy, albeit in geofenced areas with well marked roads and in reasonably good weather conditions. It already has invested $400 million.

On top of this, Ford and VW are looking to share investments in vehicle architecture, commercial vans, medium-size trucks and larger commercial vans for Europe. A second model is also under discussion, the companies said.

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Also under the deal, Ford will use VW's new modular electric vehicle underpinnings to build zero-emissions vehicles for the European market starting in 2023. Much of the MEB's development cost could be recovered from the revenues generated from Ford. "Our global alliance is beginning to demonstrate even greater promise, and we are continuing to look at other areas on which we might collaborate", he said.

The agreement is the latest example of once fierce industry rivals joining up to develop new technologies. This brings the total investments into the autonomous company up to more than $7 billion. FCA also is selling vans to Google autonomous vehicle spinoff Waymo, which is negotiating a partnership with the Renault-Nissan alliance.

"The auto industry, in the past we've been criticized for a lack of interest in working together, and what you're seeing with Volkswagen and Ford is a commitment to doing that on a number of projects", said Joe Hinrichs, president of automotive for Ford.

"Ford has taken flack for years for not having a robust EV strategy and VW has had its own fair share of challenges, but this can help both companies reinvent themselves as innovative technology leaders", said Jessica Caldwell, executive director industry insights for Edmunds.com.

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