Source: AutoVerdict
July 12, 2019
by Nick Saporito

Volkswagen AG and Ford Motor Company have announced an alliance regarding electric vehicles and autonomous driving technology, broadening an already-announced alliance between the two automakers. Despite the deeper partnership, the alliance does not include equity stakes. The alliance was announced today by Volksagen AG CEO Herbert Diess and Ford Motor Company President and CEO Jim Hackett.*

On the product front, today's announcement confirms Ford will leverage Volkswagen's*Modular Electric Toolkit (MEB) architecture to produce a high-volume battery-electric vehicle for the European market. Ford is not disclosing details of this vehicle, other than hinting that it will be a crossover utility and will arrive on the European market in 2023.*

Ford says it plans to deliver more than 600,000 vehicles to European customers utilizing the MEB architecture. A second vehicle based on MEB is also under discussion, but has not been fully approved for production.*

Volkswagen began developing the MEB architecture back in 2016 and has invested more than $7 billion into the architecture. MEB is slated to underpin most of Volkswagen's future products.

Our global alliance is beginning to demonstrate even greater promise, and we are continuing to look at other areas on which we might collaborate,” Diess said. “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.”

In addition to a collaboration on electric vehicles, Volkswagen and Ford have also announced a $2.6 billion investment from Volkswagen into Argo AI. Ford currently owns a majority stake in Argo AI, the company that is developing self-driving technology for Ford vehicles.*

Argo AI says it plans to remain focused on developing SAE Level 4 autonomy, but will offer distinctions for the unique needs of both Ford and Volkswagen.*

The Volkswagen's additional equity, both automakers will own an equal stake in Argo AI. A remaining portion of equity will be utilized for incentive compensation to Argo AI employees.*

“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,” 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.”

Along with today's announcement, the two automakers offered an update on their previously announced alliance regarding commercial vehicles. The two say they are on track to bring medium pickups to market in 2022, followed by new commercial vans.*

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