VW, Ford broaden alliance to autonomous, electric vehicles

AP

Print Article

  • Ford CEO Jim Hackett, right, and Volkswagen CEO Herbert Diess participate in a news conference in New York, Friday, July 12, 2019. Volkswagen will sink $2.6 billion into a Pittsburgh autonomous vehicle company that's mostly owned by Ford as part of a broader partnership on electric and self-driving vehicles, the companies confirmed Friday. (AP Photo/Seth Wenig)

  • 1

    Ford CEO Jim Hackett, right, and Volkswagen CEO Herbert Diess participate in a news conference in New York, Friday, July 12, 2019. Volkswagen will sink $2.6 billion into a Pittsburgh autonomous vehicle company that's mostly owned by Ford as part of a broader partnership on electric and self-driving vehicles, the companies confirmed Friday. (AP Photo/Seth Wenig)

  • 2

    Ford CEO Jim Hackett, right, and Volkswagen CEO Herbert Diess participate in a news conference in New York, Friday, July 12, 2019. Volkswagen will sink $2.6 billion into a Pittsburgh autonomous vehicle company that's mostly owned by Ford as part of a broader partnership on electric and self-driving vehicles, the companies confirmed Friday. (AP Photo/Seth Wenig)

  • 3

    FILE - In this Jan. 14, 2019, file photo Ford Motor Co. President and CEO, Jim Hackett, left, meets with Dr. Herbert Diess, CEO of Volkswagen AG, at the North American International Auto Show in Detroit. Ford and Volkswagen are planning to unveil details about their budding alliance to build mobility services and autonomous and electric vehicles. Executives from both companies are planning to reveal details Friday, July 12. (AP Photo/Carlos Osorio, File)

  • Ford CEO Jim Hackett, right, and Volkswagen CEO Herbert Diess participate in a news conference in New York, Friday, July 12, 2019. Volkswagen will sink $2.6 billion into a Pittsburgh autonomous vehicle company that's mostly owned by Ford as part of a broader partnership on electric and self-driving vehicles, the companies confirmed Friday. (AP Photo/Seth Wenig)

  • 1

    Ford CEO Jim Hackett, right, and Volkswagen CEO Herbert Diess participate in a news conference in New York, Friday, July 12, 2019. Volkswagen will sink $2.6 billion into a Pittsburgh autonomous vehicle company that's mostly owned by Ford as part of a broader partnership on electric and self-driving vehicles, the companies confirmed Friday. (AP Photo/Seth Wenig)

  • 2

    Ford CEO Jim Hackett, right, and Volkswagen CEO Herbert Diess participate in a news conference in New York, Friday, July 12, 2019. Volkswagen will sink $2.6 billion into a Pittsburgh autonomous vehicle company that's mostly owned by Ford as part of a broader partnership on electric and self-driving vehicles, the companies confirmed Friday. (AP Photo/Seth Wenig)

  • 3

    FILE - In this Jan. 14, 2019, file photo Ford Motor Co. President and CEO, Jim Hackett, left, meets with Dr. Herbert Diess, CEO of Volkswagen AG, at the North American International Auto Show in Detroit. Ford and Volkswagen are planning to unveil details about their budding alliance to build mobility services and autonomous and electric vehicles. Executives from both companies are planning to reveal details Friday, July 12. (AP Photo/Carlos Osorio, File)

NEW YORK (AP) Volkswagen will sink $2.6 billion into a Pittsburgh autonomous vehicle company that's mostly owned by Ford as part of a broader partnership on electric and self-driving vehicles, the companies confirmed Friday.

The two automakers will become equal owners of Argo AI, a robocar firm that was majority-owned by Ford, with plans to put autonomous vehicles on the roads in the U.S. and Europe.

The deal also includes a plan for Ford to use VW's modular electric vehicle underpinnings to build zero-emissions cars for the European market starting in 2023.

The tie-up has been in the works for months and is another in a long string of industry partnerships as auto companies and tech firms try to spread the enormous costs of developing self-driving and electric vehicles. Neither company will hold a stake in the other.

"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," Ford CEO Jim Hackett said in a prepared statement.

The VW investment includes $1 billion in cash and the $1.6 billion value of VW's 200-person autonomous intelligent driving company. Ford already has committed to putting $1 billion into Argo, which the companies now value at $7 billion. It already has invested $400 million. VW also will buy $500 million worth of Argo stock over the next three years.

VW's autonomous unit will become Argo's development center in Munich, the companies said.

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. The company hopes to sell 600,000 of them over six years. VW, the world's largest automaker measured by sales, already has invested $7 billion in the new platform, which it plans to use to build 15 million electric vehicles worldwide in the next decade.

The electric vehicle cooperation will help reduce development costs and make battery-powered vehicles available faster across the globe, VW CEO Herbert Diess said in a statement. "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 Ford-VW alliance vaults Argo into one of the highest-valued autonomous vehicle development companies in the world. It's also another in a series of investments, purchases and partnerships between auto and tech companies as they develop new technology while they are still cranking out vehicles powered by internal combustion engines.

In May, a group of internal institutional investors sank $1.15 billion into GM Cruise LLC, the autonomous vehicle unit of Ford's main competitor, General Motors. Cruise already had attracted investments from Honda and Japan's SoftBank and is valued by the companies at around $19 billion.

Also this year, Ford said it would invest $500 million in U.S. electric vehicle startup Rivian, while Fiat Chrysler is in talks to produce self-driving commercial vehicles with startup Aurora. FCA also is selling vans to Google autonomous vehicle spinoff Waymo, which is negotiating a partnership with the Renault-Nissan alliance.

Chip maker Intel bought Israeli self-driving technology firm Mobileye for about $15 billion in 2017, while ride-hailing company Uber joined with Toyota to build autonomous vehicles last year.

Jessica Caldwell, executive director industry insights for the Edmunds.com auto pricing site, said the deal should help both companies and is an example of what's needed in the business to share enormous capital costs.

"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," she said. "The combination of these two massive automakers is exactly what needs to happen to accelerate the adoption of AV and EV technology." Edmunds provides content for The Associated Press.

Shares of Ford rose 1.6 percent in early trading Friday.

The two companies announced plans in January to collaborate on developing commercial vans and medium-sized pickup trucks while exploring electric and autonomous vehicles together. They said Ford would develop larger vans and pickups while Volkswagen would develop a smaller van for crowded cities.

Many automobile companies are joining forces because they're under pressure to develop autonomous vehicles and smartphone-enabled transportation services. They're competing with companies such as Waymo and Uber to launch the technology. They're also under pressure to release electric vehicles in markets such as China and Europe to meet tougher pollution limits.

____

Krisher reported from Detroit.

  

Print Article

Read More National News

Mueller takes the TV stage; Democrats hope America tunes in

AP

July 23, 2019 at 4:47 pm | WASHINGTON (AP) Democrats are pretty sure America didn't read the Mueller report. On Wednesday, they're hoping the nation will be glued to the TV version. Former Trump-Russia special counsel Ro...

Comments

Read More

Deadly 2018 Amtrak crash caused by safety oversights, delays

AP

July 23, 2019 at 1:50 pm | COLUMBIA, S.C. (AP) Federal safety officials ruled Tuesday yet another fatal train crash in the United States has been caused by easy-to-fix human errors. The National Transportation Safety Boa...

Comments

Read More

Southern California nest cam eagle flies for 1st time

AP

July 23, 2019 at 4:07 pm | BIG BEAR LAKE, Calif. (AP) A young bald eagle that the public watched hatch online in a Southern California mountain nest has finally made its first flight. San Bernardino National Forest spoke...

Comments

Read More

BC-US--Back to School-Man Sentenced,1st Ld-Writethru, US

AP

July 23, 2019 at 3:58 pm | AP Photo TXDAM303, TXDAM301, TXDAM300, TXDAM302...

Comments

Read More

Contact Us

(208) 664-8176
215 N. Second St
Coeur d'Alene, Idaho 83814

©2019 The Coeur d'Alene Press Terms of Use Privacy Policy
X
X