Ford and VW rev up electric vehicle venture

News Ford, Volkswagen to hold news conference about global alliance 1:12 PM, Jul 11, 2019

Ford-VW alliance over electric vehicles seen upping pressure on other carmakers

VW CEO Herbert Diess and Ford CEO Jim Hackett discussed the new alliance at a press conference in NY.

Hackett commented on the partnership stating: "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".

Credit Suisse said an an expanded alliance between the two companies could combine VW's strength in EVs with Ford's in autonomous vehicles, allowing both to "address these challenges in a more capital-efficient manner".

Ford expects to build more than 600,000 electric vehicles in Europe over six years, sourcing components and the vehicle underpinnings from VW, helping both to cut costs.

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Ford may leverage its access to VW's electric-car architecture to comply with stricter European emissions rules.

Honda Motor Co previous year joined forces with General Motors Co to develop autonomous vehicles by investing $2.75 billion in GM's Cruise Automation self-driving vehicle unit. VW will also purchase some Argo AI shares from Ford over three years, bringing the AV subsidiary's total valuation to some $7 billion. (Ford will still complete its billion-dollar investment in Argo AI). Much of the MEB's development cost could be recovered from the revenues generated from Ford. Volkswagen will officially open up use of its MEB scalable electric-vehicle platform, which Ford will use for an all-new EV model that's aimed to go on sale in 2023.

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", VW's chief executive Herbert Diess said today.

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Many automobile companies are joining forces because they're under pressure to develop autonomous vehicles and smartphone-enabled transportation services. "We will share updates as details become more firm", a Ford spokeswoman said in a statement.

Back in January when the alliance was first made public, it was with news that Ford will begin using one of VW's internal combustion vehicle architectures to build light commercial vehicles for markets outside North America.

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

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.

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