Volkswagen said Friday that it would invest $2.6 billion (€2.3 billion) in autonomous driving company Argo AI as part of an alliance with Ford to share the high risks and costs of developing self-driving, electric vehicles.
The German carmaker said it would invest $1 billion in cash in the Pittsburgh-based company and add its own $1.6 billion-valued autonomous driving unit to the arrangement.
VW’s investment would give it and Ford an equal stake in Argo AI and, together, they will have a majority interest in the company valued at $7 billion.
“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.
The carmakers also said Ford would use VW’s existing electric vehicle technology to develop a fully-electric car for European customers. The Detroit-based manufacturer said it hopes to sell 600,000 electric cars a year starting in 2023.
VW CEO Herbert Diess said the sharing agreement would drive “down development costs for zero-emissions vehicles” and allow for “a broader and faster global adoption of electric vehicles.”
Despite the shared investment in Argo AI, Ford and VW will still compete on the car market
Car and technology companies have teamed up in recent years to remain competitive in the race to develop vehicles that not only drive themselves, but that also meet increasingly stricter emissions requirements in Europe and China.
“One has to invest today to see the first returns maybe in 2030 and there are major new competitors in this space,” Ferdinand Dudenhöffer of Germany’s Center for Automotive Research told the AFP news agency.
VW and Ford’s latest collaboration comes after both firms said in January that they would work together on developing vans and pickup vehicles.
Speaking on Friday, VW CEO Diess said the companies were “continuing to look at other areas on which we might collaborate.”
- Confusion Between Self-Driving Cars and Driver-Assistance Systems Is Still Rampant: Study
- This is Volkswagen’s €44bn electric car plan
- Uber halts development of self-driving trucks
- Apple Legend Steve Wozniak: Self-Driving Cars Aren’t Coming Anytime Soon
- Tesla Is Still Using the Phrase 'Full Self-Driving' to Describe Its Cars Even Though It's Wrong
- The super-fast electric car charging network coming to Europe
- BRABUS Creates First Tuner Tesla Roadster, Mates Star Trek Sound Effects To Electric Car
- Uber safety driver was watching The Voice before self-driving car hit pedestrian
- Addison Lee plans to put self-driving cabs on London's streets by 2021
- Former Waymo And Uber Self-Driving Guru Anthony Levandowski Charged With Federal Crimes
- Deadly crash raises questions about Uber self-driving system
- The incredible performance capabilities of electric cars