Volkswagen and Ford have had a very good alliance throughout the years, and they are set to extend it with a multi-billion agreement to plan driverless and electric vehicles together.
The details of this technology-sharing agreement between the two car giants were revealed during a press conference in New York.
In this move, Volkswagen will invest a massive €2.3 billion in Argo AI, an autonomous vehicle technology business, that is mostly owned by Ford. Argo AI now has a value of around €6.2 billion.
This deal will allow the two carmakers to independently integrate and implement Argo AI’s self-driving system into their own vehicles.
The agreement also stated that Ford will become the first competitor in the market to be allowed to make use of Volkswagen’s electric vehicle technology in at least one of its product lines from the start of 2023.
The alliance had already formed an agreement earlier on the year in May, to start developing commercial vans and pickups jointly starting from 2022.
The two firms stated that this alliance will allow the two companies to be much more efficient annually, with current Ford president and chief executive Jim Hackett stating that “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.”
To add to Mr Hackett’s comments, Volkswagen chairman Dr Herbert Diess said “Our global alliance is beginning to demonstrate even greater promise, and we are continuing to look at other areas on which we might collaborate.”
Dr Diess also pointed out that by sharing Volkswagen’s electric technology with Ford, the two companies would help to lower the costs incurred in the development of zero-emissions vehicles greatly, whilst also allowing the vehicles to become more popular globally.
This comes after Volkswagen have invested plenty of funds in electric technology, after the dieselgate scandal that hindered them during 2015, which costed the company around €26.6 billion.
Throughout the last couple of years, several carmakers have joined up with others in order to be the most innovative when it comes to autonomous technology, as such partnerships help spread the cost and thus minimise it. This include Honda’s recent alliance with General Motors and Google, thus becoming an ally with global car-making giants Toyota.