Volkswagen and Ford will help each other on the electric car

Volkswagen and Ford will help each other on the electric car

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Ford and Volkswagen are expanding their alliance, initially dating from January, for the development of autonomous and electric cars. Volkswagen announced plan to invest 2.6 billion dollars in Argo AI, the subsidiary of Ford focused on the development of autonomous cars. This investment will be split between $1 billion pure financial contribution and the integration of AID, the autonomous car department of VAG, within Argo AI. This should allow, according to the two players, to value Argo AI more than 7 billion dollars. The two manufacturers will be equal shareholders in Argo, since VW will buy $500 million of shares over the next three years, while Ford will inject the promised 600 million to the start-up, in which the brand had already invested $1 billion.

At the beginning of the year, a partnership was the headline of the trade press: the one concludes between Ford and Volkswagen. Subject to numerous rumors, this alliance was first concluded with the aim of sharing the respective expertise of the two manufacturers in the field of utilities, and more specifically pick-ups. A few months later, relations between the two partners still seem to be good, and projects are multiplying, as just announced by the US news agency Reuters.

If everything seems on track, nothing is yet final, as it will still await the decision of the supervisory board of the Volkswagen Group so that the partnership can truly advance. However, according to a spokesman for the German manufacturer, discussions with Ford are going very well. The goal would obviously be for both brands to benefit from their respective knowledge, while achieving significant savings, but also to make a response to China.

This partnership should therefore be an opportunity for both brands to reduce their development costs, a particularly important expense for both, moving away from the leaders of profitability as its Suzuki, BMW and Toyota. On the side of Volkswagen, this alliance should allow it to find a place in the North American market, largely dominated by local brands, including Ford, leader in the pickup segment.

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She is the Managing Editor for in-depth discussions and analysis as well as breaking news at Markets Morning. She works closely with Editor-in-Chief Zac Berry on content and publishing initiatives for the site. Brianna Clemons has worked as a financial journalist and editor since 1997. She lives in Bucks County, PA, with her husband, four young children and one dog.

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