Ford, VW in electric car technology deal

Ford, VW in electric car technology deal

Business news |
By Christoph Hammerschmidt

With the move, the carmakers have taken their billion-euro electric car and autonomous driving alliance to the next level as the two partners will share an AI-based platform for autonomous driving. 

The two volume manufacturers intend to share the costs of new developments among themselves and to strengthen each other in times of crisis. “In view of the Covid 19 pandemic and its effects on the global economy, it is of crucial importance to form strong alliances between strong companies,” said Volkswagen CEO Herbert Diess at the signing of the agreement. The cooperation will reduce development costs and also strengthen the worldwide distribution of electric vehicles.

“This creates opportunities for solving global mobility issues – at the same time, companies have to decide carefully how to invest their money. The two companies confirmed that there are no plans for capital interlocking,” said Jim Hackett, CEO of Ford.

The two partners had already announced an expansion of their alliance in July last year. Wolfsburg-based Volkswagen intends to supply its US partner with electric car components on a large scale. The primary aim of the cooperation is to be able to act faster in the market and make new technologies available to customers more quickly. This is especially true for electric mobility. In addition, the two partners expect the cooperation to produce major economies of scale to provide cost savings in development, procurement, production and maintenance.

Ford intends to use the Modular Electric Construction Kit (MEB) to build at least one zero-emission electric car in Europe in large-scale production from 2023. More than 600,000 units are expected to roll off the assembly line in the coming years. Volkswagen estimates the expected additional turnover to be between ten and 20 billion dollars. In addition, talks were already underway at the time to conclude a new supply contract for a second vehicle. Ford’s electric car on this platform is to be developed and designed at the company’s German headquarters in Cologne.

Next: Autonomous electric car plans

As part of the deal both manufacturers will be able to use Argo AI’s Self-Driving System (SDS) independently of each other for their own self-driving vehicles. Volkswagen completed an investment in Argo AI as recently as last week. Ford already holds ownership and development shares in the Pittsburgh-based company.

The decision by Volkswagen and Ford to each invest in Argo AI demonstrates, in the view of the two manufacturers, how alliances can ensure the development of breakthrough technologies that require a great deal of time and resources. Argo AI’s SDS is currently the first system for autonomous driving with commercial schedules in both Europe and the USA. Through the global activities of Ford and Volkswagen, Argo AI’s platform achieves the greatest geographic deployment potential of any autonomous technology to date. This is an important factor in developing such a system cost-effectively and successfully.

VW also announced that delivery of the new ID.3 electric car model is now scheduled to start in the first half of September. However, due to delays in the software equipment, the first cars will not yet have the full range of functions. The car is to establish a series of fully electric vehicles, in which Volkswagen will invest billions in the coming years. In 2020, ID.3 is regarded as the central future project of the world’s largest automobile group. However, due to the complexity of IT, there will be subsequent updates.

Related articles:

VW to open its e-car platform to competitors

Ford, Volkswagen in R&D alliance on e-mobility, Artificial Intelligence

VW spends €60 billion for electromobility, digitisation R&D

Reports: Volkswagen struggles with software problems at ID.3

Ford invests massively in AI startup

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