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Ford and VW have already started cooperating in the area of
commercial vehicles as part of the auto industry's broader
effort to redraw production and sales footprints to cope with
more stringent regulation and fragmented markets.
VW will invest $2.6 billion into Argo AI, Ford's self-driving
cars venture, and Ford will build an electric car using VW's MEB
electric vehicle platform, the companies 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," VW's Chief Executive Herbert Diess said
on Friday.
Ford expects to build more than 600,000 electric vehicles
sourcing components and the vehicle underpinnings from VW,
helping both companies to drive down costs.
Analysts at Citi said Ford licensing Volkswagen's MEB platform
is a "transformational" step for both companies.
"It likely provides VW with an unassailable scale advantage,"
Citi analyst Angus Tweedie said in a note published on July 10.
VW will become an equal stakeholder in Ford's autonomous
vehicles venture.
The broader alliance, which covers collaboration beyond joint
investments in Argo AI, does not entail cross-ownership between
the two companies.
Ford created Ford Autonomous Vehicles LLC in 2018, pledging to
invest $4 billion until 2023 and has sought outside investors to
help share the spiraling cost of developing autonomous vehicles.
Volkswagen will contribute its Autonomous Intelligent Driving
(AID) company to the venture. VW will purchase Argo AI shares
from Ford for $500 million over three years.
(Reporting by Edward Taylor; Editing by Michelle Martin)
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