Diess said the alliance would help his company drive down its costs in developing zero-emissions electric vehicles.
The need for cost-sharing partnerships is underlined by the current downturn in vehicle sales and predicted changes to ownership models as new technologies are proven. $1 billion will come from funding, while the remaining $1.6 billion will come in the form of VW's Autonomous Intelligent Driving (AID) company, which has more than 200 employees and has been responsible for self-driving-car development for the VW Group.
"Unlocking the synergies across a range of areas allows us to showcase the power of our global alliance in this era of smart vehicles for a smart world". Ford already has committed to putting $1 billion into Argo, which the person says is now valued at $7 billion. VW and Ford have announced today that VW will be investing in Ford's autonomous auto division Argo AI. As previously reported, Volkswagen plans to use it to launch nearly 70 new electric models and build approximately 22 million electric cars in the next decade. Several media reports, however, indicated that Volkswagen would share its proprietary electric vehicle platform with Ford.
Ford president and CEO Jim Hackett speaks as Volkswagen CEO Herbert Diess looks on during a news conference in New York City about the two companies' joint EV and self-driven vehicle plans.
In a news release, the German automaker says it has invested $7 billion into the Modular Electrical Toolkit (MEB) since it started working on the architecture back in 2016.
Teaming up with its USA peer is one of the key initiatives of VW Chief Executive Officer Herbert Diess to overhaul the German industrial giant.
One of the biggest challenges in getting more consumers to buy electric cars is to bring prices down to make them more affordable even without tax credits. "We're the first self-driving company with definitive deployment plans in both the United States and Europe".
Ford will also use VW's electric-vehicle design to build at least one high-volume, fully electric vehicle for its European customers starting in 2023. "This improves the positions of both companies through greater capital efficiency, further growth and improved competitiveness". The best deal that Ford could get was an investment in future technology.