It’s finally official; Ford will produce a battery-electric vehicle based on VW’s MEB platform in its Cologne factory in Germany while VW will invest $2.6 billion in Ford’s Argo AI self-driving unit.
The two car makers have agreed on expanding their global alliance after months of negotiations, and were announced earlier today during a live press conference in New York.
Ford is going to use VW’s EV-specific MEB architecture for an all-new electric car targeted for the European market. The company expects to sell over 600,000 vehicles based on the MEB platform in Europe over the course of six years, starting in 2023.
The German carmaker has invested $7 billion in its MEB architecture since 2016, aiming to use it in around 15 million cars across its VW, Audi, Skoda and Seat brands. The first model to use it will be the VW ID.3, set for a full reveal at the Frankfurt Motor Show this September. Ford said that it’s currently negotiating a second MEB-based EV model.
VW on the other hand will invest $2.6 billion in Argo AI, with $1 billion being direct funding. The agreement will turn VW’s own Autonomous Intelligent Driving unit (AID) into Argo’s new European headquarters. The AID is currently valued at $1.6 billion and employs around 200 people. With the new agreement, Argo AI will have over 700 employees globally.
VW will buy $500 million of Argo AI shares from Ford over the next three years, making them equal partners at the self-driving technology company. The deal will raise the value of Argo AI to $7 billion. Argo AI is currently working on the development of a Level 4 autonomous-driving system.
“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,” Ford CEO Jim Hackett said. “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.”
“Scaling our MEB drives down development costs for zero-emissions vehicles, allowing for a broader and faster global adoption of electric vehicles,” added VW CEO Herbert Diess. “This improves the positions of both companies through greater capital efficiency, further growth and improved competitiveness.”