Two of the world’s biggest car makers, Volkswagen and Ford, have moved their existing commercial partnership up a gear this afternoon to collaborate on electric cars and self-driving cars.
The firms are looking to pull ahead of the global auto industry in commercialising both technologies.
Volkswagen will pour $2.6bn (£2.07bn) into Argo AI, a driverless tech startup which Ford already backs. The deal will value the startup at $7bn, and will enable Volkswagen to test self-driving cars on European tarmac.
Meanwhile, Ford will use Volkswagen’s electric car production system to produce a mass market electric model in the US. Volkswagen spent around $7bn developing the system, in the hope it could sell it to rivals.
Both companies said they would share the considerable research and development costs associated with commercialising the technologies.
Volkswagen CEO Herbert Diess said the Argo AI partnership would help the firms “share significant research and development costs, in the high triple digit millions”.
He added Volkswagen would release a vehicle using Argo systems “in the early 2020s”.
Ford chief executive Jim Hackett said: “While Ford and Volkswagen remain independent and fiercely competitive in the marketplace, teaming up with Argo AI on this important technology allows us to deliver unmatched capability, scale and geographic reach.”
Race to the top
Tesla has been the first high-profile car maker to commercialise electric cars and self-driving tech on the roads. However, traditional automotive giants are hot on its heels.
Hackett said: “If the tech revolution has taught us anything, it’s this: There are only going to be a few winners who create the platforms for the future.”
Furthermore, it is “not about being first, it’s about being the best,” he added.
The deal makes Argo AI “the largest platform working on this anywhere in the world,” he said.
Ford has fallen behind others to integrate electric vehicles into its line up of models. This looked set to pose it issues in the European Union. The bloc is due to impose strict new emissions rules in the coming years. But the partnership will help the US car maker meet the regulations.
“Our global alliance is beginning to demonstrate even greater promise, and we are continuing to look at other areas on which we might collaborate,” said Diess.
All images: Getty