Ford, VW reportedly near agreement on self-driving partnership
18 February 2019 - Autoblog
Any investment could value Ford-backed Argo AI at $4 billion
A new report from Bloomberg suggests that Ford and Volkswagen are making progress on a potential partnership to jointly develop self-driving vehicles that could see VW invest in Argo AI, the autonomous vehicle startup in which Ford is a majority investor. The two sides reportedly discussed a valuation for Argo of around $4 billion.
Separately, The Detroit News reported this week that VW officials were due to visit Ford in Dearborn to continue discussions over autonomous and electric vehicles. The paper reports that VW has offered Audi's wholly owned Autonomous Intelligent Driving subsidiary, called AID, as part of the negotiations.
Ford and VW announced an alliance last month during the North American International Auto Show in Detroit, saying the two companies would partner on commercial vans and medium-size pickup trucks, with Ford providing platforms for both starting in 2022 and the German automaker eventually providing urban vans like the Caddy. The two sides also acknowledged they were working on co-developing technologies for EVs, autonomous vehicles and other mobility solutions.
The Bloomberg report, which cites unnamed sources familiar with the discussions, says the two sides have overcome earlier obstacles around self-driving vehicles and have agreed on a structure to jointly bring them to market.
Automakers are increasingly looking to partner with their competitors as a way to lower costs and speed development of electric and autonomous vehicles, especially given the slowdowns in the U.S. and Chinese auto markets, the two largest. General Motors, which is aiming to cut around 14,000 blue- and white-collar employees to free up capital to invest in the new technologies, is mulling an investment in electric vehicle startup Rivian; online retailer Amazon just made a $700 million investment. Ford itself is also in the early stages of an $11 billion global restructuring.
Any investment by VW would be a huge boon for Argo, which has struggled to attract the kinds of outside investment that has buoyed Cruise, GM's self-driving subsidiary.
Ford in 2017 announced it would invest $1 billion over five years in Pittsburgh-based Argo as part of its ambition to begin manufacturing a self-driving Level 4 vehicle by 2021. Audi, VW's luxury brand, is also targeting 2021 to launch an autonomous vehicle.
Meanwhile, CNBC reported on Wednesday that Ford and VW have different plans around EVs and are having trouble finding common ground for any future partnership.