Published: Fri, July 12, 2019
Economy | By

Ford will use VW platform to build an electric vehicle for Europe

Ford will use VW platform to build an electric vehicle for Europe

Ford is also gaining access to the electric auto platform Volkswagen is launching next year and will use it to build and sell its own battery-powered model in Europe starting in 2023 as it develops a separate lineup of zero-emissions vehicles for the USA market.

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.

Volkswagen will invest $2.6 billion in Ford Motor Co.'s autonomous vehicle partner, the companies announced on Friday, as the two firms deepen their alliance to develop electric and self-driving vehicles. This brings the total investments into the autonomous company up to more than $7 billion.

It has sought outside investors to help share the spiraling cost of developing autonomous vehicle technology.

The VW investment includes $1 billion in cash and the $1.6 billion value of VW's 200-person autonomous intelligent driving company.

As part of the deal, VW will become an equal stakeholder in Ford's self-driving cars venture, while Ford will get access to VW's electric vehicle technology.

Ford CEO Jim Hackett said: "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". VW also will buy $500 million worth of Argo stock over the next three years. Volkswagen had agreed to share its MEB electric vehicle chassis with Ford. The two automakers will also look at other ways to work together on electric vehicles, but it didn't go into much detail there.

ArgoAI CEO Brian Salesky commented on the company's investments stating: "Thanks to Ford and VW, our technology could reach almost every global market, could applied to multiple vehicle brands a variety of vehicle platforms".

"Ford will engineer, source and build the previously announced medium pickup for both companies for customers in Europe, Africa, the Middle East, Asia Pacific and South America, with trucks expected to arrive in key markets as early as 2022", the statement said. Ford shares were up 0.4% to $10.15 as of 1:25 p.m. Thursday in NY.

A joint venture between Ford and Volkswagen (VW) was announced on Friday.

Suppliers familiar with Ford's plans say the No. 2 US automaker is developing a broader portfolio of electric vehicles, a lot of them crossovers that will carry the Ford and Lincoln brands, for North America and China.

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