Ford Motor Co. and autonomous-driving software company Argo AI are nearing agreements with Volkswagen AG to partner on electric and self-driving vehicles that would bind two of the world's largest automakers in a transatlantic alliance on two of the most expensive pieces of a rapidly changing global auto industry.
The proposed alliance would also tie VW to Argo as the Pittsburgh-based start-up company's second investor and the second company to use its software to deploy self-driving vehicles. Argo would be able to test and launch in Europe through VW.
If approved by Ford's board this week and Volkswagen's board Thursday, the companies are expected to officially announce the new partnership details Friday. The deal could create one of the largest and most robust alliances on electric and autonomous vehicles seen yet from major automakers; Ford and Volkswagen sold roughly a combined 17 million vehicles globally last year, roughly 21% of the market.
"Both companies get scale, both get savings," said Sam Abuelsamid, an automotive technology analyst for Navigant Research, adding that the partnership indicated VW saw progress in Argo that it likely didn't see in other companies. "If you can start to combine some of that cost and share some of that technology, you can get more volume out of fewer platforms. You have the potential to save an enormous amount of money in development costs."
Two sources with knowledge of the deal said the companies have negotiated for VW to share its MEB electric-vehicle platform with Ford.Meanwhile, VW would get access to Argo's self-driving software and the data and learning Ford and Argo have gathered to-date, along with a minority stake in the start-up, and a seat on Argo's board. Ford currently has a majority stake in Argo and two seats on the board.
Argo would absorb VW's Munich-based Autonomous Intelligent Driving team, called AID, which has acted as an urban autonomous-driving technology supplier for the Volkswagen Group, sources said. Collaboration there would effectively create a new autonomous vehicle powerhouse as Ford, Argo and VW share data, expertise and geographic reach as the auto companies ready to deploy their first autonomous vehicles.
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