Ford & Volkswagen to expand Electric Vehicle partnership in Europe

In a widely anticipated move, car makers Ford and Volkswagen have announced the extension of their seven-month old partnership to cover autonomous and electric vehicles. 

Ford will begin developing battery-powered cars based on the VW Group's MEB electric vehicle platform in Germany and VW will invest €2.3bn in Ford's Argo AI self-driving unit.

The announcement was made by Ford CEO Jim Hackett and VW CEO Herbert Diess in New York on Friday and will build on the "global alliance" that was announced back in January. 

Ford will use the VW MEB platform to produce "at least one high-volume fully electric vehicle" in Europe "starting in 2023." The MEB platform is already being used in a range of projects by VW and its subsidiary companies but this is the first time the project is being used by a major external company.

Ford has said it intends to sell over 600,000 EVs over a six year period using the MEB platform. A second model, also destined for the European market, is currently under discussion.  "This supports Ford's European strategy, which involves continuing to play on its strengths – including commercial vehicles, compelling crossovers and imported iconic vehicles such as Mustang and Explorer," said the company in a press release. 

Volkswagen has been using the MEB platform since 2016 and estimated it will build 15 million electric cars using it over the next decade including the I.D. Buzz, inspired by the camper van, and the yet-to-be-released ID.3 hatchback. 

Volkswagen's €2.3bn investment in Argo AI will feature nearly €1bn in direct funding. 

Argo AI is focusing on the development of a Level 4 self-driving system for ride sharing and good delivery vehicles in urban areas. 

VW CEO Herbert Diess said the Argo platform was "the best solution for Volkswagen" to speed self-driving vehicles to market, and that Ford and VW together intend to make that platform "a global industry standard."

The transactions will make the two car giants equal partners in Argo AI, with the Pittsburgh-based self-driving startup with both companies saying they will independently design "purpose-built vehicles to support the distinct people and goods movement initiatives of both companies," in a move seen as a move to take over some of the market share currently occupied by Tesla.

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