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Ford, Volkswagen to Make Electric and Autonomous Vehicles Together

June 10, 2020
The joint projects will include shared production of 8 million commercial vehicles, including a Ford vehicle built on Volkswagen's electric drive platform.

Photo: Ford CEO Jim Hackett, Argo AI co-founder Bryan Salesky, and VW CEO Dr. Herbert Diess (left to right)

Ford Motor Co. and Volkswagen AG signed an agreement today to cooperate on the development of new commercial vehicles. The pact was announced in July 2019 and formalized June 10, according to a statement from Ford. The cooperative effort does not include any exchanges of company ownership, and the two companies maintain their relationship as competitors.

The partnership involves several projects, including a medium pickup truck which will be built by Ford and sold by Volkswagen, a Ford electric vehicle built on Volkswagen’s modular electric drive system to be sold in Europe, and new commercial vehicles for both companies. The commercial vehicles will include a 1-ton cargo van made by Ford and a city delivery van based on the Volkswagen Caddy.

Both companies will also work with Argo AI, a Pittsburgh-based autonomous driving company, to form their own autonomous-vehicle businesses. Ford already had ownership and development interests in the company, which Volkswagen invested in last week. According to Ford, Argo AI’s self-driving system is the first such system with plans for deployment in both the U.S. and Europe.

“This alliance comes at a time of tremendous enthusiasm about the intersection of increasingly intelligent, connected vehicles in an ever-smarter world,” said Jim Hackett, CEO of Ford. Volkswagen Group CEO Dr. Herbert Diess said the companies’ joint effort would allow both to cheaply develop and distribute electric and commercial vehicles. “This collaboration will efficiently drive down development costs, allowing broader global distribution of electric and commercial vehicles, and enhance the positions of both companies,” said Diess.

Both companies have their eye on saving costs and carbon emissions. “In light of the COVID-19 pandemic and its impact on the global economy, more than ever it is vital to set up resilient alliances between strong companies,” said Diess. Hackett noted the partnership was a great opportunity to innovate, “even as companies need to be selective about how they use their cash.”

As for carbon, Ford says its use of Volkswagen’s electric drive system will help it fulfill its commitment to the Paris 2015 agreement, and Volkswagen and Ford reportedly plan to “explore additional ways to cooperate on electric vehicles.” Ford plans to design and engineer the vehicle in Germany, specifically Cologne-Merkenich. Independently, Volkswagen plans on officially releasing its own electric 1D.3 vehicle next week for about $45,484 in U.S. dollars as it prepares for a substantial push into electric vehicles.

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