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Ford-VW Expands Partnership To Include Self Driving And Electric Vehicles

Ford-VW Expands Partnership To Include Self Driving And Electric Vehicles
The seven month old alliance between Ford and Volkswagen would now include autonomous and electric vehicles according to an announcement made by the companies on Friday.
Even though the forwarding of the deal itself between the two companies was nothing unexpected, what surprised many industry experts is the announcement that a $2.6 billion investment would be made by VW as a part of the deal in the autonomous vehicle startup based in Pittsburgh called Argo AI. This was an obscure startup that was virtually unknown till Ford purchased it for $1 billion in 29017. In addition to the investment of $1 billion in cash that would be done by VW in the startup, it would also merge its Munich-based Autonomous Intelligent Driving team with Agro in which would be worth another $1.6 billion in assets. Argo’s post-money valuation will be over $7 billion after the deal is completed.
The two companies had announced in January about their decision to jointly manufacture pickup trucks and commercial vehicles. While analysts saw that as a logical move in a very competitive global auto industry, many of them feel that the latest venture of VW is a rather risky one because the partnership between the companies now is much broader as it includes two technologies — autonomy and electrification, and both are considered technologies that could transform the global mobility industry as a whole. However they also see these technologies to be very expensive to develop and use in mass production. And while electric vehicles is slowly catching up among consumers in some markets, it is yet to have a mass appeal globally and is plagued by many issues such as long lasting batteries and acute lack of charging points. On the other hand, even though some companies have been able t develop and conduct partial tests of prototypes of autonomous vehicles, it is still years away from making it to the market.
The deal is best suited for Argo because it would now be able to have a global reach. The company was founded by a group of former engineers from Uber along who are related to the very well know robotics lab at Carnegie Melon University. The company has already developed some self driving cars and has used Ford’s infrastructure to test drive them in Pittsburgh, Detroit, Miami, and Washington, DC. This deal with VW would now open doors of Europe for Argo with supervision and support from VW.
For Ford, the deal would allow the US auto maker to gain access to the electric-vehicle MEB platform of VW which is also known as “Modulare E-Antriebs-Baukasten” which is the German equivalent for “modular electric drive matrix.” According to Ford, this platform of VW would be used by it for the designing of and manufacturing of at least one high-volume fully electric vehicle for the European market by 2023. Ford has plans of manufacturing at last 600,000 vehicles for the European market over a period of six year using that platform.

Christopher J. Mitchell

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