Car Industry

VW will invest $2.6B in Argo AI and let Ford use its MEB electric car platform

Each party is playing to the other's strengths in this agreement.

One big happy family.

Ford

Volkswagen and Ford first announced their partnership at the 2019 Detroit Auto Show, but it was limited to midsize pickup trucks and commercial vans. Various reports about investments and platform sharing followed, but nothing was confirmed by either automaker -- until now.

Ford and Volkswagen announced on Friday that the two will deepen their partnerships. Specifically, the two will leverage their strengths in electric vehicles and autonomy, giving the two automakers more solid footing in both arenas.

VW will invest $2.6 billion in Argo AI. $1 billion will come from funding, while the remaining $1.6 billion will come in the form of VW's Autonomous Intelligent Driving (AID) company, which has more than 200 employees and has been responsible for self-driving-car development for the VW Group. VW will also purchase some Argo AI shares from Ford over three years, bringing the AV subsidiary's total valuation to some $7 billion.

AID's headquarters in Munich will become Argo AI's European headquarters, with CEO Karlheinz Wurm staying on to head efforts on the other side of the pond. It appears AID's current employees will all stay on board, as well. Argo AI already has a HQ in Pittsburgh and other facilities in California, Michigan and New Jersey. Argo AI's goal is the same -- developing hardware and software for self-driving vehicles that can be manufactured and deployed at scale.

Ford also gets something out of this partnership. Volkswagen will officially open up use of its MEB scalable electric-vehicle platform, which Ford will use for an all-new EV model that's aimed to go on sale in 2023. The two automakers will also look at other ways to work together on electric vehicles, but it didn't go into much detail there. Ford hopes to deliver more than 600,000 MEB-based EVs for Europe over six years. There's no word yet on whether these vehicles will come to the US.

The OEMs also shared some more details on their already-announced truck and van collaborations. Ford will engineer and build a midsize pickup for both companies for Europe, Africa, South America and other markets. Ford will also engineer and build a large commercial van for both automakers for Europe. Meanwhile, VW will develop and build a city van for both automakers for Europe. Sorry, US buyers, it doesn't appear this part of the partnership affects us in any way.

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