Volkswagen to Contribute $2.6 Billion to Ford’s Autonomous Venture: Source

By Reuters
July 12, 2019Business News
Volkswagen to Contribute $2.6 Billion to Ford’s Autonomous Venture: Source
A Volkswagen logo is pictured at the newly opened Volkswagen factory in Wrzesnia, Poland on Sept. 9, 2016. (Kacper Pempel/File Photo/Reuters)

HAMBURG—Carmaker Volkswagen will inject $1 billion in capital and $1.6 billion worth of assets into Ford’s self-driving unit, a source close to the matter said on Friday, as the two carmakers deepen a global alliance to share costs.

Volkswagen and Ford said they were in “exploratory talks” about an alliance to develop self-driving and electric vehicles and to complement each other’s global production and sales footprints. They are to announce details on Friday.

Volkswagen also plans to build a multi-brand production plant in Turkey, German trade magazine Automobilwoche said on Friday.

Ford already has a large plant in Golcuk, Turkey where it builds the Ford Transit van and a source told Reuters that Volkswagen intends to make use of Ford’s production capacity in Turkey, to build a Volkswagen van.

Self-driving Uber
An Uber driverless car waits in traffic during a test drive in San Francisco on Dec. 13, 2016. (Eric Risberg/AP Photo)

As part of a broader deal set to be announced on Friday, Volkswagen will become an equal stakeholder in Ford’s autonomous vehicles venture, the source said, marking the latest technology alliance among global carmakers seeking to develop self-driving cars.

Ford created Ford Autonomous Vehicles LLC in 2018, pledging to invest $4 billion until 2023 and has sought outside investors to help share the spiraling cost of developing autonomous vehicles.

Honda Motor Co., last year joined forces with General Motors Co., to develop autonomous vehicles by investing $2.75 billion in GM’s Cruise Automation self-driving vehicle unit.

Alphabet Inc’s Waymo has agreements with Fiat Chrysler Automobiles and Jaguar Land Rover to buy and equip vehicles with its self-driving systems.

A Waymo self-driving car is seen during the annual Google I/O developers conference in Mountain View, California
A Waymo self-driving car is seen during the annual Google I/O developers conference in Mountain View, Calif., on May 8, 2018. (Stephen Lam/Reuters)

Ford and Volkswagen said on Thursday they would announce further details about a global technology-sharing alliance agreement on Friday.

The collaboration could accelerate the deployment timetables of both carmakers, which have said they plan to put autonomous vehicles into operation in 2021.

In June, Volkswagen ended its partnership with Aurora only days after the self-driving software start-up firm announced an alliance with Fiat Chrysler. Aurora also has partnerships with Hyundai Motor Co. and China’s Byton.

Testing of New Self-Driving Fleet

Ford Motor Co’s majority-owned autonomous vehicle subsidiary, Argo AI, launched its new fleet of self-driving test vehicles—Ford Fusion Hybrid—in Detroit on Wednesday, expanding its presence to five U.S. cities.

The new cars are equipped with upgraded sensors, including radars and cameras with higher resolution and range, the company said.

The No. 2 U.S. automaker is in talks with German carmaker Volkswagen AG to develop self-driving vehicles as its autonomous vehicles unit competes for investment and engineering talent with peers as well as technology companies.

General Motors’ majority-owned Cruise robotaxi business, Aurora, recently announced a partnership with Fiat Chrysler Automobiles, while Alphabet and Uber are also investing in their self-driving projects.

Argo already operates vehicles in Pittsburgh, Palo Alto, Miami and Washington D.C.

By Ari Rabinovitch and David Shepardson

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