Volkswagen investing $2.6B in Ford-owned, Pittsburgh-based Argo AI | TribLIVE.com
Allegheny

Volkswagen investing $2.6B in Ford-owned, Pittsburgh-based Argo AI

Associated Press
1404029_web1_710973-9d27b17f5c1847ab86b2376bbdee7fcd
AP
One of the test vehicles from Argo AI, Ford’s autonomous vehicle unit, navigates through Pittsburgh’s Strip District near the company offices in December.

DETROIT — Volkswagen will sink $2.6 billion into a Pittsburgh autonomous vehicle company that’s mostly owned by Ford as part of a broader partnership on electric and self-driving vehicles, the companies confirmed Friday.

The two automakers will become equal owners of Argo AI, a robocar firm that was majority-owned by Ford, with plans to put autonomous vehicles on the roads in the U.S. and Europe.

The deal also includes a plan for Ford to use VW’s modular electric vehicle underpinnings to build zero-emissions cars for the European market starting in 2023.

The tie-up has been in the works for months and is another in a long string of industry partnerships as auto companies and tech firms try to spread the enormous costs of developing self-driving and electric vehicles.

“While Ford and Volkswagen remain independent and fiercely competitive in the marketplace, teaming up and working with Argo AI on this important technology allows us to deliver unmatched capability, scale and geographic reach,” Ford CEO Jim Hackett said in a prepared statement.

The VW investment includes $1 billion in cash and the $1.6 billion value of VW’s 200-person autonomous intelligent driving company. Ford already has committed to putting $1 billion into Argo, which the companies now value at $7 billion.

Also under the deal, Ford will use VW’s new modular electric vehicle underpinnings to build zero-emissions vehicles for the European market starting in 2023. The company hopes to sell 600,000 of them. VW, the world’s largest automaker measured by sales, already has invested $7 billion in the new platform, which it plans to use to build 15 million electric vehicles worldwide.

Jessica Caldwell, executive director industry insights for the Edmunds.com auto pricing site, said the deal should help both companies and is an example of what’s needed in the business to share enormous capital costs.

“Ford has taken flack for years for not having a robust EV strategy and VW has had its own fair share of challenges, but this can help both companies reinvent themselves as innovative technology leaders,” she said. “The combination of these two massive automakers is exactly what needs to happen to accelerate the adoption of AV and EV technology.” Edmunds provides content for The Associated Press.

Shares of Ford rose just under 1 percent in premarket trading Friday to $10.19 after the long-awaited announcement.

The two companies announced plans in January to collaborate on developing commercial vans and medium-sized pickup trucks while exploring electric and autonomous vehicles together. They said Ford would develop larger vans and pickups while Volkswagen would develop a smaller van for crowded cities.

Many automobile companies are joining forces because they’re under pressure to develop autonomous vehicles and smartphone-enabled transportation services. They’re competing with companies such as Waymo and Uber to launch the technology. They’re also under pressure to release electric vehicles in markets such as China and Europe to meet tougher pollution limits.

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.