But what will the two companies collaborate on?
For over a year now, Ford and Volkswagen have been hinting at a new alliance on autonomous technology, electric vehicles, and possibly a pickup truck. The two automakers have now officially announced a global collaboration along with the high-anticipated details. First, both companies will invest in Argo AI, the autonomous vehicle platform company. This will allow Ford and VW to integrate Argo's self-driving technology on their global vehicles.
Next, Ford will benefit from the alliance by borrowing VW's upcoming Modular Electric Toolkit (MEB) to build electric vehicles in Europe by 2023. It doesn't seem like Ford's initial VW-powered EV will be offered in the US according to the details of the alliance but the lessons learned from VW could pave the way for future US-market models.
The collaboration will have ramifications for the US market, including new, medium-sized pickup trucks and select commercial markets starting by 2022. VW doesn't currently offer a pickup truck in the US and hasn't offered a van since 2013 with the Routan (a rebadged Dodge Caravan). Ford and VW will share development costs on these vehicles but the companies say the end results will not just be rebadged versions of the same vehicle.
"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 President and CEO Jim Hackett said. "Unlocking the synergies across a range of areas allows us to showcase the power of our global alliance in this era of smart vehicles for a smart world.”
Ford expects to sell 600,000 vehicles in Europe using the MEB architecture over six years. During the announcement, Ford even mentioned its Mustang-inspired electric crossover, which should arrive sooner than expected with help from VW.
"Looking ahead, even more customers and the environment will benefit from Volkswagen’s industry-leading EV architecture. Our global alliance is beginning to demonstrate even greater promise, and we are continuing to look at other areas on which we might collaborate,” VW CEO Dr. Diess said. "Scaling our MEB drives down development costs for zero-emissions vehicles, allowing for a broader and faster global adoption of electric vehicles. This improves the positions of both companies through greater capital efficiency, further growth, and improved competitiveness.”