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Ford And Volkswagen Are Up To Something Huge

Industry News / Comments

Things are becoming even more interesting.

Last January, Ford and Volkswagen announced a major partnership that will see the two automotive giants help each other out. VW is interested in Ford's truck knowledge, while Ford is keen to gain insight in VW's electric vehicle technology and related platforms. No equity is being exchanged, at least for now.

But according to a new report from Automotive News, the companies are close to signing yet another deal, this time involving collaborating on autonomous vehicles. Ford's autonomous affiliate, Argo AI, is at the center of the negotiations and reports claim a deal could be finalized as early as next month. Why is this a big deal? This new partnership would instantly be a direct rival to Alphabet's Waymo and General Motor's Cruise self-driving units in both ambition and scope, according to sources familiar with the deal.

Automakers are fully aware that the next big battleground will involve the likes of robo-taxis and driverless delivery vehicles. Eventually, the public will be able to buy fully self-driving vehicles, but there's still a fairly long way to go until that happens. But now is the time for tech partnerships to be made. The alternative is being left behind.

For example, Ford CEO Jim Hackett previously said autonomous cars and other emerging mobility services is potentially a $10 trillion market. For now, Ford and VW have discussed a potential value of Argo AI of $4 billion. Equally important, the two automakers' top executives personally get along very well and they recognize the benefits of working together.

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"We fit together geographically really well, product line-wise, we fit together well," Ford Chairman Bill Ford said last March. "We both came to the same realization that as big as our balance sheets are, no company can do this alone."

At the moment, Argo AI is expanding its new fleet of Ford Fusion Hybrid test vehicles to five US cities, including Detroit, Pittsburgh, Palo Alto, Miami, and Washington D.C. These vehicles have been equipped with upgraded sensors, radars, and higher resolution cameras with improved range. Both VW and Ford declined to comment further on the ongoing talks, but don't be surprised to hear official news in the very near future.