Ford's New German Partner Investing $1.7 Billion

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VW wants help with self-driving technology.

According to The Wall Street Journal, Ford has found a new investor for its self-driving-focused Argo AI subsidiary, and that investor intends to pour in $1.7 billion. Who is it? Volkswagen. Sources with knowledge of the discussions claim a final deal could happen soon. VW will initially invest $600 million as an equity investment in Argo and turn it into an "equity held joint venture," meaning each automaker would own half of the business.

Later on, VW will invest another $1.1 billion in working capital for the company's research and development department. Ford has so far only acknowledged there are current talks with VW but refused to either confirm or deny WSJ's report.

Only last month both automakers announced the start of a new global alliance that will include developing midsize trucks and commercial vans for overseas markets. Collaborating on electric vehicles and autonomous technologies was also stated as a possibility, and this latest report all but confirms that. Ford already invested $1 billion in Argo back in 2016 but the long-term advantages of having a development partner are vast. Not only would Ford and VW save money by splitting costs, but they can also pool their best technological minds to develop autonomous vehicles faster than the competition.

For example, earlier this month BMW and Mercedes-Benz announced a $1.3 billion alliance of their own for a new mobility service that intends to crush Uber. Last year, Honda announced plans to invest $2.75 billion into GM's Cruise Automation self-driving car subsidiary. Chances are, alliances like these will become more common because developing new technologies and mobility infrastructures are not cheap.

VW also has a partnership with Apple, which supposedly involves supplying the latter with customized vans for its own self-driving car program. No word yet on how the potential tie-up with Ford will affect that, if at all.

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