The Ford-VW alliance is expanding to include autonomous and electric vehicles

Ford and Volkswagen announced Friday their intention to expand their seven-month old alliance to autonomous and electric vehicles.

As part of this agreement, VW will invest $ 2.6 billion in Argo AI, the Pittsburgh-based autonomous vehicle start-up, which no one has ever heard of until the formidable Ford's $ 1 billion investment in 2017 is already substantial. , as well as assets of $ 1.6 billion, which include the Munich-based automaker's autonomous driving team, which will be absorbed by Argo. Once the deal is complete, Argo's post-monetary valuation will exceed $ 7 billion.

In January, the two power plants of the automotive industry announced their willingness to build vans and commercial vehicles, but the announcement today is a much riskier step: it expands this partnership with two technologies – autonomy and electrification – considered potentially interesting. transform the way people move, but has also proven incredibly expensive and difficult to obtain.

This agreement also gives Argo a global reach. The company, founded by former Uber engineers linked to Carnegie Melon University's famous robotics lab, tests its cars with Ford support in Pittsburgh, Detroit, Miami and Washington, DC. From now on, he can also deploy his vehicles on European roads under the supervision of VW.

In addition, Ford will have access to the platform MEB for electric vehicles of VW, or "Modulare E-Antriebs-Baukasten", in German "matrix of electrical modular drive". The company relies heavily on its SEM platform, which will serve as the basis for the 15 million electric cars it hopes to sell. Ford plans to use the platform to design and build at least one all-electric high-volume vehicle in Europe from 2023. The automaker wants to supply more than 600,000 European vehicles using SEM architecture over a six-year period. Ford model for European customers under discussion. This measure would help Ford comply with the mandates of European governments that advocated electrified vehicles and stringent emissions standards.

Ford and VW have been discussing for months the huge costs associated with electric and autonomous vehicles. Automakers, large and small, are looking to build on Tesla's success in the field of electric vehicles by mass-producing SUVs and battery-powered sedans. At the same time, many of the same companies are also testing cars that drive themselves, either as taxis to transport passengers in the cities, or as delivery robots carrying groceries or other goods. But electric vehicles still represent only a small fraction of the total number of vehicles sold in the world. And many of the optimistic predictions about a mass of driverless cars hitting the road have not materialized.

True, this is not a complete marriage between Ford and VW. The two manufacturers would have separate activities in the autonomous vehicle sector and unique marketing strategies, but both would use the Argo software. Even though they would share Argo's technology and possibly VW's EV architecture, Ford and VW do not plan to share their revenues.

By sharing technology, data and costs, Ford and VW hope to accelerate the deployment of electric cars and autonomous cars on public roads. Both companies are seen as having complementary approaches to these new technologies that are changing the sector. Volkswagen has bet its future, worth 80 billion euros ($ 91 billion), on the ability to profitably produce electric vehicles – a feat that no automaker has succeeded to achieve. Ford teased its first serious EV, expected to be on the road in 2020 as part of a more modest deployment. The company has announced plans to spend $ 11.5 billion on the development and production of electric cars over the next few years.

Meanwhile, Ford is trying to find a place in the field of "mobility" by investing in carpooling programs, bikes and even scooters. The auto giant acquired Spin, a start-up electric scooter, for $ 100 million last year. He also saw some of his investments plummet, along with his Chariot microtransit service that closed earlier this year.

Today's announcement is a milestone for both companies, but especially for Argo. VW has examined several other AV startups, even in partnership with some, before deciding to support Pittsburgh.

A month ago, VW entered into a partnership with Aurora Innovation, the start-up for the self-reliance founded by former Google head Chris Urmson. Argo was co-founded by Bryan Salesky, another former member of Google's autonomous driving team. He was also part of the same team as Urmson at the 2007 DARPA Autonomous Vehicles Challenge, which is seen as a turning point in the search for autonomous cars. Ford has injected $ 1 billion into Argo in 2017 and has since collaborated with the start-up.

Companies have been working together for years on autonomous cars, but this relentless coupling has only recently taken a more serious turn. In recent months: