VW and Ford in talks on autonomous and electric vehicles: source

FRANKFURT / DETROIT (Reuters) – Volkswagen AG (VOWG_p.DE) and Ford Motor Co are in "exploratory discussions" to jointly develop autonomous and electric vehicles as part of a large strategic alliance to save billions of dollars to businesses, according to someone close to the record.

German and American automakers are expected to provide an update on the progress of negotiations before the end of the year, said the person, who asked not to be identified.

The spokespersons of the two manufacturers would only repeat what they had already said about the collaboration of companies in the development of commercial vehicles.

"Our (Memorandum of Understanding) with VW covers discussions of potential collaborations in a number of areas. It is premature to share additional details for now, "Ford spokesman Alan Hall said in an email.

Global automakers plan to partner to share the costs of developing autonomous and electric vehicles. The partnerships on autonomous driving technologies differ by region.

Honda Motor Co announced this month that it would invest $ 2.75 billion and would take a stake in General Motors Co's Cruise Automation Autopilot unit to jointly develop stand-alone vehicles for deployment in fleets. of service around the world.

VW and Ford are under pressure to roll out more electric vehicles in Europe, where emissions rules are tightened following Volkswagen's diesel pollution scandal.

Frank Witter, chief financial officer of Volkswagen, said Tuesday that the automaker was open to closer alliances with outside companies, especially in the area of ​​autonomous driving.

Witter explained that sharing the MEB electric vehicle platform with the automaker was theoretically possible, although VW is currently working to roll out electric vehicle technologies among its own brands.

VW officials have repeatedly pointed out that the only way to turn electric cars into a mass market product is to achieve economies of scale to make them as cheap as diesel vehicles.

The VW Group is investing 34 billion euros in electric mobility and autonomous driving by 2022 and plans to build 2 to 3 million full battery electric cars by 2025. VW's MEB project already includes 50 billion euros for the purchase of battery cells by 2025.

Ford and other sources previously told Reuters that the two manufacturers are in talks on developing product / technology alliances.

VW and Ford are already part of a joint venture, called IONITY, with BMW AG and Daimler AG to develop a network of charging stations for high-speed vehicles for electric vehicles throughout Europe.

In July, Ford created a separate $ 4 billion unit to host its self-driving business and was looking for outside investors in a similar operation to GM with Cruise.

Ford then announced that it would invest $ 4 billion until 2023 in its new Ford Autonomous Vehicles LLC, including the $ 1 billion it previously allocated to Argo AI, the Pittsburgh-based, self-driven startup. acquired by Ford in 2017.