[ad_1]
Ford engine
Co.
The enlarged alliance with
Volkswagen
AG
will give the American automaker an important business ally in Europe, where stricter rules on emissions significantly increase costs for the auto industry.
The two world giants in the automotive industry decided Friday to jointly develop an electric car for the European market, using existing VW technology for battery-powered vehicles. Ford has announced that it will build about 100,000 vehicles a year with the VW Electric Car Toolkit, starting in 2023.
Moreover, VW will also invest $ 2.6 billion in Argo AI, Ford's auto partner, evaluating Pittsburgh's startup at $ 7 billion. Argo will work with both automakers to develop a self-driving technology that everyone will be able to use when it will launch autonomous vehicles in a few years.
Car manufacturers are eager to market hundreds of new hybrid and battery-powered electric cars in Europe by next year to meet the continent's new greenhouse gas emissions targets, which strongly limit pollutants at the exhaust pipe. Analysts say that a number of automakers are already at risk of not meeting their targets and are at risk of heavy fines.
By working with VW, Ford hopes to be able to develop an electric car for Europe faster and at a lower cost than it could have achieved on its own.
"Given the imminent evolution of European regulations, this should help Ford avoid issuance fines," said Colin Langan, an auto analyst at UBS Group AG.
Automakers are investing billions in the development of electric cars, even though most executives and analysts say they are losing money for every product sold. Technology is not cheap enough to be sold at mass prices, largely because of the high cost of the battery.
Producing an electric car costs $ 12,000 more than making a comparable gasoline-powered vehicle, and the parity is likely to be five years behind schedule, according to consulting firm McKinsey & Co.
Europe proved to be a challenge for Ford, which announced last month the closure of factories on the continent and the removal of 12,000 jobs, or more than 20% of its European workforce. The US automaker, which has struggled to maintain profitability in Europe over the years, is also reducing its manufacturing footprint in the region by 24 factories by the end of the year to 18.
For VW, the enlarged alliance coincides with the recent major investments of the German company in electric vehicles. Last fall, the Wolfsburg-based automaker announced it would spend about $ 50 billion over the next five years on electric cars, autonomous vehicles and digital services.
Herbert Diess, chairman and CEO of VW, said Friday that bringing his electric car technology to Ford would increase the adoption of the electric vehicle worldwide and give his company a bigger stature.
VW is facing its own problems. Earlier this year, the automaker announced the elimination of 7,000 cost-cutting jobs as it focuses on the electric vehicle market. VW and some of its executives also face legal challenges from the US Securities and Exchange Commission and the German authorities following the 2015 diesel emissions scandal.
The Ford-VW partnership on electric and autonomous vehicles builds on an alliance concluded earlier this year between the two automakers to allow them to collaborate on commercial vans and trucks.
-Sara Germano contributed to this article.
Write to Mike Colias at [email protected]
Copyright ะน 2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
[ad_2]
Source link