On the same forward-thinking note, VW is going to invest $2.6 billion into Argo AI, Ford's self-driving auto venture and Ford plans on building an electric auto from VW's MEB electric vehicle platform. VW will also purchase some Argo AI shares from Ford over three years, bringing the AV subsidiary's total valuation to some $7 billion. "We cannot be late, Ford can't be late, and we have to be great". Ford is taking a slower approach to commercial launch than rivals like General Motors, but executives have repeatedly stressed their confidence in that timeline.
"One has to invest today to see the first returns maybe in 2030 and there are major new competitors in this space, the tech companies Waymo and Apple, Amazon and Uber, Chinese companies".
The value of VW's contribution to the collaboration is more than $2 billion, including about $1 billion invested, said two industry sources who requested anonymity discussing the deal.
"Our platform is scalable to just about any type of vehicle", Salesky said.
Ford and Volkswagen plan to unveil a broader global alliance on Friday that will focus on developing autonomous technology and electric vehicles. This includes a "second all-new Ford model for European customers" that is being considered.
VW chief executive Herbert Diess said the firms were continuing to look at other areas which they could collaborate on. They said Ford would develop larger vans and pickups while Volkswagen would develop a smaller van for crowded cities. The firms "remain on track" on that endeavor and Ford expects to launch a medium-sized pickup for both companies as early as 2022.
Demand for passenger vehicles has flattened, and automotive and high-tech rivals have invested billions of dollars in self-driving auto research and development.
VW and Ford said they were in "exploratory talks" about an alliance to develop self-driving and electric vehicles and to complement each other's global production and sales footprints.
The person says the two will become equal owners of Argo AI, which is developing autonomous vehicle systems.
Ford is in the midst of an $11 billion restructuring effort. "Plus, thanks to Ford and Volkswagen, Argo AI technology could one day reach almost every market in North America and Europe, applied across multiple brands and to a multitude of vehicle architectures".
"Ford will be a more targeted business in Europe, consistent with the company's global redesign", European president Stuart Rowley said in a June statement.