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Volkswagen in Talks with Ford to Invest in Self-Driving Startup Argo AI

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【Summary】Automakers are continuing to form strategic partnerships with tech companies and rivals to accelerate the development of self-driving cars. The latest being Volkswagen, who is reported to be in talks with the Ford Motor Co to work together on electric and self-driving cars.

Eric Walz    Nov 09, 2018 11:53 AM PT
Volkswagen in Talks with Ford to Invest in Self-Driving Startup Argo AI

Automakers are continuing to form strategic partnerships with tech companies and rivals to accelerate the development of self-driving cars. The latest being Volkswagen, who is reported to be in talks with the Ford Motor Co to work together on electric and self-driving cars. The discussions were first reported by Automotive News.

As part of the deal, Volkswagen is considering an investment in Argo AI, a Ford-backed startup working on robotics and artificial intelligence for self-driving cars, people familiar with the discussions said. According to Automotive News, the two companies are nearing a framework agreement to collaborate on electric and self-driving vehicles, two crucial technologies set to transform the automotive industry.

VW also is poised to share electric-vehicle technology in addition to the multi-billion dollar investment the automaker has already committed to developing new electric models said the people, who asked not to be identified. VW plans to roll out around 20 fully-electric models beginning in 2020. starting with the I.D. Neo in Europe, a five-door hatchback based on the Golf.

The possible investment in Argo is significant, as it could accelerate VW and Ford's self-driving efforts. The cooperation would allow them to share costs and potentially catch up to rivals. Both companies are perceived as falling behind on self-driving technology.

The VW board of supervisors will consider its strategic relationship with Ford on Nov. 16, Reuters reported. VW declined to comment.

Ford spokeswoman Jennifer Flake a said the company is talking with VW about potential collaboration across multiple areas and that it's premature to share additional details now.

In 2017, Ford made headlines when the company announced it was investing $1 billion in Argo AI, the Pittsburgh-based startup founded by former Google and Uber leaders working on robotics and artificial intelligence software for autonomous vehicles. Argo is working with Ford to develop a new software platform for Ford's fully autonomous vehicle the company plans to launch in 2021.

Together with its partner Argo AI, Ford has said it was open to outside investment in its autonomous efforts by a second automaker. The talks to bring on VW are progressing well and have the potential to create a global competitor in the self-driving race, one person familiar with the discussions said.

Automotive & Tech Company Partnerships

Self-driving cars are expected to upend the transportation industry and become a business worth around $7 trillion by over the next several decades, according to a report last year by Intel Corp. and Strategy Analytics. Automakers, as well as tech companies, are actively forming partnerships to accelerate their efforts in autonomous technology and commercial mobility services.

Ford rival General Motors is viewed as being ahead of Ford in the race to introduce self-driving technology. In 2016, GM purchased San Francisco self-driving startup Cruise for $1 billion. The tow companies are working to launch self-driving cars in 2019, putting GM in the lead over Ford.

Last month, Cruise received a separate $2.75 billion investment from Honda Motor Co, as Honda looks to accelerate its own self-driving technology with help from a partner.

Chipmaker Intel is working to become a major supplier of the robust hardware required for autonomous driving. The company purchased Israel-based computer vision startup Mobileye for $15 billion in 2017. German automaker BMW is working with Intel and Mobileye on autonomous driving systems for BMW's upcoming models.

In an interview with Automotive News published this week, Volkswagen CEO Herbert Diess said the discussions between Ford and VW could go much further, including sharing of VW's flexible MEB platform for electric vehicles with Ford and the potential use of Ford's Ranger platform to replace the VW Amarok pickup truck sold outside the U.S.

For its part, Ford remains open to working with VW on automotive technology.

.Ford CFO Bob Shanks told Bloomberg last month, "We're having a very broad set of discussions about how we can help each other around the world. Collaboration isn't being limited in any way whatsoever."


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