Volkswagen Ready to Invest $1.7 Billion in Ford's Self-Driving Unit Argo AI
【Summary】Volkswagen AG is looking to invest around $1.7 billion in a self-driving car venture with Argo AI, the self-driving arm of Ford Motor Co, according to people familiar with the matter.
Volkswagen AG is looking to invest around $1.7 billion in a self-driving car venture with Argo AI, the self-driving arm of Ford Motor Company, according to people familiar with the matter the WSJ reports. Ford and Volkswagen have been in talks since last June, hashing out details to partner together on self-driving car technology.
The potential partnership could be one of the biggest between two global automakers as the auto industry forms alliances in the race to develop driverless cars. Ford announced a $1 billion investment in Argo in 2017 to jumpstart its own self-driving efforts.
The deal could value Argo AI at $4 billion, according to Bloomberg.
Although the WSJ reports that talks have been productive, no formal agreement has been reached yet the people said, added that the deal may fail to materialize.
The two automakers have already agreed to a seperate deal in early January to jointly produce commercial commercial vans and trucks.
According to the WSJ, Volkswagen would invest nearly $600 million in Argo, about half of what Ford initially sought. Volkswagen will provide an additional $1.1 billion in working capital for the venture's onging research and development. The two automakers would each own a 50 percent stake in Argo.
"It's my opinion that you can't do this alone," Ford Chief Executive Jim Hackett said last month when detailing the company's VW alliance, which he described as a "foundational framework."
Volkswagen's potential investment in Argo might include the sharing of its MEB modular electric vehicle platform with Ford. By using the platform, Ford can extend is global reach into EV markets in Europe and China, places where Volkswagen already has a strong foothold.
Volkswagen CEO Herbert Diess said in January his company is "committed" to owning the software stack that will control self-driving cars, and any arrangement with Ford would address this.
The stakes are high for any deal worked out between Volkswagen and Ford on self-driving technology.
Ford has said it's spending $11 billion to develop new electric models The company also said it would spend an average of around $800 million through 2023 on self-driving-car technology.
Volkswagen has committed to investing as much as $50 billion over the next five years to develop electric cars and self-driving car technology.
VW and Ford would join General Motors who already has its own deal in place with self-driving startup Cruise Automation. GM purchased San Francisco-based Cruise in 2016 for a reported $1 billion.
In Oct 2018, Honda agreed to invest $2.25 billion into Cruise, with GM adding another $1.1 billion. The latest investments give Cruise a $14 billion valuation.
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