Ford and Volkswagen Expand Partnership to Invest in Autonomous and Electric Vehicles

Automobile companies Ford and Volkswagen announced, this week, an update to their “strategic alliance” that was originally confirmed back in January at the North American International Auto Show.  

Earlier this year, Ford President and CEO Jim Hackett and VW CEO Dr. Herbert Dress said they were investigating the possibility of shared investments in a handful of areas including vehicle architecture, medium-sized trucks, and commercial vans, as well as larger commercial vans for the European market.  In addition, Ford will both engineer and build “compact pickups” for both car brands by 2022; Ford will also make the larger commercial vans by 2023 and Volkswagen will build a new city van. 

Also in January, the two top officials said this alliance will grow both makers’ fleets of medium-sized trucks, commercial vans, and autonomous technology.  It should also be noted that the two officials made it very clear that Ford and VW will remain separate companies and that this alliance does not include any type of cross ownership.

Specifically, Hackett (of Ford) said they will remain “two separate companies with deep ties to our respective countries.”

Ford has also stated, “Volkswagen and Ford have signed a memorandum of understanding to investigate collaboration on autonomous vehicles, mobility services, and electric vehicles and have started to explore opportunities.”

Essentially, the two car makers will definitely benefit from scale, leveraging each other’s different offerings through this joint venture. While the proposal is still awaiting final approval, the automakers can expect to build on the 18 million vehicles they collectively produced in 2018. That’s about 20 percent of the global market for new vehicles. 

Furthermore, Ford’s statement continues, “Both companies also said they were open to considering additional vehicle programs in the future. The teams will continue working through details in the coming months.”

The mention of autonomous vehicles is important, of course, as this is still an emerging field within the industry.  Accordingly, manufacturers within the automotive industry continue to partner as a means to invest in self-driving cars and the related technology, as carmakers expect it could take many decades before autonomous vehicles start to consistently turn a profit. 

Of course, the market for electric vehicles already exists, so it is encouraging to see major players in the game trying to focus more on increasing their electric offerings.  

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