VW, Ford Forge Alliance That Threaten to Reshape Automotive Landscape

VW, Ford Forge Alliance That Threaten to Reshape Automotive Landscape

Ford and Volkswagen AG announced plans to expand their global alliance in ways that could signal the biggest seismic shift to happen in the auto industry in modern times.

While mergers are nothing new, what makes the Ford/VW version unique is that they are seeking to create a new standard in manufacture, particularly in the area of electric vehicle design and architecture.

As part of the deal, VW will put down USSD2.6 billion in a new autonomous vehicle startup named Argo AI. Ford had initially invested USD1 billion in the company back in 2017. Combining both investments with the absorption of VW's Munich-based Autonomous Intelligent Driving team into the startup puts Argo AI's capital at over USD7 billion.

The alliance also allows Ford to gain access to VW's electric vehicle platform--the Modular Electric Toolkit (shortened to MEB based on its German translation)--with the goal to build over 500,000 vehicles in Europe in the immediate future. VW plans to use the same platform to produce 15 million battery-powered vehicles for the global market over the next decade.

Sharing the MEB also allows both companies to use scale economies to reduce their production costs in their future cars, and thereby give them a more attractive end-consumer price. Lower prices increases demand, which means further cost reduction. With electric vehicle (EV) manufacturers perpetually struggling to keep themselves in the black, the Ford/VW strategy could mean "sustainable and profitable growth" for both brands in the EV category, according to Volkswagen CEO Dr. Herbert Diess

The two companies have been hinting at a massive collaboration since last year, but this recent announcement signals an enormous step forward. For one thing, it expands both companies' capabilities on two disparate technologies--autonomy and electrification--which could lead to a lot of profitable innovations, but could also result in massive financial investments and risks.

As the world moves ever forward toward electrification and autonomy, the alliance between Ford and VW could very well dictate the future of both industries and give the American and German car brands a high leg up over the rest of the field.

Ford's Jim Hackett and VW's Herbert Diess ©media.ford.com

Read All

Featured Articles

Recommended Articles For You

Read All

Featured Ford Cars

  • Upcoming

Ford Car Articles From Zigwheels

  • News
  • Article Feature
  • Road Test
  • Ford PH reactivates ‘Year-End Sale’ program
    Ford PH reactivates ‘Year-End Sale’ program
    Paulo Papa . Nov 08, 2024
  • Ford PH reactivates ‘Year-End Sale’ program
    Ford PH reactivates ‘Year-End Sale’ program
    Paulo Papa . Nov 08, 2024
  • Ford PH reactivates ‘Year-End Sale’ program
    Ford PH reactivates ‘Year-End Sale’ program
    Paulo Papa . Nov 08, 2024
  • Ford PH reactivates ‘Year-End Sale’ program
    Ford PH reactivates ‘Year-End Sale’ program
    Paulo Papa . Nov 08, 2024
  • Ford Mustang GT3 to tackle ‘top-tier’ European tracks
    Ford Mustang GT3 to tackle ‘top-tier’ European tracks
    Paulo Papa . Oct 29, 2024
  • Ford Bronco: pros and cons
    Ford Bronco: pros and cons
    Cesar Miguel . Aug 15, 2024
  • 2-door coupe skirmish: Ford Mustang vs. Toyota GR Supra
    2-door coupe skirmish: Ford Mustang vs. Toyota GR Supra
    Cesar Miguel . Aug 05, 2024
  • Check out the Ford Mustang’s 2 available trims
    Check out the Ford Mustang’s 2 available trims
    Cesar Miguel . Jul 17, 2024
  • Ford Mustang vs. the competition
    Ford Mustang vs. the competition
    Cesar Miguel . Jul 12, 2024
  • Cabin check: What's inside the Ford Bronco?
    Cabin check: What's inside the Ford Bronco?
    Cesar Miguel . Jul 09, 2024
  • Buff Horses: Ford Mustang, Bronco experience
    Buff Horses: Ford Mustang, Bronco experience
    Cesar Miguel . Jun 21, 2024
  • Buff Horses: Ford Mustang, Bronco experience
    Buff Horses: Ford Mustang, Bronco experience
    Cesar Miguel . Jun 21, 2024
  • In the Ford Ranger XLS 4x2, is age just a number?
    In the Ford Ranger XLS 4x2, is age just a number?
    Dylan Afuang . Mar 15, 2022
  • Wild and mild: The Ford Ranger Raptor
    Wild and mild: The Ford Ranger Raptor
    Dylan Afuang . Nov 17, 2021
  • 2021 Ford Territory Ecoboost Titanium+: Everything but the kitchen sink
    2021 Ford Territory Ecoboost Titanium+: Everything but the kitchen sink
    Roy Robles . May 18, 2021