Volkswagen to Invest in Ford's Self-Driving Car Unit -- 2nd Update
By Mike Colias
Volkswagen AG has agreed to invest around $2.6 billion in Ford
Motor Co.'s autonomous-vehicle partner, Argo AI, in a deal that
values the startup at $7 billion, according to people familiar with
Ford has been the majority shareholder of Pittsburgh-based Argo
since early 2017, when it agreed to invest $1 billion.
Under the agreement with Volkswagen, to be announced Friday,
Argo would develop autonomous-driving technology for VW and
eventually supply systems for commercial use, while continuing its
development work with Ford, the people said.
The $2.6 billion investment in Argo includes $1 billion in
capital funding as well as the value of VW's 200-person
autonomous-driving division in Munich, which the companies placed
at $1.6 billion. That group, called Autonomous Intelligent Driving,
is run by VW's Audi luxury-car unit and will form the foundation of
Argo's presence in Europe, the people said.
Major auto makers have been consolidating efforts as they race
to develop driverless and electric cars, and build business models
VW and Ford scheduled a news conference Friday morning to
provide details of further cooperation between the German and U.S.
auto makers. Earlier this year, the two companies agreed to jointly
develop and build commercial vans and trucks. They also are
expected to outline plans to work together to develop electric
Ford and VW began talks last year that led to the January deal
to work together on vans and trucks for markets around the world.
The idea to work together on electric and self-driving technology
grew from those earlier talks. Both sides have said they aren't
interested in any cross-ownership deals with each other.
The race to develop self-driving cars has spawned numerous
partnerships between car companies, auto suppliers and tech firms
-- all with the goal of solving what General Motors Co. Chief
Executive Mary Barra has called "one of the biggest technical
challenges of our time."
German luxury-car rivals Daimler AG and BMW AG are working
together to develop driverless cars and smartphone-based mobility
services. Last year, Honda Motor Co. joined GM on a driverless car
program and agreed to invest $2.75 billion in GM's Cruise
Alphabet Inc.'s Waymo unit, considered by many analysts to be
furthest along in technical development, is working with several
big auto makers, including Fiat Chrysler Automobiles NV, France's
Renault SA and its alliance partner, Japan's Nissan Motor Co.
In recent months, developers have pushed back the timelines for
introducing driverless-vehicle services amid nagging technical
challenges and regulatory uncertainty.
Consulting firm AlixPartners LLP forecasts that about $45
billion will be spent on developing autonomous vehicles globally by
Write to Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
July 11, 2019 20:58 ET (00:58 GMT)
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