July 12th, 2019 by Steve Hanley
Last week, we reported on how Ford and Volkswagen were cozying up to each other in an attempt to meet the twin challenges of electric cars and autonomous driving head on. Volkswagen had agreed to share its MEB electric car chassis with Ford. Although, not for any cars aimed at the American market so far as we know. On July 12, the two companies announced a further deepening in their relationship designed to bring autonomous cars to the road.
Volkswagen is putting its MEB chassis on the table. Ford is bringing its newly acquired Argo AI division to the party. CNBC reports that spending on self-driving vehicle technology is expected to reach $85 billion annually by 2025, according to a June study by AlixPartners.
Ford has already spent $1 billion to acquire Argo AI, which is focused on Level 4 autonomy, albeit in geofenced areas with well marked roads and in reasonably good weather conditions. Argo AI already has test fleets operating in five US cities, including Pittsburgh, Palo Alto, Detroit, Miami, and Washington, DC.
In a joint statement issued by the companies, Volkswagen says it “will invest $2.6 billion in Argo AI by committing $1 billion in funding and contributing its $1.6 billion Autonomous Intelligent Driving (AID) company.” That’s the automaker’s in-house autonomous vehicle development unit, which currently has 200 employees. VW will also purchase $500 million in Argo shares over the next three years.
Argo AI will now expand its operations to Europe to test its technology there. Its CEO, Bryan Salesky, said in a statement his company’s “technology could one day reach nearly every market in North America and Europe, applied across multiple brands and to a multitude of vehicle architectures.”
The joint announcement focused more on the autonomous side of things but the two companies are not ignoring the electric car side of the equation. They suggest they will share development of a fully electric vehicle that will come to market by 2023. If you think that is too timid an approach, you’re probably right. But Volkswagen will continue its push to get electric vehicles based on the MEB chassis to market sooner. The ID.3 passenger car is slated for production in about a year, and Ford is still pursuing its link-up with electric pickup truck maker Rivian.
If changes in the auto industry are coming too slowly for some, they are coming nonetheless. Altering the course of these massive companies is like trying to steer an oil tanker with a canoe paddle. Patience, grasshopper, and pray the world is still able to support human life by the time these wondrous vehicles of the future arrive.