Ford and Volkswagen are planning to collaborate further to develop electric cars based on VW’s MEB platform and autonomous driving technology together.

Ford and Volkswagen have deepened their global alliance which would now include electric cars along with a massive investment in autonomous vehicles and joint development of commercial vehicles as well. Ford would be using Volkswagen MEB modular electric platform for at least one high-volume fully electric car in Europe, that would be launched by 2023.

Dr. Herbert Diess, Volkswagen CEO and Jim Hackett, Ford President and CEO, on their collaboration to build electric cars and autonomous vehicle technology

Ford aims to deliver more than 6,00,000 units of the MEB-based electric car from Volkswagen over a period of six years, starting from 2023. However, no specific body type for the first car has been confirmed by Ford yet. VW CEO Herbert Diess has also talked about the possibility of a second MEB-based electric car from Ford. This suggest that the second model could double the supply of MEB components to Ford.

As part of the deal, Volkswagen would be supplying the platform as well as the battery packs and other structural components to Ford. Ford will design the cars themselves at their facility in Cologne, Germany. Although it has not been decided where they would assemble the cars, Ford CEO Jim Hackett has confirmed that it would certainly be one of Ford’s European plants.

Herbert Diess claims that sharing the MEB platform with Ford would reduce development costs of electric cars and that would would allow for broader and faster adoption of the same. According to him, it also improves position of both the companies through greater capital efficiency, growth, and improved competitiveness.

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Along with electric cars, this partnership between Ford and Volkswagen will also see them investing in Argo AI, an autonomous car company that was first backed by Ford in 2017. Volkswagen would be investing just under £2.1 billion in Argo AI and will also purchase shares from Ford over a 3-year period. That would increase Argo AI’s total valuation to £5.6bn.

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Volkswagen claims that Argo AI’s self-driving system is the first with commercial deployment plans for Europe and the US. They plan to deliver Level 4-capable, self-driving system for ride sharing and goods delivery services in dense urban areas.

Ford and Volkswagen also talked about their previously confirmed collaboration to develop commercial vans and pickup trucks. Ford would develop a medium-sized pick-up truck to be sold by both brands in Europe, Africa, the Middle East, Asia Pacific and South America from 2022. Ford would also be developing a large van, particularly for the European market while Volkswagen will build a city can for sale in Europe and other select markets.