Ford, Volkswagen teaming up on autonomous and electric cars

Volkswagen will invest $2.6 billion in resources to join Ford as an equal partner in autonomous car technology firm Argo AI, the companies announced Friday.

(Argo AI has been testing its technology on public roads using Ford Fusion sedans.)

The automakers will work together to develop a self-driving system and integrate it into their own vehicles, with Ford already planning to debut a hybrid utility vehicle aimed at providing commercial ride-hailing and package delivery services by 2021.

The system is initially being designed at Level 4 capability, which means it will be able to operate autonomously only in limited, mapped-out areas. Argo AI has been testing it in a few major metropolitan areas, including Miami and Detroit.

Argo AI CEO Bryan Salesky said he thinks it will be a "long time" before Level 5 full autonomy is safe enough to deploy, and that the Level 4 tech will be too expensive to offer in retail consumer vehicles for several years.

Volkswagen's MEB platform can be used for a variety of vehicle types.

Volkswagen's MEB platform can be used for a variety of vehicle types. (Volkswagen)

Ford is also gaining access to the electric car platform Volkswagen is launching next year and will use it to build and sell its own battery-powered model in Europe starting in 2023 as it develops a separate lineup of zero-emissions vehicles for the U.S. market. Ford CEO Jim Hackett said the production location for the vehicle would be announced at a later date, but that the company is expecting to sell 600,000 over six years and is planning to add a second model on the platform.

Volkswagen will launch its first MEB-based car, the ID 3, in 2020.

Volkswagen will launch its first MEB-based car, the ID 3, in 2020. (VW)

Ford is scheduled to debut a Mustang-inspired electric performance SUV next year, followed by an electric F-150, a model built through a $500 million partnership with startup electric vehicle outfit Rivian and its own modular zero-emissions that should spawn several car and utility models.

VW’s Argo AI investment includes $1 billion in cash, which matches what Ford first committed to the company in 2017, along with the integration of its existing Autonomous Intelligent Driving company that is currently 200 employees strong.

The new collaboration builds on a growing alliance between the automakers that kicked off in January when they announced plans to co-develop new commercial vans and small pickups for regions outside the U.S.

This is a developing story, check back for updates.