VW ploughs $2.6 billion into Argo AI
Ford and Volkswagen have co-invested in autonomous vehicle specialist Argo AI in a landmark deal that values the latter at $7 billion – and makes them “substantial majority” shareholders, the two said today.
Volkswagen and Ford will then independently integrate Argo AI’s Self Driving System (SDS) into their vehicles. As part of the investment, VW is bundling its own $1.6 billion Autonomous Intelligent Driving (AID) company into Argo AI.
Argo AI (founded in 2017 and based in Pittsburgh, Pennsylvania) is working on delivering a SAE Level 4-capable (no human intervention required) SDS for ride sharing and goods delivery services in dense urban areas.
CEO Bryan Salesky said: “We founded Argo AI to tackle one of the most challenging applications in computer science, robotics and artificial intelligence — self-driving vehicles. And we did this because we strongly believe the technology can benefit society by improving the freedom of movement at all levels of society. Our partnerships with Ford and Volkswagen are extraordinarily valuable in helping us achieve our mission.”
Argo AI Investment: How It Will Work
The deal sees VW invest $2.6 billion in Argo AI: committing $1 billion in funding and contributing its own $1.6 billion Autonomous Intelligent Driving (AID) company, which includes more than 200 employees. VW also will purchase Argo AI shares from Ford for $500 million over three years. Ford will invest the remaining $600 million of its previously announced $1 billion cash commitment in Argo AI.
In a nutshell: #VWGroupxFord
👉Expertise: two of the world’s largest automakers
👉We will get the world’s best SDS platform
👉Share R&D costs
👉Accelerate speed to market
👉Working toward autonomous vehicle leadership with @argoai pic.twitter.com/zb7WONRx2J
— Volkswagen Group (@VWGroup) July 12, 2019
“While Ford and Volkswagen remain independent and fiercely competitive in the marketplace, teaming up with Argo AI on this important technology allows us to deliver unmatched capability, scale and geographic reach,” said Ford CEO Jim Hackett .
The deal is part of a broader collaboration announced today.
Strikingly, Ford will become the first additional automaker to use Volkswagen’s dedicated electric vehicle architecture and Modular Electric Toolkit – or MEB – to deliver a high-volume zero-emission vehicle in Europe starting in 2023.
The alliance, which covers collaborations outside of Volkswagen and Ford’s joint investments in Argo AI, does not entail cross-ownership between the two companies and is independent from the investment into Argo AI.
The alliance is governed by a joint committee, which is led by Ford’s Jim Hackett and VW CEO Herbert Diess and includes senior executives from both companies.