Ford Motor Company and Volkswagen AG are expanding their global alliance and will collaborate with Argo AI to introduce autonomous vehicle technology in the United States and Europe.
Volkswagen's chief executive officer, Dr. Herbert Diess, Ford's president and chief executive officer, Jim Hackett, and Argo AI's chief executive officer, Bryan Salesky, announced that Volkswagen was joining Ford in investing in Argo AI, the autonomous vehicle technology platform company.
In a statement, the companies said that, working together with Ford and Volkswagen, Argo AI's self-driving system (“SDS”) was the first with commercial deployment plans for Europe and the United States. In addition, they said, being able to tap into both automakers' global reach would mean that Argo AI's platform had the largest geographic deployment potential of any autonomous driving technology to date.
Volkswagen and Ford independently will integrate Argo AI's SDS into purpose-built vehicles to support the initiatives of both companies.
Argo AI said that its focus remained on delivering an SAE Level 4-capable SDS to be applied for ride sharing and goods delivery services in dense urban areas.
Ford and Volkswagen will have an equal stake in Argo AI and, combined, Ford and Volkswagen will own a substantial majority. The remainder will be used as an incentive pool for Argo AI employees. The full transaction is subject to regulatory approvals and closing conditions.
“While Ford and Volkswagen remain independent and fiercely competitive in the marketplace, teaming up and working with Argo AI on this important technology allows us to deliver unmatched capability, scale, and geographic reach,” Mr. Hackett said. “Unlocking the synergies across a range of areas allows us to showcase the power of our global alliance in this era of smart vehicles for a smart world.”
Volkswagen 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, which includes more than 200 employees – most of whom have been developing self-driving technology for the Volkswagen Group.
As part of the transaction, Volkswagen 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.
The full transaction represents a valuation for Argo AI that totals more than $7 billion.
Both automakers said that they see significant potential, including profitable growth by tapping new business areas tied to autonomous technology.
Argo AI said that it plans to work closely with Ford and Volkswagen to provide the autonomous vehicle technology the automakers need to deliver fully integrated self-driving vehicles that can be manufactured at scale for safe, reliable, and durable deployment in ride sharing and goods delivery services.
“Argo AI is fortunate to have a world class team due to our clear mission and the commitment to deployment from our partners, and together with AID employees, we will have a global workforce to attract even more of the best talent,” said Mr. Salesky, co-founder of Argo AI. “Plus, thanks to Ford and Volkswagen, Argo AI technology could one day reach nearly every market in North America and Europe, applied across multiple brands and to a multitude of vehicle architectures.”
Based in Munich, Germany, AID will become Argo AI's new European headquarters and will be led by AID's current chief executive officer, Karlheinz Wurm. With the addition of AID employees, Argo AI will grow from 500 to over 700 employees globally.
In addition to its global headquarters in Pittsburgh, Pennsylvania, the new location marks Argo AI's first engineering center in Europe and the fifth globally in addition to Dearborn, Michigan; Cranbury, New Jersey; and Palo Alto, California. Collaborating with Ford, Argo AI also is testing its technology in Miami and Washington, D.C., where together they plan deployment of commercial services.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].