Volkswagen (VW) has expanded its global alliance with Ford by investing in autonomous vehicle developer Argo AI.
VW will hold the same share percentage as Ford, which together form a majority stake in the company. The remaining shares will be used as an incentive pool for Argo AI employees.
The auto makers plan to deploy Argo AI’s self-driving system (SDS) in Europe and the USA, with a prime focus on delivering Level 4 self-driving vehicles for ridesharing and goods delivery in dense urban areas.
“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,” said Ford president and CEO Jim Hackett. “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.”
VW will invest US$2.6bn in Argo AI by committing US$1bn in funding and contributing the services of its US$1.6bn Autonomous Intelligent Driving (AID) company, which includes more than 200 employees – most of whom have been developing self-driving technology for the VW Group.
As part of the transaction, VW also will purchase Argo AI shares from Ford for US$500m over three years. Ford will invest the remaining US$600m of its previously announced US$1bn cash commitment in Argo AI. The full transaction represents a valuation for Argo AI that totals more than US$7bn.
“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 Bryan Salesky, CEO at Argo AI. “Thanks to Ford and VW, 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 CEO 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.