Two years ago, Ford and VW announced they’d explore the possibility of jointly developing vehicles. A year later, they expanded their partnership, and today, the two detail the specifics. Ford will engineer and build a midsize pickup and a one-ton commercial van for the two while VW will develop the smaller city van for the two. The two will also partner on autonomous and electric vehicles. We knew early on that the partnership would focus on commercial vehicles, self-driving cars, and EVs, but today, the details paint a better picture of what to expect.
Ford is currently working on the next-generation Ranger, and it will underpin the next-gen VW Amarok that’ll arrive in 2022. It won’t be the only vehicle released, though. As early as next year, we could see the two commercial vans arrive, too. The smaller city van will be based on the latest VW Caddy model, while the one-ton cargo van is likely a replacement for the Ford Transit. Ford will also build an electric vehicle for Europe using Volkswagen’s electric MEB platform.
Eight million vans and trucks could be produced over the products’ life cycles, according to the companies. That doesn’t include the estimated 600,000-plus EVs Ford could build every year, either. Last week, Volkswagen completed a $2.6 billion deal with Argo AI, and both automakers will work with the company, which has commercial deployment plans for its self-driving system for both Europe and the US.
While the joint venture has the two companies sharing products and technologies, the partnership doesn’t include cross-ownership. The press release detailing the agreement says the two will remain competitors. That means the next-gen Ford Ranger will compete directly against the next-gen VW Amarok, even though Ford will engineer and build both. Either way, the deal should help the companies find and exploit efficiencies, playing to the strengths of each while saving some cash, as well.
Ford, Volkswagen Sign Agreements for Joint Projects On Commercial Vehicles, EVs, Autonomous
DEARBORN, Mich., and WOLFSBURG, Germany – June 10, 2020 – Ford Motor Company and Volkswagen AG today signed agreements that expand their global alliance to meet rapidly evolving needs of their respective customers in Europe and other regions by leveraging complementary strengths in midsize pickup trucks and commercial and electric vehicles.
Plans for the agreements were first announced by Ford and Volkswagen last July.
The companies expect the alliance to enhance ownership experiences for current and future customers by more rapidly innovating vehicle offerings, incorporating relevant new technologies, delivering better utility and offering more model choices. They anticipate continued growth in global industry demand for commercial vehicles and for high-performing electric vehicles to add valuable scale to their individual product portfolios.
The alliance will:
- Produce a medium pickup truck engineered and built by Ford, for sale by Volkswagen as the Amarok starting in 2022 within the Volkswagen Commercial Vehicles lineup
- Further strengthen the commercial-vehicles businesses of both companies as early as 2021 – with a city delivery van based on the latest Caddy model, developed and built by Volkswagen Commercial Vehicles and later a 1-ton cargo van created by Ford, and
- Lead to a highly differentiated Ford electric vehicle for Europe by 2023 built on Volkswagen’s Modular Electric Drive, or MEB, toolkit, expanding on Ford’s zero-emission capabilities in the region
During the lifecycles of the products, the companies expect to produce up to a combined
8 million of the medium pickup truck and both commercial vans included in the commercial relationships.
“In light of the Covid 19 pandemic and its impacts on the global economy, more than ever it is vital to set up resilient alliances between strong companies,” said Volkswagen Group CEO Dr. Herbert Diess. “This collaboration will efficiently drive down development costs, allowing broader global distribution of electric and commercial vehicles, and enhance the positions of both companies.”
“This alliance comes at a time of tremendous enthusiasm about the intersection of increasingly intelligent, connected vehicles in an ever-smarter world,” said Ford CEO Jim Hackett. “This creates a huge opportunity to innovate and solve many of the world’s transportation challenges and deliver extraordinary benefits to customers – even as companies need to be selective about how they use their cash.”
Ford and Volkswagen both have strong commercial van and pickup businesses around the world, including popular models such as Ford’s Transit and Ranger and Volkswagen Commercial Vehicle’s Transporter, Crafter, Caddy and Amarok.
“Commercial vehicles are fundamental to Ford today and an area where we will accelerate and grow, and working with Volkswagen on these platforms will provide both of us significant financial advantages in things like engineering, and plants and tooling,” said Jim Farley, Ford chief operating officer. “Separately, Ford will add battery electric versions of Transit and F-150 in the next 24 months for commercial customers who increasingly need zero emissions and the power of connectivity, data and artificial intelligence.”
“The collaboration with Ford is a key building block of our GRIP 2025+ strategy and part of the current transformation of Volkswagen Commercial Vehicles,” said Thomas Sedran, chairman of the board of management of Volkswagen Commercial Vehicles. “This long-term cooperation with Ford will strengthen our very good position in area of light commercial vehicles, especially in our core European markets, and is proof that we are successfully implementing our plan step by step.”
Ford’s use of Volkswagen’s MEB architecture in Europe will represent another cornerstone in Volkswagen’s electric vehicle strategy, and further efforts by both companies to fulfill their commitments to the Paris 2015 Agreement. Volkswagen and Ford plan to explore additional ways to cooperate on electric vehicles.
Over several years starting in 2023, Ford could deliver 600,000 electric vehicles atop the MEB architecture, which is designed to combine space and performance with electric drive. The vehicle, which will be designed and engineered by Ford in Cologne-Merkenich, will add another compelling nameplate to its own all-electric Mustang Mach-E, which will be introduced in 2021.
Additionally, the companies will both work with Argo AI to form distinct, highly capable autonomous-vehicle businesses based on Argo AI’s self-driving technology. Last week, Volkswagen closed its previously announced investment in Argo AI, the Pittsburgh-based company in which Ford already had ownership and development interests.
Volkswagen and Ford independently choosing to invest in Argo AI illustrates the technical leadership and progress of Argo AI’s self-driving system, and how alliances can help enable development of breakthrough technologies that require substantial time and resources. Argo AI’s SDS is the first with commercial deployment plans for both Europe and the U.S. The global reach of Ford and Volkswagen will give Argo AI’s platform the largest geographic deployment potential of any autonomous driving technology to date. Reach and scale are important factors in developing an SDS that is robust and cost efficient.
The Volkswagen/Ford alliance does not include cross-ownership between the companies, which will remain competitors in the marketplace.