Volkswagen to Invest in Ford's Self-Driving Car Unit -- 4th Update
July 12 2019 - 08:43AM
Dow Jones News
By Mike Colias
Volkswagen AG agreed to invest around $2.6 billion in Ford Motor
Co.'s autonomous-vehicle partner, Argo AI, in a deal that values
the startup at $7 billion.
Ford has been the majority shareholder of Pittsburgh-based Argo
since early 2017, when it agreed to invest $1 billion.
Under the agreement with Volkswagen, reported Thursday by The
Wall Street Journal and announced by the companies Friday, Argo
would develop autonomous-driving technology for VW and eventually
supply systems for commercial use, while continuing its development
work with Ford.
The $2.6 billion investment in Argo includes $1 billion in
capital funding as well as the value of VW's 200-person
autonomous-driving division in Munich, which the companies placed
at $1.6 billion.
That group, called Autonomous Intelligent Driving, is run by
VW's Audi luxury-car unit and will form the foundation of Argo's
presence in Europe, according to people familiar with the
matter.
Major auto makers have been consolidating efforts as they race
to develop driverless and electric cars and build business models
around them.
General Motors Co.'s San Francisco-based Cruise subsidiary is
developing an autonomous-driving system with Honda Motor Co., which
has agreed to invest $2.75 billion in Cruise.
The startup has attracted more than $6 billion in outside
investment and was valued at $19 billion after its latest financing
round in May, GM has said.
VW and Ford scheduled a news conference Friday to provide
details of further cooperation between the German and U.S. auto
makers. Earlier this year, the companies agreed to jointly develop
and build commercial vans and trucks. They are expected to outline
plans to work together to develop electric vehicles.
Ford and VW began talks last year that led to the January deal
to work together on vans and trucks for markets around the world.
The idea to work together on electric and self-driving technology
grew from those earlier talks. Both sides have said they aren't
interested in any cross-ownership deals with each other.
The race to develop self-driving cars has spawned numerous
partnerships between car companies, auto suppliers and tech firms
-- all with the goal of solving what GM Chief Executive Mary Barra
has called "one of the biggest technical challenges of our
time."
German luxury-car rivals Daimler AG and BMW AG are working
together to develop driverless cars and smartphone-based mobility
services.
Alphabet Inc.'s Waymo unit, considered by many analysts to be
furthest along in technical development, is working with several
big auto makers, including Fiat Chrysler Automobiles NV, France's
Renault SA and its alliance partner, Japan's Nissan Motor Co.
Consulting firm AlixPartners LLP forecasts that about $45
billion will be spent on developing autonomous vehicles globally by
2025.
Write to Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
July 12, 2019 08:28 ET (12:28 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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