Volkswagen zooms ahead in extension of alliance with Ford to electric, automated cars…

NEW YORK – Ford Motor Co and Volkswagen AG said they will spend billions of dollars to jointly develop electric and self-driving vehicles, deepening a global alliance to slash development and manufacturing costs while positioning VW as the initial winner.

How soon those investments will pay for themselves is an open question across the global auto industry.

Ford and VW executives said the latest collaborations could save hundreds of millions of dollars for each company. But the projects would take time to develop, and the size and timing of the payoffs were unclear.

The latest iteration of the Ford-VW alliance suggests the German automaker may hold the more lucrative cards — for now.

VW has agreed to plow $3.1 billion into Ford’s Argo AI self-driving unit, but estimates it could realize up to $20 billion in revenue by sharing its MEB electric vehicle architecture with Ford in Europe.

The two sides are still discussing additional deals, including an extension of the EV sharing arrangement to other Ford vehicles, which could further boost VW’s take.

Ford and VW have already started cooperating in the area of commercial vehicles and mid-size pickup trucks as part of the auto industry’s broader effort to redraw production and sales footprints to cope with more stringent regulation and fragmented markets.

Executives, meanwhile, declined to put a value on the potential revenue generated by the data to and from their respective self-driving vehicles.

Ford Chief Executive Jim Hackett said at a news briefing on Friday in New York he expects “chimneys of data that will be spewing from the vehicles” that will use Argo’s self-driving technology.

VW will invest $2.6 billion in Argo AI, Ford’s self-driving cars venture, and will buy $500 million worth of Argo shares from Ford, giving the two automakers equal stakes in the startup.

VW CEO Herbert Diess said at the briefing the Argo platform was “the best solution for Volkswagen” to speed self-driving vehicles to market, and that Ford and VW together intend to make that platform “a global industry standard.”

Ford also will build an electric car in Europe, starting in 2023, using VW’s MEB electric vehicle platform, the companies said.

“Our global alliance is beginning to demonstrate even greater promise, and we are continuing to look at other areas on which we might collaborate,” Diess said.

Ford expects to build more than 600,000 electric vehicles in Europe over six years, sourcing components and the vehicle underpinnings from VW, helping both to cut costs.