Ford and Volkswagen today officially announced a significant expansion of their partnership (hinted at in July 2019) to new areas, including electric vehicles.
The new set of agreements includes three main areas for joint projects:
- vehicles: midsize pickup truck, small city van and 1-ton cargo van
- EVs: Ford's MEB-based cars in Europe
- autonomous driving (both invested in Argo AI)
But the relationship does not involve cross-ownership between the two companies.
Before we jump into EVs, let's systematize the commercial vehicle projects, which are envisioned to share the costs and enhance global sales.
- midsize pickup truck engineered and built by Ford
Project leader: Ford
Volkswagen will offer the new Amarok (rebadged Ford Ranger) from 2022
"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"
- small city delivery van developed and built by Volkswagen Commercial Vehicles
- Project leader: Volkswagen Commercial Vehicles
Ford will offer a new city van (rebadged latest Volkswagen Caddy) from 2021
- 1-ton cargo van created by Ford
- Project leader: Ford
Ford and Volkswagen will offer a new 1-ton cargo van (Ford Transit Custom/ VW Transporter) from 2021
The joint volume of those vehicles will be 8 million over their total lifecycles.
There are no details about the electric versions of those joint projects, but we assume there will be electrified versions too.
MEB-based Ford passenger electric cars
The deal includes a new all-electric passenger Ford model for the European market, based on Volkswagen's Modular Electric Drive (MEB) platform, starting from 2023.
In total, Ford intends to sell some 600,000 MEB-based BEVs over several years, which means up to 100,000 per year on average.
This new model will join the high-end Ford Mustang Mach-E, scheduled for 2021.
"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."
The Ford-Volkswagen alliance on EVs might not end here, as the two are in talks about what else may be done jointly:
"Volkswagen and Ford plan to explore additional ways to cooperate on electric vehicles."
Ford other EV projects
Separate to all of the above, Ford works on two of its own pickup/commercial electric vehicles:
- Ford Transit Electric (from 2021 in Europe and from 2022 in U.S./Canada)
- Ford F-150 Electric ("within 24 months" so by mid-2022)
Jim Farley, Ford chief operating officer said:
“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. 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.”
Ford, Volkswagen Sign Agreements for Joint Projects On Commercial Vehicles, EVs, Autonomous Driving
- Will collaborate on commercial vehicles – city van created and built by Volkswagen Commercial Vehicles and later 1-ton cargo van engineered by Ford, plus Volkswagen medium pickup built on Ford Ranger platform – from 2022
- During the lifecycles of the products, the companies expect to produce up to a combined 8 million of the three commercial vehicles included in the commercial relationship
- Ford to build new electric vehicle for Europe based on Volkswagen’s Modular Electric Drive toolkit beginning in 2023; could approach a multiyear 600,000-plus units
- With Volkswagen’s investment last week in Argo AI, Ford and Volkswagen will work with Argo AI to independently develop AVs at scale based on Argo AI’s innovative self-driving technology
- Relationship does not involve cross-ownership between the two companies, is expected to create significant efficiencies for both companies
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 board for 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.