Volkswagen And Ford Officially Announce Global Alliance

JAN 16 2019 BY MARK KANE 36

Volkswagen and Ford are negotiating about collaboration on EVs

We knew that it was coming. Volkswagen AG and Ford Motor Company announced the launch of a global alliance, which is envisioned to leverage the two global automakers’ strengths and increase competitiveness.

The agreement reminds us of some kind of deep partnership rather than a merge, as there is no cross-ownership between Ford and VW: “The alliance, will be governed by a joint committee. This committee will be led by Hackett and Diess and will include senior executives from both companies.”

At least for now, the major focus of the alliance to be pickups and commercial vans.

“Demand for both medium pickups and commercial vans is expected to grow globally in the next five years. The alliance will enable the companies to share development costs, leverage their respective manufacturing capacity, boost the capability and competitiveness of their vehicles and deliver cost efficiencies, while maintaining distinct brand characteristics.”

According to the press release:

  • Ford will engineer and build medium-sized pickups for both companies which are expected to go to market as early as 2022
  • For both parties, Ford intends to engineer and build larger commercial vans for European customers,
  • Volkswagen intends to develop and build a city van

Exploring potential collaboration on EVs

This is the part that we are interested most. Ford and Volkswagen are exploring the potential of collaboration on EVs, autonomous vehicles and mobility services.

It’s expected that Volkswagen could grant Ford access to MEB platform for all-electric cars, which could be handy for Ford, who didn’t invest in its own platform.

“In addition, Volkswagen and Ford have signed a memorandum of understanding to investigate collaboration on autonomous vehicles, mobility services and electric vehicles and have started to explore opportunities. Both companies also said they were open to considering additional vehicle programs in the future. The teams will continue working through details in the coming months.”

Volkswagen: Rolling Chassis with the Modular Electric Drive Kit (MEB) – First pure EV platform for high volume

Press release:

Volkswagen AG and Ford Motor Company Launch Global Alliance

  • Alliance leverages the two global automakers’ strengths to better compete, innovate and serve customers
  • Alliance does not involve cross-ownership between the two companies
  • Companies to first deliver medium pickup trucks for global customers, aiming to start in 2022, and intend to follow with commercial vans in Europe
  • Van and pickup agreements are targeted to deliver scale and efficiencies for each company starting in 2023
  • Volkswagen and Ford also are committed to exploring potential collaboration on EVs, autonomous vehicles and mobility services

Volkswagen AG and Ford Motor Company today announced the first formal agreements in a broad alliance that positions the companies to boost competitiveness and better serve customers in an era of rapid change in the industry.

Categories: Ford, Volkswagen

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36 Comments on "Volkswagen And Ford Officially Announce Global Alliance"

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I guess Ford reducing its car line up makes them appear to Volkswagen as a low threat, value add potential partner.
I wonder if this could be the beginning of something bigger? (remembering DaimlerChrysler)

NPNS! SBF!
Volt#671 + BoltEV + Model 3

Volkswagen will buy them once they depend on VW technology.

Let’s hope it doesn’t go the way of Daimler Chrysler, otherwise we’ll just see VW siphon off the remaining capital of Ford and leave them to go bankrupt. Nothing good for Chrysler ever came from that “merger”

Nothing good came for Daimler either. It was a loss – loss relationship

“DaimlerChrysler” didn’t combine the two companies whose reputation for sustainability was lowest. I think that is part of the problem, here. Both lag in electrification.

Ford’s become the light truck maker, who brags about aluminum recycling as if they wouldn’t do it anyway ($$). VW’s marginal profits have been helped by too many proprietary, non-servicable parts.

Today, markets baked in (or reversed out) there not being a whole lot more than optics to this partnership.

2022 is the new 2020 🙄

VW is opening up the brand new world of announcements for Ford. They can show them thing or two in that venue, and the automobile world was underwhelmed.
Disruptions make for strange bedfellows.

Yikes. First, Ford gets to foot the bill to develop delivery vans that could have horrible sales potential. Just think of all the major European cities that have vowed to ban ICE vehicles. Who in their right mind would think “Hey lets buy an ICE delivery truck that will be useless, or of very diminished value, half way through it’s life span”? Heck by the time these things roll out the BEV and ICE costs are predicted to be equivalent, so why would a company choose a vehicle with an increased operating cost?

Second, What is the incentive to buy a Ford EV when it is just a re-badged VW. The last time I drove mid-sized VW and Ford cars, the VW was definitely the more refined product. I would assume this will extend to the CUV market as well. What does Ford do if VW cuts off access to the next generation of EV platforms? You don’t hire a staff and develop the IP to build EVs as a backup plan.

It really seems like Ford just has US F150 sales to rely on for the foreseeable furture.

Your’s (and many other people’s) knowledge of Ford is very low.

Here are the US sales of products that are being kept moving forward. The F150 is less than one third of their US sales.
Also note that there is low overlap with VW’s portfolio so maybe they acutally complement each other.

E-Series Van (47,936 units sold)
Ecosport (54,348 units sold) <– new in 2018 so not a full production year
Expedition (65,542 units sold)
Mustang (75.842 units sold)
Edge (134,122 units sold)
Transit/Connect (169,717 units sold)
Explorer (261,571 units sold)
Escape (272,228 units sold)
F-series (909,330 units sold)

Carbon dioxide is the latest “free stuff”, especially when looking at Ford’s truck fascination.

Just look at that list. The US car market is huge, almost 5 million. Ford says, “FU, we get more margin if you spend more on gas.”

Its not a fascination. It’s survival. Cars are not profitable in general. Just ask GM and Toyota also.
The plan is to introduce many EV/PHEV for the lighter segments (cars and small CUVs). In the mean time they cancelled the majority of cars to direct investment to future, which should be interpretted as a positive, not a negative. Lack of car sales will be just a minor blip in history.

“What does Ford do if VW cuts off access to the next generation of EV platforms? You don’t hire a staff and develop the IP to build EVs as a backup plan.”

Ford would be forced to allow VW to acquire them in order to survive.

Ford does not play well with others.. so far this deal is about Ford working for VW, essentially a contractor like Magna. Also if Ford is looking to collaborate with EVs, and VW is so much further ahead, Ford will need to scrap what they have use the MEB platform, battery packs and charging tech from VW. VW then has Ford by the balls.

A shift from big clumsy suvs and crossovers is already happening, and Ford will be screwed.

” Just think of all the major European cities that have vowed to ban ICE vehicles”
You must have missed the announcement covered here on InsideEvs… The new transit van has a pure electric drivetrain. It does have a range extender but the ICE has no mechanical connection to the wheels.

One thing they will both need to know, which does seem to be another thing the Trump administration is incapable of, is clarity on gas fueled engine pollution standards, which the current administration seems unable to resolve.
https://finance.yahoo.com/news/u-automakers-push-deal-fuel-120000143.html

I don’t really see a problem for Ford and GM since they ditched most of their sedan lines, while trucks and Suv enjoy much more lax regulations. Isn’t that one reason they dumped sedans in the first place. How will this all play out? It won’t. It will just go on without resolution. One Ford executive quips being in the industry is like being settlers walking across the OK Corral, at the time of the famous gunfight. Well it’s better than having a last name that’s Clanton or McLaury.

The way I see it, if the government continues to do “nothing” like it has done with solar and EV incentives in recent years, things will continue to go great for us EV enthusiasts. Legacy automakers will have to either make a lot of BEVs or buy BEV credits from BEV exclusive manufacturers. These new standards progressively ramp up to ~54.5mpg in model year 2025. By comparison, the average of today’s on-road fleet is ~ 21 mpg. The CAFE penalty is $55 USD per vehicle for every 1 mpg under the standard. For example, in 2006 Mercedes-Benz drew a $30.3 million penalty for violating fuel economy standards by 2.2 MPG. The Obama plan (2012), if you want to call it that, separated cars from trucks for CAFE standards. Passenger cars are required to achieve 5% annual improvements, and light trucks 3.5% annual improvements. As automakers sell more trucks, the fuel economy they must deliver drops. The 2019 result of “unintended consequences” to that plan is that many automakers have stopped making cars. Now that the people who made those rules are mostly long gone from office, we have to make the current reality work as best we can. Pointing fingers… Read more »

I think we should be “pointing fingers”, like in the real-world direction of 38mpg, not 54.5. The latter was a lab stat. CAFE isn’t that unrealistic.

Together low gas prices and a relative strong economy is allowing Ford’s popular ICE F-Series trucks to keep Ford afloat but history says those two market conditions are not a constant.

Ford has given up on ICE sedans with no plans for an all-electric sedan.

Ford has no all-electric platform to be a market-lead for electric trucks.

Car makers not named Ford will within next 2-3 years start production of all electric trucks that will within a few short years thereafter start s-curve eat into Ford’s ICE truck market share.

If I were Mr Ford CEO I’d go for a hardcore radical shakeup:

1) Declare that Ford will have a market leading all electric EF-150 in production late 2022.

2) Declare that Ford will have an all electric Ford E-Mustang in production late 2021.

3) Declare that Ford will within next 3 years install a convenient & reliable fast charge network that rivals Tesla’s network… invite in any other car maker that wants to share in use and cost of that build project but keep it a Ford controlled build to insure it gets done on schedule.

… continued

… continued

4) Radically reorganize Ford to treat above 1 ,2 & 3 not as a side compliance business but with the conviction that Ford will have no ICE offerings past 2030 therefore all forward development resources will be exclusively directed towards development of all-electric platforms that can be extended to additional model offerings… and eventually bring back in wider sedan offering under the new EV platform.

5) Package that plan in a convincing re-birth of Ford plan and raise now $5B needed to pull it off.

Scrap 3, there is a standardized and open for all fast charging network already being built by Electrify America. Just tag along or close some gaps where you see them. The world does not need another proprietary charging network like Tesla. It was a great move in the beginning, but it is really an infrastructure liability for everyone in the long run. It’s like building a separate Tesla road network, waste of resources for society as a whole.

@ said: “Scrap 3, there is a standardized and open for all fast charging network already being built by Electrify America. Just tag along or close some gaps…”
———-

I disagree.

Electrify America was not born out of desire to get the thing built… it was born out of desire for it not needing to be built.

Electrify America is the result of court ordered reparations for VW’s Dieselgate… a big wrist slap penalty that will indeed result in many installed fast charge stations but absolutely *will not* result in a network anywhere near close to being competitive with Tesla’s Supercharger network.

A kid playing baseball by his own election with a genuine desire to win the game is different than a kid being court ordered to play baseball under strict conditions as form of punishment for being criminally hostile to the game.

I guess we will see. EA is finishing a 6 unit 150kW CCS setup a few miles from my house. So far they are the only ones besides Tesla making multiple unit supercharging-like setups. They are also putting them near major highways for interstate travel. So far, I’m impressed with what they have done.

Same here in Ohio

Tesla needed the supercharger network because a serious chicken and egg scenario existed until recently.
Manufacturer funded charging networks is the wrong choice, and soon to be a thing of the past.

@F150 said: “…Manufacturer funded charging networks is the wrong choice, and soon to be a thing of the past.”
————

Today’s situational evidence suggests the opposite is true:

Manufacturer funded charging networks [alone or as group consortiums with clear designated leads for each consortium] is the correct choice, and the future.

The early rise of gas stations to meet ICE demands will not play out same as rise of fast charge networks to meet EV demand.

InsideEvs is a little late in covering it but Ford just announced a BEV F150.

Wish granted 😉

@F150 Brian said: “InsideEvs is a little late in covering it but Ford just announced a BEV F150. Wish granted”
————-

But with no mention of when.

My wish: “Declare that Ford will have a market leading all electric EF-150 in production late 2022.”

VW has done this in the past with Chrysler and their minivans. I predict some major mergers and consolidation in the industry in the next five years. At some point, a VAG purchase of Ford may not be unexpected.

BMW is the smallest of the independents. However German companies are strongly protected by the German government so it will be interesting to see what happens to them.

I see the Hyundai/Kia buying a Japanese brand sooner or later (though that my be difficult). Japan, like Germany will strongly resist outsiders buying their companies. You can see this in the apparent coup by Nissan corporate against their European co-owner.

Where does that leave GM? They have no European market, and their terrible management of past European divisions speaks volumes. GM is trying to stay afloat with their current brands. If their stock continues to drop, maybe a European/Chinese company buys them?

In the mean time, some of the many Chinese companies will group together and become a serious threat to all the remaining players.

Basically VW is a state owned company. It was also devised that way long time ago. Berlin will never let it go bankrupt, as it will effectively protect the German car market and equipment manufacturers from outside competition. BMW is practically privately owned.

Nothing new here, in 1995 Ford introduced the Galaxy MPV, which was a Ford badged Volkswagen Sharan.

Ex-CEO Mark Fields put Ford in a horrible situation when he explicitly rejected the movement towards EVs a few years back. Now Hackett and Bill Ford have to play serious catch-up. Ford’s Transit Connect vans will be a good product for the EU market, but Ford will have to have BEV versions long-term – probably using VW technology. VW comes out net ahead in this deal. Even little Kia/Hyundai is running electric rings around Ford now.

Agreed. Fields talked a big game about innovation, but it’s clear the man wasn’t focused on electricity. I wasn’t surprised when he resigned.

That was Hackeet that rejected electrification. He’s the one that got rid of Sedans an cmax and focus ev

Sad to see Ford reduced to being what appears to be merely a junior partner to VW. How the mighty have fallen!

I don’t really get what VW will “win” with this deal. They manufacture large, medium and small vans. They make a small/medium pick-up. Van market is highly competetive in Europe.

Hmm, tiny Tesla managed to develop market leading EVs from scratch and those two big boys are looking for each other’s support to compete?