Volkswagen Breaks Bond With Tech Partner, Moves Closer to Ford

Volkswagen is close to sealing a deal with Ford Motor Company for the next phase of the two companies’ fledgling alliance. The German giant seems poised to join Ford in its pursuit of self-driving technology through Argo AI — the autonomous startup Ford sunk $1 billion in back in 2017. Paving the way for some sort of tie-up or investment, VW this week ended its partnership with another self-driving startup, Aurora Innovation.

As well, news could soon be forthcoming about a much-rumored electric vehicle pact between the two automakers.

This news doesn’t come from an anonymous source, but from the words of Volkswagen CEO Herbert Diess, whose address to top VW execs fell into the hands of Bloomberg. According to Diess, talks with Ford are “progressing well” and close to being finalized.

Earlier this year, Ford and VW announced an alliance focusing initially on the development and construction of commercial vehicles for the European market. In the hopes of reducing development and R&D costs and finding other synergies, the two partners suggested a closer relationship. VW has its eye on Ford’s tech prowess and body-on-frame pickups (specifically the Ranger), while VW’s MEB electric vehicle platform represents an opportunity to green-minded Ford.

VW knows it needs to shore up its future in North America, and Diess’ words show it.

“Without a strong presence in the U.S. — still our weakest region — global trade conflicts risk putting us in a dire situation,” Diess said. “Today we are a company that’s strongly influenced by China. We need a counterweight in the U.S.”

Besides bolstering its U.S. presence and seeking new tech ties (its partnership with Aurora only began at last year’s Consumer Electronics Show), VW has placed itself in a financial fitness program. Non-essential businesses, like a unit that builds engines for ships, may be sold off. The company recently announced it is planning an initial public offering of its Traton SE truck unit.

In his address, Dies said a streamlined business is key to lifting the company’s low valuation, thus helping attract new partners.

[Image: Volkswagen]