If you can't beat 'em... spend an absurd amount of money with them. Ford and VW just agreed to "collaborate" globally on both autonomous vehicles ("AVs") and electric ones ("EVs"). VW is investing a hefty $2.6B into self-driving startup Argo AI — the Pittsburgh-based tech company Ford already has a stake in. Now German VW and American Ford will use a bunch of Google translate to work in the Steel City together.
Ford = VW... They go together like Big Gulps and cupholders. The pair of car giants share similar histories, but the present is different for both — and that could make this AV and EV pact work:
- History: A car for the people. Henry Ford created that with the Model T. And it's the literal English translation of "Volkswagen."
- Present: One's got trucks, the other's got cars. Ford makes virtually all its money on trucks and SUVs. VW is busy in sedans, coupes, wagons... und Audis... und Porsche.
You need 2 drivers to get to 0 drivers... Since neither plays on the other's turf, they'll be ok sharing secrets in pursuit of the common goal — racing to self-driving tech.
- Alphabet leads the pack with Waymo, which is developing driving brains for cars and is believed to have a value over $100B.
- General Motors owns most of Cruise Automation, which is worth $19B and has investments from Honda and Softbank.
- Volvo & Uber, and BMW & Daimler are the other tag teams.
- Keep in mind: Valuations don't matter as much as results, which nobody's producing as quickly as hoped.