Ford Motor and Volkswagen will spend billions of dollars to develop autonomous and electric vehicles

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How soon will these investments bring profit is a question that has not yet been answered in the automotive industry.

Ford and VW executives have said that these new collaborations will save millions of dollars for each company, but projects will take time to develop, and the size and timing of benefits are unclear.

Extending collaboration with Ford suggests VW could have more to gain.

VW has agreed to invest $ 3.1 billion in Ford’s autonomous Argo AI but estimates it could generate up to $ 20 billion in revenues by dividing the MEB electric vehicle architecture with Ford in Europe.

The two sides are still discussing additional agreements, including the extension of the Electric Vehicle Sharing Agreement to other Ford electric vehicles, which could increase the benefits of VW.

Ford and VW have already begun to cooperate in commercial vehicles and mid-size pickup trucks as part of the wider efforts of the auto industry to reconfigure production and sales to meet stricter regulations and market fragmentation.

Ford’s general manager, Jim Hackett, and VW, Herbert Diess, have refused to assess the possible revenue generated by these collaborations.

VW will invest $ 2.6 billion in Argo AI and will buy $ 500 million in Argo worth $ 500 million from Ford. Evercore ISI analysts said the structure of the deal suggests that each car manufacturer will own about 40% at Argo, and the rest of the titles will be owned by Argo itself.

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