Exclusive: Volkswagen, Ford far apart on investment in Ford autonomous unit - sources
Volkswagen AG and Ford Motor Co have been unable to reach agreement on whether or how much the German automaker will invest in Ford`s self-driving vehicle unit, people familiar with the negotiations said.
Volkswagen has resisted agreeing to invest in Ford`s autonomous vehicle unit, instead preferring to announce the companies will simply work together in that area, according to people familiar with the talks who asked not to be identified. Some of the hesitation centers around questions about Ford`s technology, one person said.
Ford, on the other hand, wants Volkswagen to invest at least $500 million after earlier seeking $1 billion, eyeing deals its larger rival General Motors Co reached with Japan`s SoftBank Group Corp and Honda Motor Co Ltd that raised $5 billion combined and valued GM`s Cruise self-driving vehicle unit at $14.6 billion, the sources said.
Volkswagen and Ford declined to discuss details of the talks.
"We are still in ongoing negotiations with Ford, which we are conducting constructively and openly," Volkswagen said in a statement.
"Our talks with Volkswagen continue," Ford said in a statement. "Discussions have been productive across a number of areas. We`ll share updates as details become more firm."
In January, the companies announced they would join forces on commercial vans and pickup trucks, and also signed a memorandum of understanding to work together on electric and self-driving vehicle technology, actions meant to save the automakers billions of dollars.
Volkswagen Chief Executive Herbert Diess and Ford CEO Jim Hackett both voiced optimism last month that the deal involving electric and autonomous vehicles would be finalized, but provided no timeline.
Another issue in the talks is how the companies value Volkswagen`s autonomous technology assets that will be added to the joint effort, the sources said.
Meanwhile, the companies also have been negotiating Ford`s use of Volkswagen`s MEB EV platform, including the volume involved, where Volkswagen would provide it and how much Ford would pay for its use, the sources said. However, Ford cannot use the platform until 2024 at the earliest, sources said.
Ford president of global markets Jim Farley suggested during the taping of Detroit television show "Autoline Detroit" on Monday there were challenges around the use of Volkswagen`s EV platform, saying the MEB was primarily designed for use in Europe and China, and for different consumer needs.
The talks around teaming up on EVs and AVs have advanced together so far, but are not necessarily linked, the sources said. Ford would walk away from a deal it felt was unfair, a second person said.
The talks have dragged on for months, but there is no deadline and a third person said they could be resolved shortly.
Sources previously said the framework of a deal would include Volkswagen investing in Ford`s AV operations, including its Argo AI business. Volkswagen, Europe`s largest automaker, has earmarked $50 billion to develop electric cars, autonomous driving and new mobility services by 2023.
The efforts by Volkswagen and Ford to expand their alliance highlights the growing pressure on global automakers to manage the billions of dollars necessary to develop electric and self-driving vehicles, as well as technology to meet tougher emissions standards for millions of internal combustion vehicles they will sell in coming years.
The industry has seen a lot of investment activity over the past year around autonomous vehicles, a segment in which Alphabet Inc`s Waymo self-driving unit is considered the leader.
Volkswagen has been open about its desire to work with other companies around self-driving cars and when the Ford alliance was announced Diess said teaming up with an American company made sense given the more advanced U.S. regulatory environment.
Interest in the sector remains high. On Tuesday, sources said GM and Amazon.com Inc were in talks to take minority stakes in electric automaker Rivian Automotive, potentially tapping into the startup`s vehicle platform. The previous day, driverless delivery startup Nuro said it raised $940 million from SoftBank.
On February 7, startup Aurora, whose CEO earlier led Alphabet`s self-driving program, raised more than $530 million in funding, including from Amazon. Aurora has contracts to help Volkswagen, Hyundai Motor Co Ltd and China`s Byton develop AVs.
SoftBank bought its stake in GM`s Cruise unit for $2.25 billion in May 2018, and last October SoftBank and Toyota Motor Corp said they would jointly develop self-driving car services. Honda followed SoftBank last October, agreeing to invest $2.75 billion in Cruise.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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