Auto giants Volkswagen and Ford announced Friday they were expanding their alliance to include the development of self-driving cars.
The announcement accelerates cooperation among otherwise competing global auto giants as they face enormous costs in developing new electric vehicle and self-driving technologies.
Volkswagen will invest USD2.6 billion in capital and assets in Ford's self-driving unit Argo AI to market new-technology vehicles in the United States and Europe.
"While Ford and Volkswagen remain independent and fiercely competitive in the marketplace, teaming up and working with Argo AI on this important technology allows us to deliver unmatched capability, scale and geographic reach," Ford chief Jim Hackett said in a statement.
VW's investment values Argo at more than $7 billion and will allow Ford to use VW technology to market "at least one" high-volume fully electric vehicle to European consumers starting in 2023.
Ferdinand Dudenhoeffer, an analyst in Germany with the Center for Automotive Research, told AFP that prior to the alliance Ford had no electric models in development for the European market and going it alone was not possible.
"Ford and VW need to cooperate on self-driving vehicles," he said.
"One has to invest today to see the first returns maybe in 2030 and there are major new competitors in this space, the tech companies Waymo and Apple, Amazon and Uber, Chinese companies."