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Volkswagen closes its investment in Argo AI

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Volkswagen AG has finalised its $2.6 billion investment in the self-driving start-up Argo AI.

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Last July, Ford and Volkswagen announced a collaboration with Argo AI to introduce autonomous vehicle technology in the US and Europe. As part of this collaboration, Volkswagen would join Ford in investing in Argo AI. Ford had previously invested $1 billion in the company.

Working together with Argo AI positions both Ford and Volkswagen to better serve our future customers while improving cost and capital efficiencies. While the uncertainty of today's business environment has created challenges for partnerships and investments in the self-driving space, this collaboration remains on track and will be a positive development for everyone involved.

Argo AI's partnership with Volkswagen also includes the contribution of VW Group's Munich-based Autonomous Intelligent Driving (AID) team. The establishment of Argo Munich will serve as our European headquarters. Munich will become the company's fifth engineering centre, building on Pittsburgh — its global headquarters — along with Detroit, Palo Alto, and Cranbury, N.J. The company also maintains fleet operations in Miami, Washington, D.C., and Austin.

Ford has committed to spending more than $4 billion through 2023 on the development of its self-driving service. A large part of this investment has been dedicated to developing Argo AI's self-driving system. With Volkswagen's investment in Argo AI, Ford will now share the cost of developing Argo AI's technology.

In addition to shared development costs, the deal with Volkswagen makes Argo AI's self-driving software the first with commercial deployment plans for both Europe and the US. Because it can tap into both automakers' global reach, Argo AI's platform has the largest geographic deployment potential of any autonomous driving technology to date. Scale and geographic reach are important factors in developing a self-driving system that is robust and cost efficient.

While the two automakers are sharing Argo AI's technology development costs, Ford will remain independent and fiercely competitive in building its own self-driving service. Sharing the development costs with Volkswagen doesn't mean Ford is reducing its overall spend in the autonomous vehicle space. Instead, it is reallocating the money toward its unique customer experience including transportation as a service software development and fleet operations. The American automaker believes in building the best overall customer experience that will help differentiate the company from other competitors in the self-driving space.

John Lawler, CEO, Ford Autonomous Vehicles LLC, and Ford Motor Company Vice President, Mobility Partnerships, said, “There are several important parts to developing a great self-driving service including the self-driving software, vehicle development, fleet operations and the customer experience. To be successful in this space, a company needs to look at every aspect of the business. It's not about being first. It's about providing value to our customers, making people's lives easier and offering cities new and improved mobility solutions.”

Investing in and creating the right customer experience is even more important now as the COVID-19 virus has impacted everything — from the way we work to how we shop. Ford believes that a change in customer behaviour, whether permanent or temporary, is something it must fully understand while building a self-driving service.

“Investing in and creating the right customer experience is even more important now as the COVID-19 virus has impacted everything — from the way we work to how we shop. At Ford, we believe a change in customer behaviour, whether permanent or temporary, is something we must fully understand as we build a self-driving service,” Lawler added.

The addition of Argo Munich expands the company's employee base to more than 1,000 people worldwide.


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Volkswagen closes its investment in Argo AI
Modified on Tuesday 2nd June 2020
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