Volkswagen, one of Germany's leading car manufacturers, enters into more than $2 billion worth of investment with self-driving start-up and Ford Motor Company, the start-up's blog disclosed on Tuesday, June 2.
The partners of the deal, Ford and Pittsburgh-based self-driving start-up Argo AI, received a $2.6 billion investment from Volkswagen, Forbes reported.
What does the deal mean? It holds that Volkswagen's investment in Argo AI at $1 billion in cash will seek to contribute to the dealings of the companies. In specific terms, VW and Ford will also acquire equal, minority stakes from Argo to provide these major automotive companies major control, the report added.
Parties and the business community are expecting to receive this announcement, which isn't new to them. This move, according to Forbes, was first declared in New York. It was only today that the investment deal officially closed.
Experts believe that this landmark dealing will change the way the automotive industry and technology come about. With the investment in Argo AI, people are expecting to see changes in shared development costs for their automotive vehicles and other products.
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The numbers
In another report on CNET.com's Road Show, the exact figure in which VW decided to invest is not 100% accurate-- to put it in precise terms-- is the amount is pegged at around $1.7 billion.
Argo AI was said to be valued at $4 billion, placing the German automaker's investment at about half of the value. The total of $2.6 billion investment is related to Ford's $4 billion worth of investment coming through in 2023, Road Show added.
Apart from being a bridge into the partnership between Volkswagen and Ford, the deal will also seek to improve self-driving cars' visibility, which isn't yet considered mainstream.
Moreover, the agreement will also transfer the German car brand's Autonomous Intelligent Driving unit to Argo. The effect? It will boost the Pittsburgh-based start-up's employment to more than a thousand, reports said.
Looking back
There were previous talks prior to the closing of this deal. Last summer, Ford and VW already announced their plan to work with Argo AI to enhance self-driving automotive technology. This spans across both the United States and Europe. Their goal is to intensify a cost-efficient self-driving system.
Consumers and businesses can see the full-fledged partnership happening in 2022 or 2023, according to the story. There are also automotive platforms being developed that will integrate Argo AI's system into the driving. Isn't that exciting for drivers and car enthusiasts?
More details
This isn't the first time Volkswagen and Ford Motors entered into a deal. The latter promised to create a new pick-up truck for both of the brands in 2022. Moreover, VW also plans to lend Ford the keys to its electric car platform. It will be followed by Ford's development of its very own electric car.
Further dealings are expected to take place and will be in support of sustainability. The goal has always been to manufacture cars in the most cost-efficient way possible.
