There was another car industry tie-up Friday in the race to develop electric and autonomous vehicles.
U.S. automaker Ford and Germany’s Volkswagen are the latest to join forces and pledge billions of dollars in investment.
The venture strengthens an alliance between the two companies to slash development and production costs. They already cooperate in commercial vehicles as part of the industry’s wider effort to redraw production and sales footprints.
But Friday’s announcement marks their first joint move into electric and autonomy development.
VW said it will invest $2.6 billion in Ford’s self-driving venture, Argo AI, while Ford will build an electric car using VW’s MEB electric vehicle platform.
Ford expects to build more than 600,000 electric vehicles in Europe over six years. They will source components in the vehicle’s underpinnings from VW, which helps both companies drive down costs.
VW will contribute its autonomous intelligent driving company to Argo and pay $500 million over three years to shares in Argo.
The joint venture follows a trend among car manufacturers. In June VW’s rival BMW teamed up with Britain’s Jaguar Land Rover to jointly develop electric motors.