25 August 2019
Fod says its MoU with Volkswagen "covers conversations about potential collaborations across a number of areas." Photo: Bloomberg
Fod says its MoU with Volkswagen "covers conversations about potential collaborations across a number of areas." Photo: Bloomberg

VW, Ford in talks on self-driving and electric vehicles: report

Volkswagen and Ford Motor Co are in exploratory talks to jointly develop self-driving and electric vehicles in a far-reaching strategic alliance, Reuters reports, citing a person familiar with the matter.

The automakers are likely to provide an update on the progress of the talks before year end, the source was quoted as saying. 

Spokesmen for both automakers would only reiterate what they have said before about the companies collaborating on the development of commercial vehicles. 

“Our (memorandum of understanding) with VW covers conversations about potential collaborations across a number of areas. It is premature to share additional details at this time,” Ford spokesman Alan Hall told Reuters in an email. 

VW and Ford are under pressure to roll out more EVs in Europe, where emissions rules are being tightened in the wake of Volkswagen’s diesel emissions pollution scandal. 

Volkswagen CFO Frank Witter on Tuesday said the carmaker was open to deeper alliances with outside companies, particularly in the area of autonomous driving. 

Witter said sharing the carmaker’s electric cars platform MEB with Ford was theoretically possible, although VW is currently focused on rolling out the electric vehicle technologies among its own brands. 

VW officials have repeatedly emphasized that the only way to make electric cars a mass market product is through economies of scale to make them as cheap or cheaper than diesel vehicles. 

VW Group is investing 34 billion euros into e-mobility and autonomous driving by 2022 and plans to make 2 million to 3 million full-battery electric cars by 2025.

The group’s MEB project already includes 50 billion euros in battery cell procurement by 2025. 

Ford executives and other sources previously told Reuters the two automakers were in talks about expanding product and technology alliances. 

VW and Ford are already part of a joint venture, dubbed IONITY, with BMW AG and Daimler AG to develop an ultrafast EV charging station network across Europe. 

In July, Ford created a separate US$4 billion unit to house its self-driving vehicle operations and was seeking outside investors in a move similar to one made by GM with Cruise. 

In other auto industry news, General Motors on Wednesday revealed that it is stepping up efforts to cut costs in response to tariff and market pressures, even as it reported third-quarter profit that blew past Wall Street expectations, Reuters reports. 

The top US automaker said it is offering buyouts to salaried employees with 12 or more years of service, with CEO Mary Barra telling the workers in an email that the firm’s “structural costs are not aligned with the market realities.” 

The company had previously promised investors that it would cut US$6.5 billion in costs this year, and the buyouts would add to that total, a company spokesman said on Wednesday. 

GM said in a separate statement that it would consider layoffs after it sees the impact of the buyouts and other cost-cutting efforts. 

About 18,000 of the firm’s 50,000 salaried employees in North America are eligible for the buyouts, the company spokesman said. They do not affect the hourly workers on GM’s production lines. 

The move to cut staff stood in contrast to an upbeat profit outlook and its recent success in raising prices, which boosted profit before tax by US$1 billion overall in the third quarter, the report noted. 

GM reported third-quarter net income of US$2.53 billion, compared with a loss last year of US$2.98 billion. Last year’s quarter included a charge related to Europe. 

Revenue rose 6.4 percent to US$35.8 billion, above the US$34.85 billion analysts had expected. 

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