Volkswagen and Ford reveal new details about their self-driving partnership.

Ford and German automaker Volkswagen are reportedly close to finalizing a new joint venture to develop self-driving vehicles and technologies, according to The Wall Street Journal.

The deal will build off a separate agreement the firms announced earlier this year. VW will reportedly invest $1.7 billion in, which is Ford’s autonomous vehicle (AV) technology subsidiary.

The investment will give both Ford and VW a 50% stake in Argo, effectively making it a joint venture. VW may also fold other parts of its business into the joint venture, including Audi’s self-driving tech development unit and Moia, VW’s mobility services segment.

The joint venture will focus on two areas: the joint development of self-driving tech, and the merging of production processes. When it was first reported the automakers were considering a partnership, we speculated that it’d be a high-level one focused on EV tech along with knowledge and data sharing. But the reported agreement will instead be AV-focused and also much deeper, honing in on two key areas:

  • AV technologies: Developing autonomous driving tech is immensely expensive — VW and its subsidiaries had allocated over $50 billion to develop new vehicle technologies through 2023, a sizeable chunk of which was set aside for AVs. For its part, Ford said it’ll spend about $800 million annually through 2023 on AV software and hardware — about $4 billion in total. Within the joint venture, VW and Ford will co-develop software and hardware for AVs, helping to alleviate some of the cost burden.
  • Manufacturing and production: The two automakers will reportedly share factories and collaborate on production processes, though it isn’t yet clear in what capacity. To this end, VW is planning a massive expansion of its Chattanooga, Tennessee facility. Sharing common facilities to mass produce new vehicles with a common drivetrain could help the companies scale up jointly developed AV tech in a short period of time.

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