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Volkswagen and Ford Motor Join Forces to Invest Around $7 Billion in Argo AI

As part of the Volkswagen-Ford alliance, Volkswagen will be investing $2.6 billion in technology platform company, Argo AI

Germany: Volkswagen and Ford Motor are teaming up for the development of electrical and autonomous vehicles. Volkswagen AG plans to invest $2.6 billion in Argo AI, including around $1 billion in cash as well as the auto giant’s Munich-based Autonomous Intelligent Driving team. Argo AI is a technology platform company, founded by veterans of Uber Technologies Inc. and Waymo autonomous-driving unit having Ford and Volkswagen as their biggest investors holding equal stakes in the start-up. However, both the companies will be working independently in the marketplace. To work closely with VW, Argo AI plans to open its first office in Europe and continue its work on Level 4 self-driving technology that can be used for ridesharing and deliveries in cities.

CEO of Argo stated, "The two automakers will have equal stakes in Argo and together will own a substantial majority of the startup. Argo’s $7.25 billion valuation will attract outside investors, similar to investment SoftBank Group made in General Motors Co.’s Cruise. The company has got a strong global player, strong in Europe with VW and Ford being strong in the US.”

According to TechSci Research, this partnership would allow both the companies to develop new vehicles with self-driving systems to address the changing requirements in the automotive sectors. The move would also enable both the companies to leverage their expertise and to strengthen their position in the automotive market. Supportive policy framework from various governments for developing driverless vehicles and focus of automakers on enhancing safety features in vehicles are promoting the growth of the global autonomous car technology market through 2024.

According to the published report by TechSci Research, Global Autonomous Car Technology Market Forecast and Opportunities, 2035 – ADAS, Semi-Autonomous, Fully-Autonomous, global autonomous car technology market is expected to witness a CAGR of over 10% until 2035. The market is currently dominated by ADAS segment, which is expected to maintain its dominance over the next twenty years as well. The dominance of this segment can be attributed to anticipated increase in government regulations pertaining to integration of ADAS technologies in passenger cars. Further, semi-autonomous car technology is expected to witness robust growth over the next ten years, owing to anticipated decline in its average selling price coupled with rising volume sales. Region-wise, North America has emerged as the largest contributor for autonomous car technology market, followed by Europe, Asia-Pacific (APAC) and Middle East North Africa (MENA)

According to a report published by TechSci Research, “Europe Semi & Fully Autonomous Vehicle Market By Automation Level (L0, L1, L2, L3 & L4/L5), By Component (Embedded System, Camera, Etc), By Vehicle Type (Passenger Car & Commercial Vehicle), By Country, Competition Forecast & Opportunities, 2016-2030”, Europe semi & fully autonomous vehicle market stood at $ 1.1 billion in 2016 and is projected to grow at a CAGR of over 21% to reach $ 16 billion by 2030. Additionally, growing interests of technology giants such as Google, Intel, etc., is encouraging companies worldwide to focus on the concept of autonomous vehicles. Furthermore, increasing research & development in self-driving concept is anticipated to fuel growth in the market in the coming years.