Ford and Volkswagen discuss EV sharing

Ford and Volkswagen are expected to announce a joint development program for self-driving cars and electric vehicles (EVs) before the end of the year, according to news agency Reuters.

An anonymous source has told Reuters that the two companies are currently engaged in 'exploratory talks' that could eventually lead to product-development cost savings worth billions of US dollars.

The two companies are known to be collaborating on commercial vehicle development – which could include a jointly-developed replacement for Ford Ranger and Volkswagen Amarok, although that's believed to be unlikely in the short term.

Expanding the strategic alliance to include product development for EVs and autonomous cars could draw on each company's respective expertise – Ford with its high-profile autonomous motoring work and VW with its EV development lead. Neither company is prepared to confirm the report currently.

"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.

Volkswagen has been casting around for ways to cut development costs over some years now, fuelled in part by anticipated penalties for the dieselgate scandal, but the manufacturer has also committed to building EVs on a large scale for the burgeoning Chinese market.

Ford has already announced it will end production of the Fusion passenger car from 2020, leaving the badge-engineered Mondeo in limbo beyond its next facelift. Since much of Ford's autonomous motoring development program is based around the current Fusion, the program may migrate to a different model for a test bed.

There's no suggestion the blue oval will hand over its intellectual property to VW for a shared autonomous motoring program. In fact, Ford announced in July that it was acquiring a train station in Detroit as a venue for a new technology hub with autonomous motoring on the agenda. The converted station will house 5000 workers.

Ford will invest US$4 billion between now and 2023 in an offshoot, Ford Autonomous Vehicles LLC. This includes US$1 billion for the 2017 acquisition of autonomous motoring start-up, Argo AI. And in other news, Ford has also entered into a two-year joint testing project with Chinese brand Baidu. Testing in China will commence before the end of this year.

"Working with a leading tech partner like Baidu allows us to leverage new opportunities in China to offer innovative solutions that improve safety, convenience and the overall mobility experience," said Sherif Marakby, president of Ford Autonomous Vehicles LLC.

"This project marks a new milestone in the partnership between Ford and Baidu, and supports Ford’s vision to design smart vehicles that transform how we get around."

Stringent emissions legislation in Europe is propelling different companies to 'buddy up' for the development of zero-emissions EVs. The tie-up with Ford has been described as theoretically possible by Volkswagen CFO, Frank Witter, according to Reuters.

Volkswagen is understood to be committing investment worth 34 billion euros in EV development and autonomous motoring between now and 2022. The company expects to produce between two and three million battery/electric cars before 2025.