Ford Motor and Volkswagen Group said they are expanding their global alliance with deals that are expected to involve collaboration on electric and autonomous vehicles.
The two companies will announce further details on an agreement to share electric and autonomous car technologies at a press and investor conference at 2 p.m. Central European Time (8 a.m. EST) on Friday, which will be livestreamed.
Volkswagen CEO Herbert Diess and Ford CEO Jim Hackett will appear together, the automakers said in a news release on Thursday.
The automakers could outline more than one agreement. One potential element could be an investment by Volkswagen in Argo AI, the self-driving vehicle systems company majority owned by Ford.
Ford created Ford Autonomous Vehicles LLC in 2018, pledging to invest $4 billion until 2023. It has sought outside investors to help share the spiraling cost of developing autonomous vehicle technology. Argo AI, a Pittsburgh startup bought by Ford in 2017, is part of that unit.
Ford is also expected to license VW Group's MEB platform for battery-powered cars. VW has developed the platform formass-market long range EVs for Europe, China and the U.S. It will underpin VW brand's ID electric car family and EVs for Audi, Skoda and Seat.
Ford is developing a family of electric vehicles aimed at European markets and would leverage access to the MEB architecture to help comply with stricter European CO2 emissions reduction rules.
Analysts at Citi said Ford licensing VW's MEB platform would be a "transformational" step.
Ford may make "cost-plus" payments to VW on the order of 400 million euros ($450 million) in 2020 alone, Angus Tweedie, a Citigroup analyst, estimated.
It would help VW hit 2020 earnings estimates by "guaranteeing" some profit from EVs next year, and also would likely provide VW with "an unassailable scale advantage in the market," Tweedie said. Such a deal could boost VW's output of battery-electric vehicles in Europe next year to 400,000 units, he wrote in a report.
VW Group says the MEB platform will be even more scalable than the MQB architecture used for 80 percent of the group’s combustion engine cars.
VW and Ford have been discussing for months how to share the burdens of investing in future electric and autonomous vehicles. The apparent agreement between the two global manufacturers is the latest sign of how pressure to cut carbon emissions and fend off challengers from the technology industry is driving consolidation in the auto industry.
Rather than continue developing their own, proprietary technology, automakers are sharing vehicle components and technologies.
As with Ford and VW, much of this sharing is happening without outright takeovers and mergers.
Honda last year joined forces with General Motors to develop autonomous vehicles by investing $2.75 billion in GM's Cruise Automation self-driving vehicle unit. Alphabet's Waymo has agreements with Fiat Chrysler Automobiles and Jaguar Land Rover to buy and equip vehicles with its self-driving systems..
VW signed a deal in March to develop a pickup using a Ford platform, and the automakers have been in talks about extending the alliance to include autonomous driving and mobility services, as well as Ford's use of VW's MEB electric-vehicle platform.
In June, Volkswagen ended its partnership with software firm Aurora only days after the self-driving software startup announced an alliance with Fiat Chrysler.
Nick Gibbs of Automotive News Europe and Bloomberg contributed to this report