Ford Motor Company and Volkswagen AG signed agreements that expand their global alliance (earlier post) to meet rapidly evolving needs of their respective customers in Europe and other regions by leveraging complementary strengths in midsize pickup trucks and commercial and electric vehicles. Plans for the agreements were first announced by Ford and Volkswagen last July.

The alliance will:

• Produce a medium pickup truck engineered and built by Ford, for sale by Volkswagen as the Amarok starting in 2022 within the Volkswagen Commercial Vehicles lineup.

• Further strengthen the commercial-vehicles businesses of both companies as early as 2021 with a city delivery van based on the latest Caddy model, developed and built by Volkswagen Commercial Vehicles and later a 1-ton cargo van created by Ford.

• Lead to a highly differentiated Ford electric vehicle for Europe by 2023 built on Volkswagen’s Modular Electric Drive, or MEB, Toolkit, expanding on Ford’s zero-emission capabilities in the region.

During the lifecycles of the products, the companies expect to produce up to a combined 8 million of the medium pickup truck and both commercial vans included in the commercial relationships.

Ford’s use of Volkswagen’s MEB architecture in Europe will represent another cornerstone in Volkswagen’s electric vehicle strategy, and further efforts by both companies to fulfill their commitments to the Paris 2015 Agreement. Volkswagen and Ford plan to explore additional ways to cooperate on electric vehicles.

Over several years starting in 2023, Ford could deliver 600,000 electric vehicles atop the MEB architecture, which is designed to combine space and performance with electric drive.The vehicle, which will be designed and engineered by Ford in Cologne-Merkenich, will add another nameplate to its own all-electric Mustang Mach-E, which will be introduced in 2021.

Additionally, the companies will both work with Argo AI to form distinct, highly capable autonomous-vehicle businesses based on Argo AI’s self-driving technology. Last week, Volkswagen closed its previously announced investment in Argo AI, the Pittsburgh-based company in which Ford already had ownership and development interests.

Volkswagen and Ford independently choosing to invest in Argo AI illustrates the technical leadership and progress of Argo AI’s self-driving system, and how alliances can help enable development of breakthrough technologies that require substantial time and resources. Argo AI’s SDS is the first with commercial deployment plans for both Europe and the US. The global reach of Ford and Volkswagen will give Argo AI’s platform the largest geographic deployment potential of any autonomous driving technology to date. Reach and scale are important factors in developing an SDS that is robust and cost-efficient.

The Volkswagen/Ford alliance does not include cross-ownership between the companies, which will remain competitors in the marketplace.