(Reuters) – Ford Motor Co <F.N> and Volkswagen AG <VOWG_p.DE> said on Wednesday they would make up to 8 million units of medium pickup trucks and commercial vans over the lifecycle of the vehicles as part of an alliance announced last year.
The alliance was forged in January 2019 and expanded later, as carmakers join forces to invest in electric and self-driving technology in a bid to save billions of dollars.
The automakers will collaborate on a city van built by Volkswagen, a 1-ton cargo van developed by Ford, and a Volkswagen medium pickup built on the Ford Ranger platform, beginning 2022.
The No. 2 U.S. automaker will also develop a new electric vehicle for Europe based on Volkswagen’s Modular Electric Drive toolkit by 2023, and deliver more than 600,000 units over several years.
“This collaboration will efficiently drive down development costs, allowing broader global distribution of electric and commercial vehicles, and enhance the positions of both companies,” Volkswagen Group CEO Herbert Diess said on Wednesday.
The companies will also develop an autonomous-vehicle business based on Argo AI’s self-driving technology.
Last week, Volkswagen closed a $2.6 billion investment in Argo AI, Ford’s self-driving cars venture, which is now jointly controlled by the alliance.
(Reporting by Sanjana Shivdas in Bengaluru; Editing by Vinay Dwivedi and Sriraj Kalluvila)