Ford uses the Volkswagen technology platform, more to reduce the development and production costs of new cars, and to resist risks with partners, but the two will still promote development through competition in the global market.
(Article/Pan Yuchen Editor/Lou Bing) Since the outbreak of the new crown epidemic, the uncertainty of the supply chain has brought a huge blow to the global automotive industry, and has also prompted many enterprises, including industry leaders, to "huddle together for warmth". The alliance between Ford Motor Company and volkswagen group established in 2020 is a typical example of this. Now, the alliance has made new progress.
On March 14, local time, Ford signed an agreement with Volkswagen to expand its partnership in the field of vehicle electrification. Ford will launch an electric model to the European market based on Volkswagen's MEB pure electric modular platform. In addition, Ford will double its planned production of MEB models to 1.2 million units within six years.
It is reported that the first Ford model based on the MEB platform will be an electric crossover, which is expected to roll off the production line at Ford's electric vehicle factory in Cologne, Germany, in 2023, and the initial production is expected to be about 600,000 units. This will also be Ford's second electric model to go public in Europe after the Mustang Mach-E. Ford Motor Europe Chairman Stuart Raleigh said that although the new model uses the Volkswagen technology platform, the brand is unique to Ford.
Also on March 14, Ford announced that it would double its investment in its electric vehicle plant in Cologne, Germany, to $2 billion, and that by 2024, Ford's launch of electric models in Europe would increase to nine.
In addition, in order to ensure the supply of core components of power batteries, Ford also announced that it will establish a joint venture with South Korean battery manufacturer SKI and Turkey's largest industrial group Koc Holding to build a new battery factory in Ankara, the capital of Turkey. The new plant is scheduled to start operations in 2025 with an annual capacity of 30-45 GWh. Just last year, Ford and SKI announced an investment of $11 billion to build the largest battery factory in U.S. history in Kentucky. According to the plan, Ford will reach 240 GWh of global battery annual production by 2030.
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This cooperation based on the MEB platform is an important part of the strengthening strategic alliance between Volkswagen and Ford. As early as June 2018, Volkswagen and Ford had signed a memorandum of understanding on exploring alliances. In June 2020, the two automakers formally signed a strategic alliance cooperation agreement to strengthen collaboration on electrification, commercial vehicles and autonomous driving.
The co-investment in self-driving startup Argo AI is an opportunity for the two auto giants to start a practical collaboration. As early as 2017, Ford acquired ownership and open interests in Argo by injecting $1 billion in the company, while Volkswagen also injected $2.6 billion into Argo after failing to acquire self-driving companies such as Aurora and Waymo. The autonomous driving business thus becomes the link between the two major automobile groups.
But more importantly, the alliance between Volkswagen and Ford is based on complementarity between each other's strengths and avoidance of weaknesses.
After the "Dieselgate" incident in 2015, Volkswagen fell further into the abyss in the originally weak US market, and could only rely on US companies to reopen the situation. Ford's influence in the U.S. commercial vehicle market is exactly what the former needs.
According to the agreement reached between the two parties, from 2021, Volkswagen will develop city vans based on Caddy models, and Ford will be responsible for developing light vans; in 2022, Volkswagen will launch an Amarok series of medium-sized pickup trucks developed and produced by Ford, with the expected total production of the above models in the product cycle reaching 8 million units.
On the other hand, Ford wants to penetrate deep into the European market, and it is also facing pressure from the gradual tightening of carbon emission policies. At present, Ford has launched three electric models in North America, including the Mustang Mach-E, F-150 Lightning and pure electric All-Smooth, of which the Mustang Mach-E has been sold to the Chinese and European markets.
Choosing to use the Volkswagen platform to build cars, Ford can not only save research and development costs, but also obtain the key to further open up the European electric vehicle market. Before the Musicang Mach-E was officially launched, there were already rumors that the model would be produced on the MEB platform, although the rumor was immediately debunked by Ford, but this further cooperation with Volkswagen confirmed that Ford did have plans to produce MEB platform models.
After the "Dieselgate" incident, the Volkswagen Group has become the largest new energy vehicle manufacturer in Europe by increasing investment in vehicle electrification and launching a series of new models based on the MEB platform. At present, the Volkswagen Group has five brands and 10 electric vehicles based on MEB, and about 300,000 cars were produced on the platform last year.
In the past 2021, the Volkswagen Group has sold more than 760,000 new energy vehicles in total, an increase of more than 80% year-on-year, of which more than 450,000 are pure electric vehicles, almost double the same period last year.
For Volkswagen, the production and sales of cars alone can no longer meet the demand, and if the MEB platform can be opened to more automakers, it will help it transform into an electric vehicle platform supplier and become another pillar in addition to its core business.
Thomas Schmel, CEO of Volkswagen Group Components, said that the key to a breakthrough in vehicle electrification lies in efficiency and profitability. The MEB platform has a high degree of freedom in model design, covering a wide range of market segments from cars and SUVs to micro-passengers, while the MEB platform is conducive to improving production efficiency and reducing costs through economies of scale. The cooperation between Volkswagen and Ford based on the MEB platform will accelerate the transformation of the two companies.
To this end, Volkswagen has also established a new department called "Platform Business" to establish partnerships with other brands on platforms. In addition, Volkswagen also said that the new platform SSP, which will be released in 2024, will also be shared with partners.
But in addition to Ford, no other car companies have joined this camp. Among the head car companies, how many are willing to become the "shell" under the volkswagen system in the electrification competition of the hammer and baht? Time will tell.
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It is worth mentioning that unlike the Renault-Nissan-Mitsubishi alliance and the Stellantis Group (formed by the merger of Peugeot Citroen and Fiat Chrysler), the alliance relationship between Volkswagen and Ford does not involve equity transactions, focusing on cooperation at the technical level.
In the context of the global supply chain crisis caused by the epidemic, Ford adopted the Volkswagen technology platform, more to reduce the development and production costs of new cars, and to resist risks with partners, without affecting the company's own operations and relatively independent electrification planning. When the two sides announced the agreement, they also jointly pointed out that the two will promote development through competition in the global market.
However, at this stage, Europe and North America are the dominant markets for Volkswagen and Ford, respectively, and there is no direct conflict between the two sides for the time being, so the complementary role is greater.
According to Ford's established plan, the company will produce 2 million electric vehicles per year by 2026, only electric passenger cars in Europe by 2030, and only electric light commercial vehicles by 2035.
However, in China, the world's largest new energy vehicle market, Ford's performance is not satisfactory. Although the Mustang Mach-E produced by Changan Ford was rolled off the production line in China last year, it was trapped by factors such as the supply chain and has not been successfully delivered so far. At present, Ford's new energy vehicles in China have sales statistics only one plug-in hybrid version of Ruiji, with an average monthly sales of only 50 vehicles.
In contrast, as An ally of Ford, Volkswagen's electrification layout in China is much more perfect. At present, Volkswagen has established two production lines for the production of MEB models through two joint venture partners. In the past 2021, Volkswagen has sold a total of 5 ID series pure electric vehicles in China, and the cumulative delivery volume has exceeded 70,000 vehicles. It can be seen that in order to catch up with Volkswagen's performance in the Chinese market, Ford is far from enough with only one "electric horse".
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