(Add details about the estimated valuation of Argo with the investment of VW)
By paul lienert
DETROIT, July 11 (Reuters) – An expanded alliance between Ford Motor Co and Volkswagen AG that includes an association in the Ford Argo AI auto-driving unit could redraw the power balance in autonomous vehicles.
A Ford-VW collaboration with Argo, the new Pittsburgh-based company that has spearheaded the development of Ford's automatic driving since 2017, could help reduce each automaker's engineering and financial burden. It could also speed up the deployment schedules of both, which have said they plan to start autonomous vehicles in 2021.
Argo has been overlooked as Waymo, the automatic driving subsidiary of Alphabet Inc., has deployed its vans and the General Motors Co subsidiary Cruise Automation has raised billions of dollars in investments.
With VW, the world's largest automaker by sales volume last year, Argo would be aligned with a partner with substantial scale and resources.
Ford and VW said on Thursday they are expanding their global alliance and that the chief executives of the two companies will hold a press conference in New York on Friday, where they are expected to announce details of a technology exchange agreement.
A Ford-VW agreement involving Argo could also have broader implications for similar alliances, as well as the valuations of related emerging companies.
Previous estimates of Argo's value have ranged between $ 2 billion and $ 4 billion. Depending on the size of a VW investment, that valuation could increase to $ 7 billion, according to a source familiar with the Ford-VW discussions.
In comparison, the value of Cruise increased to $ 19 billion earlier this year after it attracted more than $ 6 billion in investments from SoftBank Group, Honda Motor Co and T. Rowe Price.
The value of the travel services company Uber Technologies & # 39; Advanced Technologies Group & # 39; It rose to more than $ 7 billion earlier this year after SoftBank, Toyota Motor Corp and Denso Corp invested $ 1 billion.
Those ratings are dwarfed with the Waymo estimates, which is widely recognized as the industry leader. Morgan Stanley values Waymo at up to $ 175 billion, while Jefferies values the company at up to $ 250 billion.
Both estimates take into account Waymo's fledgling robotaxi business and possible future revenue streams from a delivery service and integrated services in vehicles, including e-commerce and information and entertainment.
VW, whose Audi unit heads the Automated Intelligence Driving (AID) unit of the German automaker in Munich, allegedly considered an investment of $ 13.7 billion last year in Waymo for a 10 percent stake that would have valued Waymo in $ 137 billion.
VW recently concluded a development agreement with Aurora, Silicon Valley's new self-driving company that includes Hyundai Motor Co and Fiat Chrysler Automobiles among its customers. Fiat Chrysler also supplies vehicles to Waymo.
Aurora is valued at $ 2.5 billion. Investors include Hyundai and Amazon Inc.
Argo, which is majority owned by US automaker No. 2. UU., It is part of Ford Autonomous Vehicles LLC. Ford created the unit in 2018, committing to invest $ 4 billion until 2023. (Paul Lienert's report in Detroit, Edited by Dan Grebler and Leslie Adler)