June 10 (UPI) -- Ford Motor Company and Volkswagen AG said Wednesday they signed an agreement to collaborate on numerous projects, including development of electric cars, self-driving technology and new commercial vehicles.
The deal is part of the automakers' investment in self-driving service Argo AI, announced last week, which they say will produce a self-driving vehicle.
The two companies said they also will work together on commercial vehicles, including a city van created and built by Volkswagen Commercial Vehicles and a one-ton cargo van engineered by Ford. Volkswagen will also create a medium pickup built on the Ford Ranger platform.
Ford said it will build an electric vehicle for Europe based on Volkswagen's Modular Electric Drive toolkit starting in 2023. The companies expect the venture to produce 600,000-plus units annually.
"More than ever it is vital to set up resilient alliances between strong companies," Volkswagen Group CEO Herbert Diess said in a statement. "This collaboration will efficiently drive down development costs, allowing broader global distribution of electric and commercial vehicles, and enhance the positions of both companies."
The automakers said the joint projects don't suggest cross-ownership, but rather it creates "significant efficiencies" for Ford and Volkswagen.
"This creates a huge opportunity to innovate and solve many of the world's transportation challenges," Ford CEO Jim Hackett said. "Even as companies need to be selective about how they use their cash."
The companies plan to spend more than $4 billion through 2023 on Argo AI.