Why is vw using ford engines

Overview

The Volkswagen-Ford partnership represents a significant shift in automotive industry collaboration, driven by the need to share development costs for new technologies. Announced in January 2019, this strategic alliance began with commercial vehicle cooperation but expanded to include engine sharing and electric vehicle development. Volkswagen, facing diesel emissions challenges post-2015, sought reliable diesel technology while Ford needed to strengthen its European market position. The partnership specifically includes Ford supplying its 2.0-liter EcoBlue diesel engine for Volkswagen's Amarok pickup truck, which debuted in the second-generation Amarok launched in 2022. This engine-sharing arrangement helps Volkswagen maintain diesel options in markets where diesel remains popular, particularly for commercial and off-road applications, while allowing the company to focus its engineering resources on electric vehicle development through its MEB platform.

How It Works

The engine-sharing arrangement operates through a supply agreement where Ford manufactures the 2.0-liter EcoBlue diesel engine at its Dagenham plant in the UK, then ships these engines to Volkswagen's manufacturing facilities. Volkswagen integrates these Ford-sourced engines into its Amarok pickup trucks alongside its own V6 diesel options. The partnership extends beyond simple engine supply to include joint development of future technologies, particularly for electric vehicles and autonomous driving systems. Both companies maintain separate branding and sales channels while sharing development costs for new platforms. The collaboration is structured through multiple memoranda of understanding covering different vehicle segments, with specific agreements for commercial vehicles, midsize pickups, and electric vehicle architecture. This allows each company to specialize in areas where they have particular expertise while benefiting from shared research and development investments.

Why It Matters

This partnership matters because it represents a new model of automotive industry collaboration where traditional competitors work together to address the massive costs of developing electric and autonomous vehicles. For Volkswagen, using Ford engines allows continued offering of diesel vehicles without diverting resources from their $86 billion electric vehicle investment plan. For Ford, the partnership provides additional revenue streams and helps justify continued investment in diesel technology for specific markets. The collaboration also enables both companies to compete more effectively against Tesla and Chinese electric vehicle manufacturers by pooling resources. In practical terms, consumers benefit from vehicles that combine Volkswagen's design and Ford's engine technology, potentially offering better value and performance. The partnership also has strategic importance for European manufacturing, helping maintain engine production facilities that might otherwise face closure during the transition to electrification.