Ford Motor Co. (F) - Get Report shares jumped higher Tuesday after Germany's Volkswagen AG (VWAGY) confirmed a $2.6 billion investment in Argo AI, a self-driving stat-up jointly controlled by the two carmakers.
Ford said in a Securities and Exchange Commission filing that it expects to book a second quarter gain from the investment, which the two carmakers first established in July of last year. Volkswagen said at the time that it would invest $3.1 billion into the venture, a figure that includes the purchase of $500 million Argo shares owned by Ford.
"In addition to shared development costs, the deal with Volkswagen makes Argo AI’s self-driving software the first with commercial deployment plans for both Europe and the U.S.," said Ford's CEO of autonomous vehicles, John Lawler,, in a late Monday blogpost. "Because it can tap into both automakers’ global reach, Argo AI’s platform has the largest geographic deployment potential of any autonomous driving technology to date."
"Scale and geographic reach are important factors in developing a self-driving system that is robust and cost efficient." he added.
Ford shares were marked 0.4% higher in early trading Tuesday to change hands at $5.90 each, although that move would still leave the stock with a year-to-date decline of more than 37%.
Ford pulled its full-year profit guidance in late April after forecasting a deeper-than-expected current quarter loss of more than $5 billion.
Ford said it burned through $2.2 billion in cash over the first quarter, while posting a wider-than-expected adjusted loss of 23 cents a share on sales of $34.32 billion, but insisted it had enough cash to last through the year after tapping credit markets in early April.