While electric vehicles have managed to become a reality, the next big project for some of the biggest car companies and technological innovators are self-driving cars. Although it is true that prototypes have been made and they seem functional, the challenge is that of producing autonomous cars at an industrial scale. Hence, some of the biggest car manufacturing companies are now investing in tech startups that specialize in creating autonomous vehicle manufacturing and creating their own divisions as well. In a new development, German car manufacturing giant Volkswagen has decided to invest in Argo AI, an autonomous car manufacturing company that has been backed by Ford already.

The fresh investment from Volkswagen is going to give Argo AI a total valuation of $7 billion at this point. The investment is a hefty one. Volkswagen is going to invest a total of $2.6 billion, out of which $ 1 billion will be in cash and in addition to that, Argo is also going to be supplied with an Audi Autonomous Intelligence Driving unit. The scale of the investment is a clear indication of the sort of money that needs to spend in order to produce viable self-driving cars. However, in this regard, it needs to be stated that the bigger story from this Volkswagen investment is the fact that this is a continuation of the fact that the German company had formed with Ford last year.

Despite the recent troubles that the two companies have gone through, they remain two of the richest and most influential car manufacturers in the world, which is why this development is something that should not be seen as just another investment. It could mean the strengthening of an alliance that has the strength of taking on some of the bigger car makers in the world when it comes to competition. An analyst of the automobile industry at Gartner Inc. stated,

“It’s a big, well-financed effort that puts them easily on the same footing as a Waymo or a GM. By combining forces, both companies bring a significant amount to the table. This is a long-term strategic play.”