Volkswagen and Ford introduced plans Friday to work carefully to develop electric- and self-driving automobiles, the newest automakers to associate within the face of huge adjustments rocking the auto business.

Ford (F) CEO Jim Hackett and Volkswagen (VLKAF) CEO Herbert Diess appeared collectively on Wall Avenue Friday, constructing on a rising alliance between the 2 automakers first introduced a yr in the past.

With this newest funding, Volkswagen has agreed to hitch Ford in investing in Argo AI, the autonomous automobile platform firm now valued at $7 billion. The corporate is engaged on creating self-driving expertise for experience sharing and items supply companies in dense city areas.

Ford mentioned it can change into the primary extra automaker to make use of Volkswagen’s electrical automobile structure to construct electrical automobiles for the European market beginning in 2023.

Ford doesn’t at present promote any pure-electric automobiles. Volkswagen, nonetheless attempting to beat injury to its fame from the diesel emissions dishonest scandal, has introduced formidable electrical automobile targets: It pledged to make 40% of its fleet electrical by 2030 and to be CO2 impartial by 2050.

Regardless of speaking for months, joint efforts between the automakers had been modest till now. In January, they mentioned they’d develop business vans and medium-sized pickups starting as early as 2022. However they mentioned on the time they have been investigating how you can develop the following technology of automobiles, reminiscent of electrical and self-driving vehicles.

The businesses, two of the world’s main automakers, are racing to develop electric- and self-driving vehicles on their very own whereas on the identical time penning offers with rivals to assist defray the price of high-tech R&D.

Conventional automakers are apprehensive they may very well be left behind by adjustments available in the market led to by more durable environmental rules in Europe and elsewhere, in addition to new gamers reminiscent of Uber (UBER) and Tesla (TSLA) and doubtlessly deep-pocketed tech firms reminiscent of Google mum or dad Alphabet (GOOG) and Amazon (AMZN).

The alliance follows the same tie-up between German carmakers BMW (BMWYY) and Daimler (DDAIF), which fashioned a three way partnership that may develop driverless expertise. Honda (HMC), for its half, has invested in Basic Motors’ self-driving automobile unit.

Fiat Chrysler (FCAU) and Renault (RNLSY) lately held unsuccessful merger talks motivated by this identical want to share prices. Renault is already part of an alliance with Nissan and Mitsubishi.

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