Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa Bay news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Charlotte news in your inbox

Catch up on the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Aïda Amer/Axios

Ford and Volkswagen said Tuesday they plan to pool their efforts on electric and self-driving cars — proof that even some of the most powerful automakers in the world aren’t sure where the technology is headed.

The big picture: Strategic bets are becoming larger and a lot riskier for the auto industry, which used to worry only about whether next year's model would sell.

Now, traditional sources of revenue are drying up and new players are competing for tomorrow's customers. It’s an awkward transition for most, and companies like Ford and VW must decide how much to expose themselves to a future that is far but certain.

Driving the news: Ford and VW are forming a global alliance to develop commercial vans and medium-sized pickups together while exploring broader cooperation on future battery-powered and autonomous vehicles and services.

  • Their first jointly developed vehicles would arrive by 2022, producing savings that would generate stronger profits starting in 2023.
  • Ford will take the lead on pickup trucks and large delivery vans, while VW will develop small vans for crowded cities.
  • The deal has practical implications near-term, and allows them to hedge their bets on the future.
  • "Both Ford and VW expect an uptick in EVs and AVs, but that's not determined yet. We still have to prove to the world that people will want them," Ford CEO James Hackett told reporters and analysts at the Detroit auto show.

What's happening: Global automakers are investing some $255 billion to bring more than 200 EVs to market by 2022, knowing most will be unprofitable, says global consulting firm AlixPartners.

  • Another $61 billion — just the opening ante, Alix says — is being spent by carmakers and tech giants on future self-driving cars.
  • To share the cost, more companies are collaborating, including Fiat Chrysler-Waymo, GM-Honda, and Toyota-Uber.

Yes, but: Consumers aren’t yet on board. EVs today account for less than 3% of worldwide car sales and most Americans say they're afraid to ride in an AV.

  • An AlixPartners survey found consumers say they are willing to pay $2,300 extra for AV technology — systems that cost about 10 times more than that today.
"No consumer is saying I want a self-driving vehicle. What they want is safe, convenient and affordable mobility. That hasn't changed in 20 years."
— Joe Vitale, global automotive leader, Deloitte

The bottom line: Collaboration may be the best strategy in the face of what AlixPartners warns is a "monumental capital drain."

"We are a big company, with large resources, but in view of what this industry is going to face, partnerships are going to be necessary."
— Herbert Diess, CEO, Volkswagen AG

PS: Everyone should reread the late Fiat Chrysler CEO Sergio Marchionne's 2015 presentation, "Confessions of a Capital Junkie," which warned that the industry could go broke chasing redundant technologies.

Go deeper

Dan Primack, author of Pro Rata
43 mins ago - Podcasts

Net neutrality on the line under Biden

Federal net neutrality rules are back on the table in the Biden administration, after being nixed by Trump, but now might be complicated by the debate over social media companies' behavior.

Axios Re:Cap digs into why net neutrality matters and what comes next with Nilay Patel, editor-in-chief of The Verge and host of the Decoder podcast.

House grants waiver for retired Gen. Lloyd Austin to lead Pentagon

Defense Secretary nominee Lloyd Austin Photo: Chip Somodevilla/Getty Images

The House voted 326-78 on Thursday to grant retired Gen. Lloyd Austin a waiver to lead the Pentagon, clearing the way for the Senate to confirm President Biden's nominee for defense secretary as early as this week.

Why it matters: Austin's nomination received pushback from some lawmakers, including Democrats, who cited a law that requires officers be out of the military for at least seven years before taking the job — a statute intended to reinforce the tradition of civilian control of the Pentagon.

Amanda Gorman steals the show on Inauguration Day

Data: NewsWhip; Chart: Axios Visuals

Poet Amanda Gorman by far generated the most average interactions on social media on Inauguration Day, according to exclusive data from NewsWhip.