Okay. Good morning, everyone. You ready to get started? Morning. Thanks for joining us. Hi, my name's Mark Truby. I'm with the Ford Communications Department. I'm joined here by Marc Langendorf. He's Head of Global Corporate Communications for Volkswagen. Thank you to all of you who have joined us today in New York, as well as those joining by phone and around the world for this important update on the Volkswagen AG Ford Motor Company collaboration. On stage today, we have Jim Hackett, President and CEO of Ford Motor Company, and of course, Dr. Herbert Diess, CEO of Volkswagen AG. Also today, here in the front row, we're joined by several senior leaders from Ford, Volkswagen, Argo AI, and AID.
Following brief remarks, we will take questions from the investment community first on the phone for about 30 minutes. Then we'll answer questions here from the media here in the room as well as by phone. Today's updates include some Forward-Looking statements about expectations for future performance. Actual results may vary. At this time, I'm pleased to turn it over to Jim Hackett.
Thank you, Mark. Good morning, everyone. I'd like to start first with a sincere thank you to what is an emerging alliance and partner with my friend, Herbert Diess. Thank you, Herbert, and the whole team at VW in working this out and all that we've accomplished together. I've really enjoyed my relationship with Herbert. We smile as much as we do anything when we're talking together. Working across companies, continents, and cultures is no easy task, and it's a credit to all of you that we've been cooperating effectively for the past year and finding ways to win in our very competitive market. I'd also like to give a heartfelt thank you to the Argo team led by Peter Rander and Bryan Salesky. They have the pioneer role here, and Bryan's going to join us on stage here in a moment.
Well, now we stand at the precipice of the biggest shift in transportation since someone known as Henry Ford initiated over 116 years ago. Our industry and the world are being upended by technology and innovation, and there's a deep societal need for smarter solutions for our overstressed, I call it the tyranny of traffic, transportation system. Just as everything changed with the introduction of the automobile back in Henry's day, from how we build our cars, to the propulsion systems they run on, to the way we buy them, the way we hail them, or even the way they're driven. All of that's changing. At Ford, we believe that the freedom of movement drives human progress. With the leaps in computing, connectivity, artificial intelligence, and electrification, we have the best opportunity in decades to drive performance in new vehicles that serve people in ways we never thought possible.
And the opportunity to work together in unprecedented ways with connected customers, the communities they live in, and business partners, well, that is just as exciting as well. Most of all, the opportunity to usher in a smarter, safer, cleaner, and, of course, more efficient, more safe transportation system. It is going to improve lives in very tangible ways. I do not think I am exaggerating that opportunity. In this moment of change, new approaches for Ford include teaming with partners like Volkswagen to help each of our companies capitalize on that future. Building on that work, we are now confirming that we will extend our collaboration into autonomous technology. We share the view that technology is an enabler and it is not an end to itself. That was one of the first things that Herbert and I aligned on. People will remain our constant focus in this ever-changing world.
Both companies start with the customer experience that will make a difference for people and the communities they are in, and of course, the planet that we all inhabit. Then we work backwards to design products and services to deliver on that special promise. Self-driving vehicles are going to open up a whole new industry that can fundamentally change how not only people move, but the goods that serve you are moved. Two years ago, Ford made a $1 billion commitment to a startup company called Argo AI. Go online. Bryan maybe will tell you about the naming of Argo and where that comes from. This was an artificial intelligence robotics firm, and there were not many of these, that was led by some of the world's most creative, and we know, sought-after experts.
That investment has proven to be mutually beneficial because Argo had leading robotics expertise, a culture aligned very quickly around safety and a healthy respect for this complex challenge of developing the safest self-driving system. Both Bryan and I have been very conservative in the way we have described the emergence of this technology, and we found that Herbert shares this view. Bill Gates is famous for saying, "You overestimate the arrival and you underestimate the impact." So nothing will be more important in our future when it is ready. Ford brought the world-class experience of our product development, manufacturing, and business teams to the Argo relationship to ensure that there was an integration between the products and services that will reach that safe, reliable, and enjoyment target for people.
Today, I am so gratified to have Volkswagen join us on stage and make their news about an investment commitment in Argo. This means that already Argo is among the most capable autonomous vehicle platform developers in the world. With today's announcement, Argo is one of the best-resourced, with an estimated valuation of more than $7 billion. Folks, this is big news because the combination of these two companies in this industry make this instantaneously the largest platform working on this. Ford and VW could have partnered with anyone. Everyone was after us, but we both chose Argo. Together, we are on a path to create the industry's leading autonomous vehicle platform. Having two global automakers as customers is going to be leverage they can use because they can recruit and retain more talent where the race will arguably be won or lost.
We'll all benefit with Argo's experience in working closely. This is one of Bryan Salesky's dreams that I hope he talks about, which is to work side by side as technologists with the vehicle manufacturers so you have full vehicle integration of the technology. Here's how we'll all work together. First, we will collaborate, VW and Ford, with Argo on what we call the self-driving system or the SDS. That means that Ford and Volkswagen will be able to reduce what is a large investment for this AV business. We'll also be able to co-create common AV platforms for now and in the future. This helps in the downstream manufacturing so that you're not doing a unicorn every time you have different brands or you change models. We can share valuable data with Argo to help build the best visioning and mapping models and data utilization analysis.
These vehicles are chimneys of data that'll be spewing from the vehicles that they get to use in the development of this product. Second, we'll share costs and expertise so we can each design and engineer unique, safe and self-efficient, excuse me, self-driving vehicles that are efficient. Ford and VW, let me point out, remain competitors. We've been purposeful in designing this. As you see the outer ring of our diagram, that's where we compete. We're going to use the Argo SDS platform, and then we each will deliver unique experiences for our customers. At Ford, we believe that data can help us continually improve those vehicles and improve our customer experience. So we're taking a community-minded approach that focuses where the needs will be in moving goods and people. Think about this.
AVs are going to offer affordable ways to get people from their homes to public transportation. There's a neighborhood in Ohio where the mayor and I talked about these folks cannot get jobs because they're not on the public transportation system. My mother, who suffered from Alzheimer's and had trouble getting to see her doctor. This kind of technology solves incredible social dilemmas. With AVs, we have practical things like there's a reduced need for parking that's going to enable communities to reimagine and reuse space in new ways. That space could be used for parks and recreation. We have an entity called Ford AV LLC, which is on that outer ring, and it's working with small businesses and large partners already, Postmates, Walmart and Domino's, to test the most user-friendly and efficient ways to deliver goods.
In fact, Bryan Salesky will share with you, we've been testing autonomous technology in five American cities. Let me say to you, these aren't easy cities where the streets are wide and only retired people are driving. These are very difficult challenges and on purpose so that we learn faster and design what is a smart, scalable platform. You'll be able to check out actually one of the Argo AVs outside. Let me just point out, those are early prototypes. That's not actually the way the vehicle's going to look in its evolution, but we got to get something in test, and that's what's there. At Ford, we're also obsessed with creating a high-value self-driving experience with the best user experience and of course, making these safe and trusted. So the stakes are high there.
As this product hits the market, who is going to win the hearts and minds of people for safety and trust? If we have learned anything from technology in the revolution we have all lived in the past two decades, it is this. There is only going to be a few winners who create the leading platforms for the future. We cannot be late, Ford cannot be late, and we have to be great. We are on track to start the commercialization of this, as we have said, with initiatives starting in 2021. But listen, as I came into the job, I told you that Herbert and I realized it is not about being first or that date is not as important as we get this design and technology right. It is about being the best.
We are a company with the cars that parents have trusted their kids to drive for 116 years. All of this trust is rooted in the fact that we have worked so hard with an unyielding commitment to safety. I just want you to see the departure here with new technologies is totally connected to that vision. It is critical to winning this market and driving human progress through the freedom of movement in a new era, because it is not going to happen the way the cartoon suggests, where everyone gives up their whole life and just switches to the new. Humans evolve themselves into this as you think about the way you used your computer and your smartphone. That is the first announcement, the Ford, VW, and the Argo AI alliance about AV. Quite excited about that.
But there is another one that is big that came from Herbert and I starting to talk about Argo AI. We are also excited today to announce that Ford will become the first additional automaker to use VW's MEB electrical vehicle architecture for a high-volume Ford European zero emissions vehicle. Now we are going to design this model at our Ford Cologne Merkenich German Engineering Center. Ford of Europe, we are not saying where, will start building it in 2023. Plus, the teams are working on an idea for a second EV model for our European lineup based on that same platform. This is an impressive product, and it is another important building block in my characterization of our renaissance in Europe, the Ford renaissance of our brand. We are undergoing right now the most comprehensive redesign of Ford in the history of our business there.
We focus on sustainable profitability by growing our commercial vehicle business and by offering a fresh lineup of EVs, SUVs, performance models, and we have an import strategy that is bringing some great products like Mustang and Explorer. Over the next five years, Ford will introduce four new nameplates for the European market, including a new fully electric Mustang-inspired utility vehicle. You will want to get in line for that one. Today's announcement only accelerates that European plan, and I know that this is not only a win for Ford, but it is a win for VW, who has the courage to make this investment ahead of the demand for these vehicles. And the winner is going to be our customers.
We will be able to offer vehicles that meet their expectations, they match the European kind of experience and roads, and they are going to be built and designed Ford proud. So more importantly, this gets us closer to Bill Ford's vision when he talked at TED in 2011 for a zero emissions future. He was very clear that said, if we cut and paste the old system as Asia was growing, we will hurt the world.
So we are on a course here to build an industrial company that not only we are proud of environmentally, but now we can deploy an entire portfolio of electrified vehicles. These are not just smaller cars. They are our iconic nameplates, the F-150 and the Mustang. Of course, recently, the news is out there that we also invested in a company, a startup, called Rivian. This allowed us to speed our learning and EV go-to-market plans.
All this together is a portfolio that will help us serve customers and meet that challenge that Bill laid out in 2011, which is our commitment to the Paris Climate Agreement. This is a commitment that we are really steadfast in meeting. Well, these developments that we are talking with you about today represent the latest progress in what is a burgeoning collaboration with Volkswagen. Back in January, we already had a press conference, and we announced a deal to develop commercial vans and medium-sized pickups for the global markets. Teams are working really well together, and we are on track. This alliance has strategic value for both companies. We are sharing costs. We are taking advantage of combined capability. We are better positioned to capitalize, as you have heard me say, on the future of mobility with an AV platform and this electric vehicle platform.
This is the commitment to our promise for a more sustainable transportation system. On behalf of Ford, we are committed to leading this era of change, to working with our Ford team, with old and new partners to create a tomorrow that is better than today, and to grant the freedom of movement to more people and more places around the world. With that, I would like to turn this over to my friend and my alliance partner, Dr. Herbert Diess.
Thank you, Jim. Thank you, Jim. Thank you very much. Good morning to everybody also from my side. I am very happy to be here in New York, as we have some great news to share. When we started our collaboration with Ford, we already announced to further expand it. During the last months, project teams on both sides worked very hard to make that happen. Now we are ready to take the next step. As Jim said, our joint investment in Argo AI will provide us with a one-of-a-kind self-driving system technology. It will enable Volkswagen and Ford to design and manufacture SDS vehicles based on this technology. From our perspective, this is a win-win situation. The collaboration brings some of the smartest people in the field of autonomous driving together.
Software and hardware experts work side by side to tackle the challenge of developing a safely deployable autonomous vehicle. All of them have unparalleled access to the vehicle manufacturing expertise of two of the world's largest automakers. In return, Volkswagen and Ford get the world's best SDS platform with the most compelling technology. In the past months, we thoroughly evaluated all options for our approach towards autonomous driving. In joining forces with Argo AI, we found the best solution for Volkswagen. We can share significant R&D costs in the high double-digit million USD area, and that's for Volkswagen alone. We will accelerate speed to market. Volkswagen will make use of the SDS platform by commercializing it in a vehicle in the early 2020s. Together, we will make the Argo AI platform a global industry standard. Ladies and gentlemen, this is the strategic logic behind joining our forces.
The transaction closing is envisaged for the first half of 2020, subject to clearance by antitrust authorities and other regulatory bodies. Then Argo AI and AID will be able to operationally function as one fully integrated enterprise. Safer, smarter, more convenient. With a digital core, the use cases for self-driving technology and their benefits are numerous across our industry and beyond. In combination with the global trend towards the electric drive, we have a powerful lever for the CO2-free mobility of the future. Now, the automotive industry can make a substantial difference. As you might know, at the current point in time, around 14% of CO2 emissions worldwide stem from the transport sector. Airplanes, ships, passenger cars, trucks. Volkswagen AG's passenger car brands alone are responsible for 1% of global CO2 emissions through the use of their vehicles.
We aim to reduce this to zero, not at least because the whole automobile industry needs to comply with strict regulation requirements worldwide. The EU Commission has set very strict CO2 limits. Fleet emissions are to decrease by a further 37.5% by 2030 compared to 2021, and we are still far away from meeting 2021's target. We will make that happen. However, the requirements entail a fundamental structural change. The electric drive will play the pivotal role in this endeavor. For the foreseeable future, it will remain the best and most efficient way of cutting CO2 in road traffic. Based on a mileage of about 200,000 km or 124,000 miles, an electric car uses around 400 Wh/km across its entire life cycle, including all the manufacturing and battery manufacturing. This means it is able to operate in a much more efficient way than other alternative drives.
The fuel cell or synthetic fuels may gain importance in the medium and long term, most likely for electrifying heavy and long-distance vehicles. However, we do not foresee greater market penetration, even in the light vehicle segment, until the middle of the next decade. Neither the fuel cell or synthetic fuels will be available at reasonable prices or at an industrial scale. This is why we are making enormous efforts to expand our already approved e-mobility transformation program, which comprises an investment volume of EUR 30 billion . Electric cars will have to make up over 40% of our sales in Europe only by 2030. It also makes sense from an economic point of view. Today, powertrain production costs are lowest for ICEs, but many experts estimate that stricter regulations on emissions will necessitate adaption of very expensive technologies.
They expect BEV and ICE powertrains to be at the same level within the next few years. We at Volkswagen embark on this new era with a massive commitment. Already in 2016, we decided to invest over EUR 7 billion to create a radically new and dedicated modular toolkit system, tailor-made for the needs of electric vehicles. Designed as an all-electric platform from the very beginning, it makes optimal use of the latest technologies in terms of custom experience, scalability, and versatility, range, and also digital services. We aim to make the MEB a new standard for our industry and thus turn the electric car from a niche product into a mass phenomenon. The MEB enables ranges in excess of 550 km or 340 miles in accordance with WLTP. Application areas for the MEB range from high volume, small city cars, and large limousines through the electrically powered camper vans.
The platform can also be used to build niche vehicles. The more cars that are manufactured using this platform, the cheaper they become and the faster the penetration of e-mobility is driven. A compelling advantage for customers, as well as states requesting more and more cleaner vehicle solutions for their respective cities and therefore for the society. At Volkswagen, we intend to produce around 15 million vehicles on the MEB over the next 10 years. Volkswagen alone is already developing and producing 27 different models on the MEB platform in the first wave, increasing to almost 70 models by 2028. The first model, the ID.3, is going to hit the European streets in 2020. Around 24,000 cars have already been pre-ordered. Ladies and gentlemen, in March, we have decided to open the MEB to partners as it is of utmost importance to scale the e-mobility as fast as possible.
Now, ladies and gentlemen, I am very proud that Ford is going to join us on this way. Jim, you are the first additional OEM to utilize the MEB platform for high volume European zero-emission vehicle production. We have agreed on supplying 600,000 MEB platform systems, including battery packs and structural parts. In addition, we are currently in discussions for an all-new supply agreement for a second vehicle already. It could almost double the supply of our MEB platform to Ford, and we hope to reach an agreement in the near future. Without any doubt, this is an important milestone for Volkswagen and potentially for every other OEM. Opening the MEB drives down production costs, creates cost-saving potentials and allows for electric vehicles at an attractive price.
This will lead to a broader global adoption of electric vehicles, and finally, to sustainable and profitable growth, whilst keeping our promise to society. At long last, the electric drive is picking up momentum. Driving electric will be our future, also it is already happening today, paving all of the way for the autonomous driving of the not too distant future. I am now handing over to AI's CEO, Bryan Salesky, who will take you on a deep dive into Argo AI's Where is he? Here. Into Argo AI's technology. Welcome, Bryan.
Thank you, Dr. Diess and Jim. Today marks a major milestone for the Argo AI team. With the addition of Volkswagen as an investor and partner, just like Ford, Argo is now officially a technology platform company. I am proud of what our team has accomplished. It has been their hard work that has really put us in this position today. You might think this deal took a little bit of time to come together. The reason is because it is a meaningful commitment to deployment with truly defined economics. Thanks to Ford and Volkswagen, Argo is well-capitalized, backed with smart money and people that really share our vision. That vision begins and ends with the customer. We are developing with a customer-first approach with safety, trust, and acceptance as our guides.
With Ford and VW, we are deploying in a more thoughtful way by ensuring that we are lifting up cities, being a problem solver, and making communities safer. We believe that Argo offers a unique value proposition in delivering on this vision. First, we are building for scale. Everybody says this, but few are actually doing it from the beginning. We have architected our software to be production quality, which facilitates speed of development. We are developing automotive-grade sensors and compute. We are tightly collaborating with our partners for a fully integrated product. Our teams work hand-in-hand with the product development teams at our OEM partners. This was one of the most important aspects of the approach that Pete and I, when we co-founded Argo, decided from the beginning. This is the right way. Even though it is hard, it is the right way to develop self-driving vehicles.
With Ford and VW's global reach and manufacturing capabilities, the scale and potential here is massive. Our multi-city testing approach, every city is different. We want our product to deliver on the needs of the community, so we need to be there to listen, learn, build relationships. These deployments will be city by city, street by street. We are now testing in five very different urban locations, Pittsburgh, Detroit, Palo Alto, Miami, D.C. We hope next year to do something in Europe. We believe our testing area really encompasses the largest geographic urban footprint of any AV developer. This facilitates our self-driving system learning much faster by gathering data from a wide range of road infrastructure, driving behaviors, traffic laws, and regulations. We are not teaching to just one specific street or a couple of routes. We are getting massive variation and testing across many cities.
The result will be a self-driving vehicle that performs more like a human. We call it naturalistic driving behavior. A self-driving vehicle needs to behave like you would expect it would in that city. City-specific driving behavior is vital for two reasons. It is the only way to navigate city streets and having the confidence to make decisions. It is really the difference between it is a balance between timidness and aggressiveness. It is key to a more comfortable and acceptable ride service for our customers. Naturalistic driving is also safer because it helps fit in with other traffic. Self-driving vehicles become an issue if they are outliers from the typical driving norm in that city. Next is the strength of our team. Our team is built around a culture of safety, a respect for the complexity and challenge ahead, and expertise based on time in the fie ld.
I'm proud that our engineering team averages 10 years of field experience building and launching products in the autonomous vehicle realm. That's on top of 70% of them having advanced degrees, masters, or PhDs. It's a very qualified team. This is what makes a difference in terms of our ability to architect a scalable system, to make rapid progress, and to grow as their experience facilitates a strong management structure for the younger talent. The bottom line is our team executes. This is only going to get stronger as we bring in the AID team, which we're very excited about. This will expand Argo with Munich becoming our European headquarters. Over 200 people will be joining us from the AID team. We're very excited to have them aboard. Finally, we're laser-focused on delivering our self-driving system for Ford and VW. We cannot lose sight of the longer term.
We are making investments for the future, and that's why we're working with leading universities to continue to train our staff and to conduct the cutting-edge advanced research that's necessary to build out a pipeline of talent. We have three faculty members on our team serving as principal scientists who are leaders in their field, two from Carnegie Mellon and one from Georgia Institute of Technology. Plus, we recently announced the formation of the Carnegie Mellon University Argo AI Center for Autonomous Vehicle Research, which is a five-year research commitment to support five faculty and their graduate student research. Another key investment is our lidar development efforts based on the acquisition of Princeton Lightwave Inc. back in 2017.
Our in-house lidar team is working on advanced sensing capabilities that will go far beyond what is on the market today and is necessary to build a safe driving system in the complex areas that we're operating in. Both of these efforts are focused on truly unlocking the potential of autonomous technology by developing the most advanced capabilities that will enable large scale and a global deployment. Thanks to Ford and Volkswagen, our technology could reach nearly every global market, could be applied across multiple brands, and to a variety of vehicle platforms. Thank you, and look forward to your questions.