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Ford Motor Co. and autonomous-driving software company Argo AI are nearing agreements with Volkswagen AG to partner on electric and self-driving vehicles that would bind two of the world’s largest automakers in a transatlantic alliance.

The Detroit News reported that the proposed alliance would also tie VW to Argo as the Pittsburgh-based start-up company’s second investor and the second company to use its software to deploy self-driving vehicles. Argo would be able to test and launch in Europe through VW.

If approved by Ford’s board this week and Volkswagen’s board Thursday (July 12), the companies are expected to officially announce the new partnership details Friday. The deal could create one of the largest and most robust alliances on electric and autonomous vehicles as Ford and Volkswagen sold roughly a combined 17 million vehicles globally last year, around 21% of the market.

“Both companies get scale, both get savings,” said Sam Abuelsamid, an automotive technology analyst for Navigant Research, adding that the partnership indicated VW saw progress in Argo that it likely didn’t see in other companies. “If you can start to combine some of that cost and share some of that technology, you can get more volume out of fewer platforms. You have the potential to save an enormous amount of money in development costs.”

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