Volkswagen and Ford have said they will work together on developing self-driving and electric cars in an attempt to reduce costs on new technologies.
VW plans to invest $2.6bn (£2.1bn) in Ford’s self-driving unit, which is valued at $7bn.
The move comes after the duo said in March they would build vans together.
The two firms said whilst they remained “fiercely competitive” in the car market, the tie-up would give them “significant global scale” in new tech.
The agreement is the latest example of once fierce industry rivals joining up to develop new technologies.
In February, BMW and Daimler unveiled a joint venture covering new-generation services such as driverless vehicles, ride-hailing, and pay-per-use cars.
While late last year, Honda invested $2.75bn (£2.1bn) in rival General Motors’ driverless unit with a view