Ford Motor Co.’s Argo AI autonomous vehicle unit could soon receive a major outside boost.

The Wall Street Journal reported today that Volkswagen AG plans to invest $1.7 billion in the business to lay the foundation for future collaboration.

According to the publication’s sources, the company will provide $1.1 billion in the form of working capital to support Argo AI’s development efforts. An additional $600 million will buy Volkswagen a 50 percent equity stake, effectively turning the unit into a joint venture between the German automaker and Ford.

The tipsters didn’t say what valuation Argo AI might receive following the investment. However, Bloomberg reported earlier this month that Volkswagen and Ford discussed valuing the unit at about $4 billion.

That figure may grow significantly over time. Volkswagen is reportedly considering to fold certain unspecified assets into Argo AI, which would further increase the value of the unit to the companies.

Volkswagen and Ford first indicated that they may collaborate in the self-driving car market last month, when they announced a vehicle co-development agreement. The automakers plan to bring to market a midsized pickup truck and a van geared toward corporate customers. If the Argo AI investment materializes, those vehicles might very well hit the market with self-driving capabilities.

Such partnerships are proving increasingly important for automakers in the race to develop autonomous vehicles. Traditional manufacturers are facing fierce competition from tech industry players such as Alphabet Inc.’s Waymo LLC unit, which has leaped to the front of the pack.

Ford wouldn’t be the first major automaker to accept outside capital for its autonomous driving project. Last year, Honda Motor Co. Ltd bought a $600 million stake in General Motors Co.’s GM Cruise LLC self-driving car unit. The investment came as part of a $2.75 billion partnership that will see the companies collaborate to develop a fully autonomous vehicle.

Some traditional automakers are also banding together in the mobility services market. A few days ago, BMW AG and Mercedes-Benz parent company Daimler AG committed $1.1 billion to forming a joint venture that will compete with Uber Technologies Inc. in areas such as ride-hailing.

Photo: Argo AI