Volkswagen will invest 2.6 billion U.S. dollars into a Pittsburgh autonomous vehicle company that's mostly owned by Ford as the automakers who were once rivals deepen their partnership to develop driverless and electric vehicles in an ultra-competitive landscape.

The two automakers will become equal owners of Argo AI, and they plan to put autonomous vehicles on the roads in the U.S. and Europe as early as 2021, the companies said Friday. 

The deal also includes a plan for Ford to use VW's electric vehicle platform to build zero-emission cars for the European market starting in 2023. 

Auto companies have been teaming up with each other as well as with big technology firms over the past few years to try to spread out the enormous costs of developing self-driving and electric vehicles. Ford CEO Jim Hackett expects the large crowd of players to be narrowed down.

"The stakes are high here,” Hackett said at a news conference Friday. “There’s only going to be a few winners who create the leading platforms for the future. We cannot be late, Ford can’t be late, and we have to be great."

The decision to team up helps Ford and Volkswagen share the steep costs – and risks – of developing technology for driverless vehicles, and gives Argo AI more cash to attract talented engineers, crucial to success.

It also will help the automakers pivot from cars that compete on engine performance to those where the unique characteristics of the driver experience will be driven by software.

What it comes down to for both the auto and technology companies is time and money. Driverless cars may not become commercially viable or generate revenue for years. There are also enormous up-front costs to change plants to produce electric vehicles. 

Auto and tech industry experts say partnerships like Ford and VW will become more common. 

"One company cannot bankroll the development alone," said Akshay Anand, executive analyst for Kelley Blue Book. "Partnerships will continue to ramp up in coming years, crossing boundaries most would not have envisioned even 10 years ago."

The Ford-VW alliance vaults Argo into one of the highest-valued autonomous vehicle development companies in the world.

The VW investment includes one billion U.S. dollars in cash and the 1.6 billion U.S. dollars' value of VW’s 200-person autonomous intelligent driving company. Ford already has committed to putting one billion U.S. dollars into Argo, which the companies now value at seven billion U.S. dollars.

The two companies announced plans in January to collaborate on developing commercial vans and medium-sized pickup trucks while exploring electric and autonomous vehicles together. They said Ford would develop larger vans and pickups while Volkswagen would develop a smaller van for crowded cities.

Shares of Ford rose by 2.6 percent in afternoon trading Friday.