Volkswagen to launch self-driving vehicles in Texas by 2026

By Hyunjoo Jin

SAN FRANCISCO (Reuters) – Volkswagen (ETR:) said on Thursday that it plans to launch autonomous, or self-driving, vehicles for ride hailing and goods delivery services in Austin, Texas by 2026.

The German automaker, which had previously made a costly bet on Ford’s now closed self-driving car unit, Argo, has been partnering with supplier Mobileye, in a strategic shift.

This year, Volkswagen plans to test 10 ID Buzz electric vehicles retrofitted with Mobileye’s autonomous driving platform with safety drivers on board in limited areas of Austin, including downtown.

The company took over nearly 100 people from Argo, as well as its hub in Austin where Argo was testing autonomous vehicles.

Volkswagen said it will be able to leverage Mobileye’s supply base and map data to achieve economies of scale and bring down costs.

“The big aim is that we bring fully autonomous vehicles to the market as a commercial, scalable product,” said Christian Senger, a Volkswagen board member who oversees development of autonomous driving.

Volkswagen joins GM’s Cruise and Alphabet (NASDAQ:)’s Waymo in testing autonomous vehicles in Austin, Texas, known for the least restrictive regulations on self-driving cars.

“We’re currently actively evaluating different opportunities for different cities,” said Katrin Lohmann, president, Volkswagen ADMT.

Companies have poured billions of dollars into developing the technology they say will increase road safety. But Tesla (NASDAQ:), Cruise and Waymo and other firms have missed their targets to launch self-driving cars and their vehicles have had difficulty in handling rare and unforeseen driving situations.