Volkswagen will start testing self-driving cars in Austin as it moves on from Argo AI

Volkswagen said Thursday that it will begin testing self-driving electric vehicles in Austin, Texas, later this month.

The German auto giant said it will deploy about 10 of its ID Buzz electric vans equipped with autonomous driving systems developed with Mobileye by the end of 2023. The first two of those vans are already in the U.S. and will begin testing before the end of July, it said.

The self-driving ID Buzz vans are equipped with lidar, radar and camera systems. The vehicles are “geofenced,” meaning they will operate only in specific areas of the city that have been carefully mapped, Volkswagen said.

For now, all of its self-driving vehicles will have human safety drivers on board while testing.

“We selected Austin as the first U.S. hub, as the city has a track record for embracing innovation and offers a conducive climate for the testing of autonomous vehicles,” said Katrin Lohmann, the executive leading Volkswagen’s self-driving efforts in the U.S.

Lohmann said that the company expects to expand its Austin fleet and add testing operations in at least four more U.S. cities over the next three years.

The move is the latest in a series of steps the auto giant has taken to revamp its self-driving strategy in recent months, including a deeper partnership with Mobileye and new investments in MOIA, its Europe-based ride-sharing service.

While the company has been working toward a robotaxi service in Europe, it isn’t planning a ride-sharing service of its own in the U.S. as of now. Instead, it plans to offer autonomous ID Buzz vans and fleet management capabilities to other businesses offering ride-sharing or delivery services.

Along with Ford Motor, Volkswagen was an investor in the now-defunct Pittsburgh-based self-driving startup Argo AI. For a while, Argo was considered a leader in the race to develop fully autonomous vehicles – but Ford and Volkswagen decided to wind down the company in October of 2022, citing spiraling costs and differences around strategy.

Ford in March launched a new subsidiary, called Latitude AI, to expand on its BlueCruise hands-free highway driving system. That unit includes about 550 employees who previously worked for Argo AI.

Volkswagen has also hired some of Argo AI’s former employees for its U.S. self-driving effort, it said.