Austin, TX
Volkswagen (VWAGY) Fuels Autonomous Drive With Austin Test Run
Volkswagen (VWAGY – Free Report) announced that it would commence testing autonomous electric vehicles in Austin, TX. Following the decision to wind down its investment in Argo AI — once a leader in self-driving tech, which was dissolved in 2022 due to mounting costs and strategic disagreements between its main investors Volkswagen and Ford (F – Free Report) — VWAGY has been actively revamping its self-driving strategy.
In collaboration with technology firm Mobileye (MBLY – Free Report) , Volkswagen has developed autonomous driving capabilities for its ID Buzz electric vans. The Germany-based auto giant plans to deploy about 10 of its ID Buzz electric vans, fitted with autonomous driving systems developed in association with MBLY, by the end of 2023. The first pair of these vans, equipped with lidar, radar and camera systems, are already on U.S. soil, with testing set to begin before the end of July. Initial tests will have human safety drivers onboard.
The selection of Austin as the initial U.S. hub for the program underlines the city’s progressive attitude toward innovation and its conducive environment for autonomous vehicle testing. According to Katrin Lohmann, the executive leading Volkswagen’s self-driving initiatives in the United States, the company anticipates expanding its Austin fleet and commencing testing operations in at least four more U.S. cities over the next three years. This expansion strategy highlights Volkswagen’s commitment to establishing a strong presence in the autonomous driving market and underlines its intention to compete with industry leaders in developing safe and reliable self-driving technology.
This development is part of Volkswagen’s recent strategic shifts to bolster its self-driving vision, including a strengthened partnership with Mobileye and fresh investments in MOIA, its European ride-sharing arm. Though the firm is aiming to launch a robotaxi service in Europe, it currently doesn’t intend to initiate its ride-sharing platform in the United States. Instead, the company plans to market autonomous ID Buzz vans and fleet management capabilities to other businesses offering ride-sharing or delivery services.
The move to cease investment in Argo AI saw Volkswagen and Ford diverting resources to their independent pursuits of self-driving technology. Ford, in March, unveiled a new subsidiary, Latitude AI, to enhance its BlueCruise hands-free highway driving system. The unit absorbed around 550 employees from the now-defunct Argo AI. Volkswagen, on its part, has also incorporated former Argo AI employees into its U.S. self-driving efforts.
The self-driving landscape is becoming increasingly competitive and Volkswagen’s shift in strategy could help it navigate the ongoing transition in the auto industry.
As Volkswagen embarks on this new chapter in autonomous driving, the industry will keenly watch how it utilizes its previous investments and partnerships to accelerate its ambitious self-driving goals. This could potentially alter the dynamics of both the electric vehicle and the autonomous vehicle markets. While autonomous vehicle technology has been a costly endeavor for many automakers, Volkswagen’s strategic pivot may very well provide it with a competitive advantage in this race.
Volkswagen currently carries a Zacks Rank #2 (Buy). Another top-ranked player in the auto space is Honda (HMC – Free Report) , sporting a Zacks Rank #1 (Strong Buy).
The Zacks Consensus Estimate for HMC’s current fiscal year sales and EPS estimates implies year-over-year growth of 16.5% and 30.7%, respectively. The fiscal 2024 EPS has been revised upward by 13 cents in the past 30 days. The fiscal 2025 EPS estimate is pegged at $4.16 per share, suggesting year-over-year growth of 5.1%. The stock has gained around 32% year to date.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.