Autonomous Vehicles Wolfsburg’s new sister city: Palo Alto

Volkswagen partners with tech gurus in Silicon Valley to turbo-charge its development of self-driving cars.
Sedric goes to sunny California.

Volkswagen is ready to deploy the resources of the world’s largest carmaker to turbo-charge its drive into autonomous vehicles with a linkup to Silicon Valley’s hottest mobility startup. Eager to put the damage from the Dieselgate emissions scandal behind it, VW Thursday announced a new partnership with Aurora Innovation to put self-driving cars on the road by 2021.

“We want to get into the passing lane of autonomous driving with Aurora,” Johann Jungwirth, VW’s chief digital officer, told Handelsblatt. “When we bring our autonomous vehicles into the first cities in 2021, we will be profitable from day one.”

By joining forces with the Palo Alto, California startup founded by the former autonomous vehicle gurus at Google and Tesla, Wolfsburg-based VW hopes to catch up with Alphabet’s Google, which has already test-driven millions of miles in developing its self-driving cars.

Barely a year old, Aurora was founded by former Google roboticist Chris Urmson, former Tesla roboticist Sterling Anderson, and Drew Bagnell, a professor at Carnegie Mellon University in Pittsburgh. The startup has fewer than a hundred employees but has created a lot of buzz because of the pedigrees of its founders. “We believe that our cooperation with automakers like Volkswagen helps us to go to market most quickly,” Mr. Anderson said. Aurora also announced a partnership with South Korean automaker Hyundai.

As fleet operator and mobility providers, we want to become the most important platform in Europe. Johann Jungwirth, chief digital officer, Volkswagen Group

The linkup is the latest in a series of alliances as the worlds of motor vehicles and high tech converge to revolutionize mobility. Volvo has linked up to Uber, while General Motors has taken a stake in Lyft and acquired Cruise. BMW and Fiat Chrysler are working with Intel and Mobileye.

“For me this is the reinvention of mobility and the automobile,” said Mr. Jungwirth. “As fleet operator and mobility providers, we want to become the most important platform in Europe and enter into strategic partnerships from city to city.” At the Frankfurt Auto Show in September, VW presented the latest version of Sedric, its concept Level 5 autonomous vehicle – that is, with no steering wheel in the passenger cabin. The group has also conducted successful tests with the Audi Q7 in recent months.

The carmaker envisions numerous new revenue streams from autonomous vehicles, from operating a fleet of robot taxis to selling advertising spots in the cars as they speed to their destinations. Aurora will get a share of this revenue once this becomes a reality. For now, VW will pay licensing fees to the startup. An eventual equity stake is not excluded, but for now, the Aurora founders say, they don’t need any further capital after successful fundraising efforts.

The emissions-cheating scandal that has cost VW billions in fines and reparations did give the tech gurus pause. “We thought about it for a long time,” said Mr. Urmson, who is CEO at Aurora. “But the VW management set out its plan to carry out a technology transformation and work toward the future.”

Britta Weddeling is Handelsblatt correspondent in Silicon Valley. Darrell Delamaide adapted this into English for Handelsblatt Global. To contact the author: [email protected].