Volkswagen’s new autonomous subsidiary
VW’s new autonomous entity plans to deploy a Level-4 vehicle based on the I.D. Buzz all-electric van (above) by 2022, and introduce it in a pilot project in Qatar for the World Cup. (VW)

CES 2020: VW creates new autonomous subsidiary

The new VW self-driving entity will target Level-4 vehicles for commercial deployment in four years and manage its own recruiting, IT and purchasing.

Volkswagen announced on Jan. 8 the formation of a new subsidiary called Volkswagen Autonomy, Inc. The new unit will oversee the development of Level-4 autonomous systems for VW. Alexander Hitzinger, chief executive of Volkswagen Autonomy, was on-site at CES 2020 in Las Vegas when the announcement was made. The core responsibility for VW Autonomy will be systems integration.

“This is a circular, systems-engineering optimization effort that needs to be combined with the overall vehicle. It’s extremely complex,” Hitzinger said, characterizing the complexity of autonomy as “the mother of all systems-engineering problems.” According to Hitzinger, the consequences of investing in the wrong architecture could result in a delay of several years.

The new entity’s plan is to deploy a Level-4 vehicle based on the I.D. Buzz all-electric van by 2022, introduced in a pilot project in Qatar for the World Cup. As early as 2024, an upgraded self-driving vehicle would be ready for a commercial application. “This would be the first product,” Hitzinger said, noting it would operate in a well-defined operational design domain (ODD), likely for a commercial application such as cargo delivery, long-haul trucking or other use cases with high utilization. The ODD would then be slowly expanded over time. 

Hitzinger said that he believes Volkswagen’s L4 vehicles will be sold to individuals as well as fleets for shared services, suggesting that even 30 years from now, there will be more privately-owned cars than vehicles used in shared mobility services. “Personal ownership will not go away,” he said.

Global oversight for autonomy
VW Autonomy was incorporated at Volkswagen’s Innovation and Engineering Center in Silicon Valley, but it will be a global organization. The chief operations officer, and one of two chief technology officers (CTO) will be based in Munich. A second CTO will be based at the Silicon Valley facility in Belmont, California. There will also be an office in Wolfsburg, Germany, and operations will later be added in Beijing.

“The teams will be distributed so I can hire wherever I find the best people,” Hitzinger said, adding that he wants the company to have the spirit of a start-up. “The idea is to create a Formula-One-style company,” he said, “but backed by the biggest car company in the world.” Hitzinger previously served as technical director of the Porsche LMP1 racing project.

Driving down cost
As the new entity launches low-volume pilot projects, it will work to drive down the cost of sensors and compute capability. Hitzinger mentioned the promise of lower-cost lidar using frequency-modulated continuous wave (FMCW) technology. At CES, Hitzinger met with numerous AV tech companies – software producers, sensor providers, simulation companies – promising lower-cost compute solutions.

Hitzinger explained the cost of the current generation of AV prototype vehicles is $100,000 and higher. “But by about 2025, we will be at the stage where the cost will be low enough to start reasonably scaling,” he said. Hitzinger and his foundational team of about 40 employees are already making critical decisions about strategic partnerships. For full-stack autonomous-vehicle development, VW Autonomy recently discontinued its relationship with Aurora and will now work with Argo AI.

“We will work together with Argo on the algorithms for software development. VW Autonomy then does the hardware development, industrialization, verification, validation and certification of the full system,” Hitzinger said. “It’s a very complex system, and the OEM is responsible for the safety of that system. And that’s why you really need that competence in-house.”

Ongoing investments
In 2017, Ford committed to investing $1 billion in Argo. That was followed by Volkswagen investing $2.6 billion in Argo in July 2019. Hitzinger said VW Autonomy chose Argo for its “strong engineering team” and due to the Volkswagen Group’s stable relationship with Ford. The two automotive companies will now share costs and risks in developing L4 vehicles.

In a December 2019 partnership, the VW Group (via an investment from Porsche Automobili Holding SE) selected Aeva as a critical provider of lidar sensors. “We’ve done a lot of due diligence in the lidar company space, and I believe they are the best of the bunch,” Hitzinger said in Las Vegas.

While VW Autonomy Inc. will take responsibility for Level-4 autonomy, the VW Group’s Car.Software Group, formed in June 2019, will continue to develop the software architecture for Volkswagen’s ADAS, body control and infotainment applications – but not above autonomy Level 3. Meanwhile, the Volkswagen Group’s Munich-based Autonomous Intelligent Driving unit, which was working as a robotics specialist for Audi, will be absorbed into Argo.

A scalable approach
Hitzinger said the costs of vehicle automation and autonomy will be brought down by using architectures that are shared between future L4 vehicles and shorter-term Level-2 and Level-3 systems. “Because you have it all on the same platform, you straightaway get economies of scale,” Hitzinger said. “So the cost of L4 vehicles will drop because you have higher volume through the L2 and L3 vehicles. It’s a truly scalable platform approach.”

VW Autonomy is a wholly owned subsidiary of Volkswagen with the ability to establish its own IT, compensation scheme and purchasing processes. Attracting new talent now becomes a major focus as the company expands to about 200 employees. “I’m recruiting heavily right now,” Hitzinger said.

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