Volkswagen added that mobility solutions for people and goods in urban areas will be the first application case for the SDS from VWAT GmbH.

In July, the Volkswagen Group announced closer cooperation in the field of autonomous driving with Ford which, subject to official approvals, includes a stake in ARGO AI, a company specialized in the software development for autonomous driving. According to Volkswagen, ARGO AI and VWAT will work closely together on the realization of the SDS. In the development of the SDS, VWAT will focus on systems engineering and industrialization, aiming to establish an SDS as "a standard module" for all Volkswagen Group brands in the future.

"We want to establish Volkswagen Autonomy as a global technology company where we bundle expertise from the automotive and technology industries, combining the agility and creativity of a high-performance culture with process orientation and scalability," said Mr. Hitzinger. "We will continue to use synergies across all group brands to reduce the cost of self-driving vehicles, high-performance computers, and sensors. We plan to start commercializing autonomous driving at a large scale around the middle of the next decade."

Volkswagen said that it planned the first application cases for the commercial sector. Volkswagen Commercial Vehicles as the leading brand for autonomous driving, MaaS, and TaaS in the group will develop and build special purpose vehicles ("SPV") such as robo taxis and robo vans. In a co-creation approach together with VWCV as a customer, VWAT will develop the respective systems. This will make the brand for light commercial vehicles the first user of the SDS from Volkswagen Autonomy.

According to Volkswagen, by the end of the year resources from Volkswagen Group research allocated to autonomous driving will be transferred to VWAT GmbH. In 2020 and 2021 two further companies will be founded in Silicon Valley and in China respectively in addition to the company in Germany. More than half of the staff will be employed in Munich and Wolfsburg. Munich was chosen as a further site in Germany as the group's Autonomous Intelligent Driving GmbH ("AID") already is headquartered there. At the same time, the site will become the European headquarters of ARGO AI. Silicon Valley was selected as a further site due to its proximity to ARGO AI and to the world's leading talent pool for autonomous driving. An SDS development site in China is needed to comply with local legal requirements. China has a particularly important role as the largest market of the Volkswagen Group and due to the high traffic complexity.

"Autonomous driving presents the entire industry with major challenges: high development costs, extremely high demands on sensor technology, plus a lack of regulatory systems and heterogeneous regional standards," said Mr. Hitzinger. "Our goal is to build an agile, high-performance development team with the know-how to realize a self-driving system ready to market."

Volkswagen said that, in addition to operational work on the development, verification, and validation of the systems, VWAT will control and be responsible for all activities related to autonomous driving from Level 4 within the Volkswagen Group.

Volkswagen pointed out that self-driving systems must be "extremely robust" to reduce accidents, and it acknowledged that that would be "difficult to achieve" and that "verification is also a huge challenge."