VW to work with Mobileye on automated driving after Argo exit, report says

BERLIN -- Volkswagen Group plans to expand its cooperation with Intel's Mobileye to include its automated driving program after the automaker's decision to stop investing in self-driving startup Argo AI, two sources told Reuters.

Mobileye, which already cooperates with VW's software unit Cariad on autonomous driving technologies, is likely to be the automaker's partner for a robotaxi service that VW plans to launch by 2025.

"If you have obtained good results with one partner, it makes sense to work with them in other fields as well," said one of the sources.

VW declined to comment on whether it will use Mobileye in place of Argo AI for the autonomous ride-hailing service it plans to launch in Hamburg using its ID Buzz electric minivan.

The autonomous ride-hailing plans are continuing with the 2025 goal unchanged, a spokesperson for VW Commercial Vehicles told Automotive News Europe.

VW is in advanced negotiations with a partner that will provide the self-driving system for the ID Buzz vehicles, the spokesperson said. "We will announce that partner shortly," the spokesperson said.

The new partner is already testing ID Buzz prototypes on the road. "This is not something we just started, but we are already in the testing with this company and cooperating with them," the spokesperson said.

VW has the internal knowledge of how a self-driving system must work with the vehicle, so it can switch systems and continue the development of self-driving ID Buzz minivans, the spokesman said.

VW and Ford Motor both said on Wednesday that they were exiting from Argo AI after three years of joint efforts on the development of automated driving systems and investments of more than $3 billion.

Ford took a $2.7 billion non-cash pre-tax impairment on Argo, while VW might have to write down more than one billion euros ($1.00 billion), a source familiar with the company said.

Ride-hailing for Europe, U.S.

VW already operates Moia-branded ride-hailing vans in Hamburg that have a driver at the wheel. Prior to Wednesday's announcement, Argo AI and VW had planned to introduce a self-driving ride-pooling service in Hamburg by 2025 and eventually establish a similar service in 50 cities in Europe and North America by 2030, Carsten Intra, the head of the commercial vehicles unit, said in April.

VW Commercial Vehicles will continue to be responsible within VW Group for introducing self-driving vehicles for mobility services with the new partner.

Cariad is developing partially and highly automated driving functions for VW Group's passenger car brands, partnering with Horizon Robotics in China and Robert Bosch in the rest of the world.

VW Group also has partnership with Qualcomm for high-performance chips for automated driving.

Reuters contributed to this report