Volkswagen Group is one of the last from its industry to still harbor ambitions in the fledgling market for autonomous ride hailing McKinsey estimates could grow by as much as half a trillion dollars over the next 10 years. 

Courtesy of Volkswagen Group

This week VW unveiled its own white label robotaxi the people of Los Angeles will be able to hail via their Uber app next year. Unlike its tech competitors, though, VW aims to be a supplier and leave the actual business of managing the fleets to others such as Uber. 

“Profit margin expectations in the mobility sector tend to be in the low single digits, in automotive they’re ideally in the high single digits,” VW Group exec Christian Senger, in charge of the effort, explained to reporters. “But in AI, they begin in the double digits. That’s the big opportunity for Volkswagen in the future.”  

This opportunity explains why VW has continued to work on autonomous ride hailing while car companies like General Motors and Ford have already given up after nearly a decade of hype and billions of dollars invested.

And now, even if there is no clear path to profitability, the technology is finally starting to become reality. 

This week alone Waymo—already commercially present in four U.S. cities—said it would soon expand into New York City using safety drivers, while Amazon-based Zoox just opened a manufacturing plant for its robotaxi. This Sunday Tesla could begin testing with a dozen vehicles in Austin. 

Courtesy of Volkswagen Group

Volkswagen wants a piece of the action, planning to deliver its first allotment of 480 robotaxis to Uber next year as part of a deal that could result in orders for 10,000 vehicles.

Comfortably transport a family of four complete with luggage to the airport

Volkswagen’s ID. Buzz AD (short for autonomous driving) unveiled this week a series production-ready version of its spacious, retro microbus EV designed specifically with the needs of a autonomous ride-hailing market in mind. 

Passengers can access the vehicles either wirelessly via their smartphone or manually by punching in an access code in a side panel. Its powered sliding door can open and close on its own so a passenger doesn’t need to turn around and shut it after exiting.

This feature also offers the added convenience of easy entry in tight spaces: a hinged door like that on Waymo’s Jaguar I-Pace vehicles could accidentally dent a nearby car when it swings open. This risk is potentially even greater with Tesla’s CyberCab robotaxi model due next year, whose futuristic butterfly doors open both upward andoutward.

Courtesy of Volkswagen Group

Once inside there’s more than enough space to comfortably fit four with a dedicated bin for small luggage up front within eyesight of all occupants. Two large suitcases can also fit in the rear of the vehicle. 

“This should be able to transport a family of four complete with luggage to the airport,” explained Senger, whose full title is CEO of Volkswagen Autonomous Mobility.

This also improves the unit economics of the vehicle—more passengers means more fares per vehicle. If the same family wanted to take the trip to the airport with a Tesla CyberCab next year, they’d need to hail two.

High-tech sensor suite manufactured at industrial scale

Unlike the Jaguars driving around for Waymo, the two-meter tall (6’4”) height of the ID. Buzz offers plenty of headroom. It also means that its roof mounted laser scanner doesn’t need to protrude conspicuously just to gain a clear enough view over traffic. VW’s sensor can therefor blend in more seamlessly with the design. 

The other eight LiDAR devices used to precisely monitor surrounding objects down to the inch are also better concealed by the choice of black exterior paint for most of the vehicle. 

Courtesy of Volkswagen Group

An additional 13 cameras and 5 radar sensors complete its sensor array, enabling the vehicle to spot objects whether they are 300 meters away, or roughly 1,000 feet, but also those immediately in front of its bumper. 

“These use many of the identical sensors found in other Volkswagen Group cars that are manufactured at industrial scale,” said Senger, explaining the very same LiDARS will be also be equipped in upcoming Audi and Porsche vehicles designed to enable eyes-off driving.

Intel’s Mobileye chips and software stack function as the brain

For its brain, VW turned for help to Intel subsidiary Mobileye, one of the largest suppliers of driver assist systems to the auto industry. Thanks to its longstanding relationship with automakers as a strategic partner to the auto industry, it agreed to work jointly with VW engineers, rather than demand—like many tech companies do—that VW accept the equivalent of a black box that steers their product. 

Secondly, the four EyeQ6 chips in the vehicle are sold in more vehicles across the auto industry than just Volkswagen’s. That means Mobileye can make use of swarm intelligence to constantly update the system’s onboard map using sensor data collected from cars already in the field.

The EyeQ6’s higher production volume also means it is less expensive than Nvidia’s dedicated automotive AI chip called DRIVE Orin, which is typically found in high-end models like the upcoming Mercedes-Benz CLA sedan. 

Courtesy of Volkswagen Group

The result, says Volkswagen, is a vehicle capable of driving up to 120 kilometers an hour (75 miles per hour) around the clock no matter the weather conditions. 

White label package — fleets just need to slap on their corporate branding

Since the zero-emission electric vehicle is a derivative of an existing model, it can be integrated into the existing production plans rather than require a dedicated factory line. 

This minimizes the financial risks should demand from fleet customers prove intermittent. The market is still very much in its infancy and regulatory barriers remain that can impede widescale adoption. 

But VW isn’t just interested in building another car: the VW robotaxi comes as part of a packaged offer. This includes the necessary backend software to manage the fleet economically, for example by sending commands to instantly reroute vehicles in the event a particular street may be closed off to traffic. 

For those customers that don’t already have an app, it will also supply a white label digital customer booking platform which also doubles as a means of communicating with the vehicle since no driver will be around to call if there are any problems. 

Once licensed, VW Group would also train a fleet manager’s staff to man the command central. All these companies effectively have to do is just add their own unique branding to all the customer-facing touch points, and presto, they’re ready to start taking on fares.