Audi makes $16bn bid for luxury autonomous vehicle market

Audi says it will invest $16 billion by 2023 into electric mobility, autonomous driving and digital services.
6 December 2018

An Audi A8 car is presented at the Frankfurt Motor Show, 2017. Source: AFP

German carmaker Audi says it will invest €14 billion ($16 billion) by 2023 into future transportation technologies that will cover electric mobility, autonomous vehicles (AV) and digital services.

That injection forms a large chunk of the projected €40 billion ($45.6 billion) in expenditure plotted for the five-year period and will provide the backing for the necessary purchases of property, factories, and equipment, as well as investments into research and development. Bram Schot, temporary chairman of Audi’s Board of Management, says that the company is taking a “systematic approach to electric mobility” and will be prioritizing its resources for “future-oriented products and services”.

By 2025, Audi expects to have 20 electrified models— at least ten will feature all-electric drive— while the next step revolves around artificial intelligence (AI), with fully-networked cars able to synchronize and share data to make prognoses of driving conditions and risks, providing the ability to “look roughly 10 seconds into the future”.

Only one model in the Audi stable, the A8, currently has automated driving at level three, or ‘conditional automation’, whereby the vehicle can manage safety-critical functions. However, the company is now gunning for level five, or ‘full automation’, where the vehicle assumes complete longitudinal and lateral control, including automatic steering, braking, and accelerating.

In announcing the investment, the VW Group-owned carmaker puts the pressure on rival BMW to be the first to offer self-driving cars for the luxury market, which could be the choice for businesses— such as taxi and private hire companies— looking to offer premium services with a touch of heritage when automated vehicles become established.

However, at this stage at least, it may be that there is no such rivalry; BMW has been open about its willingness to collaborate with rivals on self-driving initiatives given the enormous expense of research and development.

Beginning its coalition with Intel subsidiary Mobileye in 2016, and soon to add mobility tech specialist Magna International, BMW has sought to help automakers “industrialize and customize” AV systems by introducing a “flexible and autonomous vehicle platform” that can be used by multiple automakers the world over.

As Europe and the US push forward cautiously and steadily with AV technology, BMW’s head of development, Klaus Froehlich, warns that China could become a world leader first, with lawmakers in the West less agile towards regulating the fledgling industry. “China has good companies, software, hardware and are expanding to very powerful chipsets, and there’s a political will,” said Froehlich.