Volkswagen (VW) has launched an autonomous vehicle (AV) test program in Austin, Texas, using a fleet of ten electric ID Buzz vehicles equipped with its partner Mobileye's self-driving technology.

Initially, VW will test the technology in Austin with a couple of vehicles, expanding to all ten by the end of the year. The company intends to expand to four more cities in the US within the next three years, with plans to launch commercial operations in Austin by 2026.

The vehicles are equipped with cameras, LiDAR, radar, and self-driving software, and will initially be used to collect data. They will be accompanied by a human safety driver during the testing phase to take control of if needed.

The company has created a subsidiary called Volkswagen ADMT (autonomous driving, mobility, and transport) for the purpose and plans to employ former engineers from the now-defunct autonomous vehicle startup, Argo AI. The company intends to base ADMT’s teams in Belmont, California, and Austin. Its business model would involve providing the self-driving ID Buzz vans and fleet management software to third-party companies for delivery or ride-hailing purposes.

Analyst QuickTake: Texas has always been a popular destination for autonomous vehicle companies given its location, availability of academic and research institutions, and the Texan government’s encouragement. In fact, AV companies such as General Motors’ Cruise and Alphabet-owned Waymo already have a presence in Austin, and VW will now add to the competition.