The two companies are forming a joint venture with Israeli car importer Champion Motors, under which Volkswagen will provide the electric vehicles and Mobileye its autonomous driving technology, the companies said in a statement on Monday.
The service, called “Mobility-as-a-Service”, is expected to be commercialized by 2022, with Champion Motors running the fleet operations and control centre.
The Israeli government, which has accepted the proposal, will also support it by sharing required infrastructure and traffic data, the companies said.
Automakers are teaming up with tech companies to gain a head start in driverless technology, which is expected to upend the transportation industry.
Honda Motor Co Ltd (7267.T) announced an investment of $2.75 billion (2.14 billion pounds) in General Motors Co’s (GM.N) Cruise self-driving vehicle unit, to jointly develop autonomous vehicles for deployment in ride services fleets around the world.
Reporting by Arunima Banerjee in Bengaluru; Editing by Anil D'Silva