Audi A8: The World's First Level 3 Autonomous Vehicle

This case, set in May 2019, details the launch strategy of the German automobile company AUDI AG (Audi) for its model A8 sedan, the world’s first Level 3 Society of Automotive Engineers (SAE) conditional automated vehicle. A Level 3 vehicle uses technology and artificial intelligence (AI) algorithms derived from advanced programming to control itself under specific conditions, enabling the human driver to take their eyes off the road and their hands off the steering wheel. Given the fast-paced nature of technology development and the emerging status of the autonomous vehicle industry, this case provides several class discussion points, including first-mover advantage and influencing technological standards in an emerging industry, the ethical implications of technology development and the programming of autonomous vehicles to make decisions, and the role of government regulations and customers in autonomous vehicle programming. Further discussions could address the development of smart cities and related technology, the data privacy issues of autonomous vehicles, the decisions of an established company to develop a risky technology, and future international market entries with these vehicles.

This case can be used in strategy, business ethics, or innovation courses at the upper-level undergraduate or graduate level. After working through the case and assignment questions, students will be able to<ul><li>understand first-mover advantages, competition in an emerging and disruptive industry, and the speed and emergence of technology development;</li><li>address the ethical decisions that companies can encounter regarding technology development and the role of stakeholders, such as customers and regulators, in shaping these decisions; and</li><li>consider how a company in an established industry may be willing to develop and promote a new product that is in line with current technology trends but also has the potential to cannibalize its core business.</li></ul>

• Ethics
• Artificial intelligence
• Technology standards
• First mover
• Regulation
• Data privacy
• International market entry
• Smart cities