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Audi kicks the race for self-driving cars into a higher gear

Auto companies are racing to develop self-driving cars and Audi of America President Scott Keogh believes his company is in first place.

Audi has created a self-driving car named Jack, which is equipped with 20 sensors that enable it to navigate on freeways and through traffic.

The car notifies users when it is ready for automated mode through LED lights on the dash board and steering wheel, a message on the instrument cluster and an audio annunciation. Once the car tells its driver that it is available for self-driving, the user must press two autopilot buttons simultaneously to engage the system.

"Jack is programmed to work on freeways in automated mode," Audi Senior Engineer Kaushik Raghu said on CNBC's Power Lunch."It doesn't have all the antennas and the cables, and sensors sticking out. It just looks like a car that you can go buy at the dealership today."

Jack is not Audi's first attempt at an autonomous car. The company has been developing self-driving technology for more than a decade,and the Audi TTS climbed Pikes Peak without a driver in 2010.

Keogh noted that Audi is set to launch another self-driving car in 2018, which will "handle 60 to 70 percent of normal driving needs." The A8 will be a Level 3 autonomous car compared to Jack, which is a Level 2.

"When you think about it, the issue is not driving around your driveway or driving around your neighborhood, it's when you're stuck in tedious traffic that's where this is going to come to life," Keogh said on CNBC's Power Lunch.

Companies like Nissan and Tesla have also ventured into autonomous car making with Nissan debuting its ProPilot in Japan and Tesla releasing the Model X.

Autonomous driving has sparked some criticism, though,after it was involved in a fatal Tesla crash in May.

CLARIFICATION: Audi has been developing self-driving technology for more than a decade. That fact was unclear in an earlier versionof this article.