VW will form a joint venture with Horizon Robotics of China to advance autonomous driving.

The largest automaker in Europe wants to regain market share in China by advancing its ADAS and autonomous driving (AD) technologies.

On October 13, the Volkswagen Group revealed that Horizon Robotics, a Chinese unicorn that specializes in energy-efficient computing solutions for ADAS and AD features, will collaborate with Cariad, the company’s software division.

According to its announcement, Volkswagen intends to invest roughly EUR2.4 billion ($2.35 billion) in the partnership. In addition, Cariad and Horizon will form a joint venture in which the former would own 60% of the stock. In the first half of the following year, the transaction is anticipated to be finished.

According to Reuters, Volkswagen will contribute EUR 1.3 billion to the joint venture and EUR 1 billion to Horizon.
According to rumors, Cariad’s lack of development hampered the Volkswagen Group’s efforts to build intelligent vehicles and contributed to Herbert Diess’ resignation as previous CEO.

The manufacturer claimed that the collaboration with Horizon would further the integration of several tasks on a single chip, improving system stability, saving money, and lowering energy usage.

A member of Volkswagen AG’s management board for China, Ralf Brandstatter, claimed that localized ADAS and AD technology development will provide the area more autonomy to strengthen its position in the market and customize its goods and services to satisfy Chinese consumers’ expectations.

Brandstatter further said that because Cariad will actively develop the solutions with the Chinese firm, the collaboration with Horizon is deeper.

According to a statement made last month, since its founding in 2015, Horizon has supplied more than 1.5 million processors worldwide and forged alliances with more than 20 automakers. The company, which is funded by Intel, has supplied BYD, Audi, Li Auto, Continental, and many other companies, according to its website.

In China, Volkswagen already has a number of cooperative ventures. The automaker reportedly holds a 75% ownership in a joint venture with JAC Motors, according to CnEVPost. In addition, it owns 40% of Changchun’s FAW-Volkswagen and 50% of Shanghai’s SAIC Volkswagen.

Despite holding the top spot in China for years, according to supply chain sources, the German manufacturer has seen a fall in sales in the last two years. Due to limitations imposed by international automotive rules, the business found little freedom in employing different semiconductors for its automobile models. The circumstance gave domestic Chinese automakers a chance to prosper.

Due to China’s well-established software and Internet of Things (IoT) markets, consumers there are more likely to be amenable to new car electronics features than consumers in other regions.

Volkswagen lags behind its Chinese rivals NIO, XPeng, and Li Auto in terms of developing improved software and the frequency of over-the-air (OTA) upgrades. Sources claimed that the German corporation is still constrained by the attitude of a traditional automaker.

For instance, Volkswagen has only implemented the first step of OTA updates after great thought. As a result of their excessive reliance on OTA updates, Tesla and a few other automakers with Chinese roots are subject to Chinese government regulation.

Cariad’s ability to create in-car entertainment systems, AD software, and other technologies in China will be aided by the relationship with Horizon.


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