Volkswagen is reportedly in talks with Huawei about developing an autonomous driving system.
(Photo : DANIEL LEAL/AFP via Getty Images)
Volkswagen is reportedly in discussions with the automotive division of Huawei about acquiring the project team that is developing the latter's self-driving unit. According to various Chinese news sources this week, Volkswagen plans to form a joint venture with Huawei to develop the autonomous driving system.
Volkswagen will provide the necessary funds for the company and control the joint venture, while Huawei will provide the needed technology to become a Tier 1 supplier. According to people with knowledge of the matter, Huawei could be selling its autonomous driving business to Volkswagen for a price that could reach $1.6 billion (around RMB 10 billion).
The news comes after reports from Germany surfaced last week about Volkswagen having talks with Huawei to buy the latter's self-driving business, with the former promising "unconventional solutions" for the vehicles it assembles for the Chinese market. Sources said Volkswagen executives have been negotiating the deal with Huawei for months now, with the planned acquisition also involving technology systems that the German automaker does not specialize in.
Volkswagen and Huawei discussing joint venture for months now
The joint venture between Huawei and Volkswagen first came to light in October of last year. The Chinese telecommunications equipment company reportedly provided a number of its senior technical talents to support the partnership. Among those rumored to join the project was Su Jing, Huawei's head of the intelligent driving product department and a former self-driving business line executive.
Huawei denied ensuing reports that it was also in talks with other companies about forming a joint venture with its self-driving division. Volkswagen China CEO Stephan Wöllenstein finally revealed in January that discussions are indeed taking place between his company and Huawei. He provided no confirmation, though, of the talks centering around the planned joint venture between the two companies.
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Diess wants Volkswagen to be a leader in autonomous driving
Volkswagen is one of the world's biggest carmakers, shipping 8.9 million vehicles last year. To further boost its business, Volkswagen CEO Herbert Diess wants his company to play a central technology role in this era of autonomous driving.
Diess outlined his vision in an interview with Verge last month, saying, "We want to become able to really drive the car, because we think the big differentiator is, and the big step change in the industry is, are you able to take over the responsibility for driving the car? That makes a big difference."
Diess said Volkswagen has two autonomous driving projects lined up. The German firm is working with US startup Argos AI to develop urban robotaxis. The other collaboration that Diess is alluding to seems to be the project with Huawei, which involves autonomous driving in private vehicles on open roads.
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