Citing a report by Chinese news source Cailian, CNEvPost says that Volkswagen is in discussions with the automotive division of Huawei automotive about acquiring the project team that is developing its self-driving unit. Few details are available at this time, although further information is expected to be announced by the end of March.
According to Jiemian, a second Chinese news source, the two sides will form a joint venture. Volkswagen will provide the funding and control the company, while Huawei will provide the technology needed to become a Tier 1 supplier. “This is like Huawei selling its autonomous driving business to Volkswagen for a price that could be around RMB 10 billion ($1.6 billion),” Jiemian said, citing people familiar with the matter.
Germany’s Manager Magazine (paywall) reported last week that Volkswagen is in talks with Huawei to buy the latter’s self-driving unit, with Volkswagen promising “unconventional solutions” for the cars it manufacturers for the Chinese market. Volkswagen executives have been negotiating for months on the deal, which also involves technology systems that Volkswagen doesn’t specialize in, the report said, citing people familiar with the matter.
In October of last year, tech media outlet 36kr cited sources familiar with the matter as saying that Huawei planned to form a joint venture with Volkswagen to develop self-driving technology. Huawei would provide a number of senior technical talents to support the joint venture, with Su Jing, a former self-driving business line executive and head of the intelligent driving product department, joining, according to the report.
Subsequently, China Star Market cited industry sources who claimed Huawei’s self-driving division was in talks with other companies about a joint venture. Huawei later said that report was untrue. In January, Volkswagen China CEO Stephan Wöllenstein said his company and Huawei were indeed in discussions, but that he could not confirm the news about the formation of a joint venture between the two companies.
Every auto manufacturer in the world today is running flat out in the race to bring self-driving cars to market, whether customers want them or not. The reason is simple — there is an ocean of money to be made by selling people transportation as a service rather than automobiles. Volkswagen is not lacking in talented software engineers of its own, so it is unclear whether this joint venture will be pertinent only to vehicles made and sold in China or whether the technology will filter down to the entire Volkswagen Group. We should know more when the two companies release more details next month.