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Volkswagen acquires 60% of the $2 billion technology joint venture with China’s Horizon Robotics

Volkswagen acquires 60% of the  billion technology joint venture with China’s Horizon Robotics

Written by Victoria Walders

BERLIN (Reuters) – Volkswagen’s Cariad software unit said on Thursday it will spend more than $2 billion and take a 60 percent stake in a new venture with Chinese technology company Horizon Robotics to tackle two major challenges: the software and the Chinese market.

The automaker will invest $1 billion in Horizon Robotics and another 1.3 billion euros ($1.26 billion) in the joint venture, with the deal to be completed in the first half of 2023.

Together, the two companies will develop technology that can integrate many functions for autonomous driving on a single chip that will only be available in China.

The project will mean that Volkswagen (ETR 🙂 has a supplier in every major region – North America, Europe and China – given its existing supply relationships with US chip maker Qualcomm (NASDAQ) and Franco-Italian STMicrolectronics.

In contrast to the partnership with Qualcomm, Volkswagen’s Cariad software unit will play an active role in developing chip technology with Horizon Robotics, and technical know-how will be shared across the Volkswagen Group, said the Chinese automaker’s president, Ralf Brandstaetter.

“This is why this collaboration with Horizon Robotics is even deeper,” he added.

Part of a broader push by Volkswagen to boost its software offerings and make its mark in the Chinese electric car market, where it lags behind domestic competitors – notably BYD – and Tesla (NASDAQ:).

According to its website, Horizon Robotics, founded in Beijing in 2015, has supplied customers including BYD, Volkswagen’s Audi, Continental, Li Auto and SAIC.

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Investors include automakers such as BYD and Great Wall Motors as well as Intel (NASDAQ:).

(1 dollar = 1.0283 euros)

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