Volkswagen Partners With Horizon Robotics for Chinese Autonomous Driving
Volkswagen invests €2.4 billion in a joint venture with Chinese chipmaker Horizon Robotics to develop advanced autonomous driving systems specifically for the Chinese market.
Volkswagen accelerates its autonomous driving efforts in China by forming a major joint venture with local chip developer Horizon Robotics. The German automaker's software subsidiary, CARIAD, plans to invest approximately €2.4 billion into the partnership and holds a 60% majority stake. This deal takes advantage of China's recent relaxation of foreign ownership rules for local auto firms and aims to finalize by 2023 pending regulatory approval.
The partnership focuses on creating full-stack advanced driver assistance systems and autonomous driving solutions tailored specifically for Chinese consumers. By integrating numerous functions onto a single chip, the companies hope to increase system stability, save costs, and reduce energy consumption. This collaborative approach mirrors similar industry trends, as other Chinese electric vehicle makers like Xpeng and Nio also build internal teams to develop proprietary auto-grade chips amidst global semiconductor shortages.
This strategic move allows Volkswagen to diversify its supply chain away from American providers like Nvidia amidst escalating U.S. chip export limits on China. While Nvidia currently leads the industry in cutting-edge auto chips, having an on-the-ground partner gives Volkswagen the autonomy to create highly customized solutions for the world's largest auto market. Localized technology development ultimately grants the region the flexibility needed to expand its competitive position in the rapidly evolving electric vehicle sector.