According to the "Manager Magazine" reported on February 17, Germany's Volkswagen is negotiating with China's Huawei to acquire the autonomous driving department. Huawei's talks with Volkswagen have been going on for months, and the deal could be worth billions of euros, the sources said. If so, the final transaction price will easily exceed 10 billion yuan. Volkswagen previously unveiled plans to invest nearly $100 billion in autonomous driving, aiming to lead what many believe to be the future of mobility at an early date.
The Manager Magazine quoted insiders as saying that Volkswagen group leaders have been negotiating the deal for months, which also involves a technical system that Volkswagen is not yet proficient in. A Volkswagen spokesman declined to comment. Huawei has not responded to this at this time.
So far, Chinese giant Huawei Technologies' activities in the automotive market have been limited to cooperation with partners. For example, Huawei is working with Seres to develop hybrid vehicles with a proprietary operating system, HarmonyOS. Meanwhile, by the middle of this century, Huawei is expected to develop top-of-the-line autonomous driving systems. Huawei has always been a representative of top technology in Volkswagen's most important Chinese market, and if Volkswagen acquires Huawei, it will help reshape its leading brand image in the Chinese market.
Smart driving is considered to be at the heart of future competition in the automotive industry. Volkswagen CEO Herbert Diess said in a Q&A session on the U.S. social media platform Reddit on Feb. 16 that he expects the auto industry to popularize autonomous driving technology within 25 years, and the company is looking to forge new partnerships to improve self-sufficiency in the software space. This "further cooperation" was immediately revealed to be that Huawei was discussing the possibility of a deeper transaction.
According to previous plans, the Volkswagen Group aims to increase the proportion of self-developed software in the group's production of cars from 60% by 2025 (this figure is less than 10% in 2020). Software has always been one of volkswagen's weaknesses. Especially when ID.3 was launched, this problem was vividly displayed. Not only has the release of the car been postponed many times due to software problems, but the ID.3 that first came off the production line is even a "bare metal" car without a system.
But Volkswagen is also rapidly strengthening its capabilities in software. Subsequently, Volkswagen formed a large software team. At the end of 2020, Volkswagen said in a new statement that investment in electric vehicles, autonomous driving and related future technologies will increase to about $86 billion, half of the company's 150 billion euro budget by 2025. At the same time, Volkswagen Group will double its future digital investment budget to about $32 billion to develop core software such as automotive operating systems.
China's huge auto market, as well as the rapid development of new energy, autonomous driving, intelligent cockpits, as well as fierce competition, requires advanced intelligent capabilities to achieve software self-sufficiency. At present, Huawei's external claim is to do the tire 1 or Tier2 of the automotive industry, providing OEMs with intelligent cockpit, automatic driving, electric drive system and other technologies, and the current cooperation partners include Pole Fox, which cooperates with BAIC to carry Huawei's autopilot family barrel, the Q&I M5 with HarmonyOS intelligent cockpit developed with Xilis, and models cooperating with GAC and Changan are also under development. In addition, according to media reports, the Audi brand under the Volkswagen Group is cooperating with Huawei to equip its A6 and other models with Huawei's ADS high-end automatic driving system. The system is a set of urban peer-to-peer L2 systems. At present, the Audi A6 model with the Huawei ADS logo can be seen near Huawei's Shanghai R&D center.
Some analysts pointed out that if Huawei sells the core self-driving assets, it means that Huawei will get rid of the embarrassment of how to obtain customers. Huawei is currently working hard to sell its autopilot package solutions to car companies, but autopilot has always been regarded as the "soul" of car companies and is more willing to develop it itself, so Huawei is also facing the problem of new customer development. After the sale of this asset, Huawei can focus more on its parts and components, or directly enter the "car-making" stage. Thus no longer swaying in road selection.
At the beginning of this year, Huawei just set a small target of 300,000 vehicles sales. In addition, for Huawei, the mobile phone business has suffered heavy losses due to US sanctions, and only the Mate, P, and Nova brands are retained on its hands, and the others have broken their wrists to survive. As an important development direction of smart cars in the next few years, companies have entered the industry to share a piece, is Huawei really willing to sell at this moment? The relevant news is subject to further confirmation by the official, and the electric knower will continue to pay attention.