Yesterday evening, the German media "manager magazin" reported that German Volkswagen intends to acquire Huawei's autonomous driving department for billions of euros, including technologies that Volkswagen is not yet familiar with, and Volkswagen is currently negotiating with Huawei on this matter. A public spokesman declined to comment. Jiwei Network asked Huawei for verification on this matter, and has not received a specific response as of press time.
However, regardless of whether the news is true or not, combined with Volkswagen's "2030 NEW AUTO" strategy, intelligence, as a weak link for traditional car companies, is becoming the key to the next stage of intelligent electric vehicle competition.
The intelligent short board of traditional car companies
Vigorously developing automotive intelligent software technology has become the top priority of Volkswagen Group's future development, and can also be seen as a microcosm of the weak links shown by traditional car companies in this wave of automobile revolution.
Last year, UBS released a car dismantling report for the Volkswagen ID.3. As the first electric vehicle built on the MEB platform of Volkswagen Group, ID.3 represents a heavy blow from traditional car companies in the competition of electric vehicles, but from the dismantling results, the software capabilities of ID.3 still have a significant gap with Tesla.
In response to questions from the media including Jiwei Network, UBS China's head of the automotive industry, Martin Min, said that from the perspective of the overall three-electric system, Volkswagen's ID.3 still maintains a high level. But in terms of pre-control, autonomous driving, and comprehensive learning capabilities, Volkswagen does not have the ability to continuously update the software like Tesla.
Whether it's in terms of the development of electric vehicles or in terms of profit margins, software is at the core.
Martin min pointed out that the contribution of the marginal profit margin of software is 100%, because the marginal cost of software is zero, and this part of the revenue will follow the stock of the car, not the sales of new cars. With the sale of more and more cars, the probability of stock is gradually increasing, so this will become an important factor in whether a car company can continue to earn profit margins in a new competitive environment after 5-10 years.
Sony Group's strategy of cutting into the electric vehicle track also explains the importance of software for electric vehicles to some extent.
According to public information, Sony's electric vehicle plans began with a conversation between Sony's executive vice president and CFO Hiroki Totoki and executive vice president Izumi Kawanishi in 2017. They believe the software will control the car, which gives Sony the chance to be a winner. The Kawanishi development team's biggest project at the time was to reinvigorate Aibo, a robotic dog that combines artificial intelligence and robotics. The core technology is not hardware but software, and the electric vehicle business is an extension of the software.
Kawanishi once told Nikkei that his view was simple, that for established manufacturers and new entrants, software will determine the success or failure of the business, not the hardware.
The underlying logic of car companies is being reshaped
Compared with the electrified supply chain, smart technology suppliers are strangers to the automotive industry, and mainstream technology companies are concentrated in North America and China. Peter Mertens, a former head of R&D at Audi, revealed in 2020 that none of the tens of millions of codes in Volkswagen ID.3 came from Volkswagen's own engineers.
Until July last year, Volkswagen officially announced that it would carry out the first OTA upgrade of the ID. family model. Compared with Tesla, the "forerunner" of OTA, and a number of new car-making forces, Volkswagen's OTA came very late. However, for traditional car companies, it has taken a big step.
It is also from 2020 that the public is "enlightened".
In November 2020, the Volkswagen Group announced that it will invest 73 billion euros in electrification, hybrid systems and digitalization over the next 5 years, in accordance with the decision in the 69th round of planning, half of Volkswagen's investment budget of 150 billion euros up to 2025. Of this, 35 billion euros were invested in electrification, 27 billion euros in digitalization, double the previous one, and the remaining 11 billion euros were invested in the development of hybrid vehicles.
Herbert Diess, CEO of Volkswagen Group, said in a statement: "In the coming years, it is also crucial to take the lead in automotive software in order to meet people's future demand for personalized, sustainable and fully connected cars. To that end, we've doubled our spending on digitalization. ”
The €27 billion investment plan includes Car.Software, Volkswagen's software division launched earlier in 2020, which has now become the Volkswagen Group's automotive software company called CARIAD (Car. I am Digital), run by Dirk Hilgenberg.
In the middle of last year, Volkswagen announced the "2030 NEW AUTO" strategy, which further clarified the above investment plan. The initial plan is to invest 73 billion euros in the development of future automotive technologies from 2021 to 2025, including automotive digitalization, autonomous driving, standard batteries, SSP platforms, etc.
Volkswagen aims to provide 60 percent of Volkswagen's software by 2025, compared with just 10 percent of its software division.
In addition to the internal boldness, Volkswagen is also looking for external cooperation.
In January, CARIAD and Bosch said in a joint statement that they were collaborating on the development of autonomous driving software for Volkswagen. The two companies expect to begin installing Level 2 autonomous driving software in Volkswagen in 2023.
The cooperation with Huawei was rumored last year, saying that Volkswagen planned to establish a joint venture with Huawei to establish an autonomous driving technology company, and Huawei refuted the rumors as soon as the news came out, while Volkswagen has been silent. Until January this year, Volkswagen China CEO Feng Sihan responded for the first time in an interview with the media that Volkswagen and Huawei were indeed discussing, but there was no confirmable news at this stage, including the establishment of a joint venture between the two sides.
For Volkswagen, China is the most important and largest single market, with 345,000 units sold in China in January, accounting for 49% of global sales. If you want to continue to gain a foothold in the Chinese market, not only face Tesla, but also face the three major local brands "Wei Xiaoli", which gives a sufficient reason to find Huawei.
Whether it is the market or technology, Huawei is the one who will not let go.
Since the official establishment of Huawei's intelligent vehicle solution BU in 2019, Huawei has continued to develop rapidly in its automotive business after integration and structural adjustment. At the Huawei Intelligent Vehicle Solution Ecology Forum at the end of last year, Yu Chengdong, CEO of Huawei Intelligent Vehicle Solution BU, said that in the field of smart vehicles, based on new electrical and electronic architectures and new platforms, Huawei launched the intelligent vehicle digital platform iDVP, the intelligent driving computing platform MDC, and the HarmonyOS intelligent cockpit, providing three digital bases and development tools for smart cars.
Wang Jun, chief operating officer of Huawei's intelligent vehicle solution BU and president of the intelligent driving solution product line, revealed that in the past year or so, Huawei has developed about 300 partners in the field of intelligent vehicles, and the development speed has exceeded expectations.
Write at the end
The Financial Times previously combed the fuel vehicle models launched by Toyota in the past two years, found that the iteration speed of its intelligent applications has increased significantly, and then associated with the concentrated appearance of more than 10 Toyota electric vehicles, all of which hinted that Toyota is trying to make up for this shortcoming. It is not difficult to see that traditional car companies are trying their best to shorten some gaps in this difficult change.
Volkswagen is a very radical electrification in traditional car companies, but in the short board of intelligence, it still needs to "borrow a force". The battlefield of electric vehicles will soon see the face-to-head confrontation between traditional car companies and new forces, from this point of view, the intelligence given by software is the killing point, Huawei is a good hand, Bosch is also a good hand.
(Proofreading/Sharon)