German Volkswagen met Huawei for car software [Updated]

Update: – Volkswagen AG Chief Financial Officer Arno Antlitz said Wednesday the automaker is not currently in talks with Chinese technology company Huawei. (via Reuters)

Original Story:

Germany’s famous car maker Volkswagen is in talks with Huawei to use its software in cars in China. If sealed, the deal will be a major boost for Huawei’s effort to expand its car solution in the market.

FT reports that Volkswagen and Huawei are continuously engaging in meetings to come to an understanding of Huawei technology for vehicles. As car maker is facing issues with their software development arm for new cars. This led to a massive layoff of all of the entire software executives.

Volkswagen is one of the largest car sellers in China. However, the EV market is quite challenging for the company and Tesla and BYD are far ahead in the competition. Therefore, the firm is now heading toward the biggest player in-car systems, Huawei.

Tu Le, the founder of Sino Auto Insights, a Beijing consultancy, said the foreign carmakers’ struggle “to put anything competitive on Chinese roads” has ultimately created an opportunity for Huawei.

“Huawei has only been able to partner with local Chinese brands, many of them with fewer sales, but if they can secure a partnership with a major foreign [carmaker], it legitimizes the tech and brand,” he said.

Huawei has not commented on the potential car software partnership with Volkswagen.

Huawei and VW:

It is reported that Huawei and the Audi brand of the Volkswagen Group signed a memorandum of understanding on strategic cooperation in Berlin in July 2018 to jointly develop intelligent networked vehicles. In cooperation in the field of autonomous driving, the comprehensive strategic cooperation between Audi and Huawei has also gone a step further.

As early as October 2021, there was news that Huawei planned to form a joint venture with the global auto giant Volkswagen Group to develop autonomous driving technology. One of the ways to discuss cooperation is that the Volkswagen Group contributes capital and becomes the controlling party of the joint venture company. Huawei mainly provides technical IP (that is, intellectual property rights).

Among these, the technical IP provided by Huawei includes not only software technologies such as autonomous driving, but also Huawei’s chip IP.

Regarding Huawei and Volkswagen’s joint venture to establish an autonomous driving company, Feng Sihan, CEO of Volkswagen China, said that the two parties are indeed discussing, but there is no confirmed news at this stage, “including the establishment of a joint venture company between the two parties.”

VW has been overhauling its sprawling business to free up money to develop batteries and software capabilities. In December last year, the company stated that it would invest 89 billion euros (IT home note: currently about 675.51 billion yuan) in future technologies such as electric vehicles and digitalization in the next five years to improve the company’s competitiveness.

In October last year, it was reported that Volkswagen Group is planning to invest and establish a software production joint venture in China, with an investment of more than 1 billion euros.

(source)