Volkswagen is in talks with Huawei to acquire its emerging self-driving unit for billions of euros, German magazine Manager Magazin reports.
Huawei’s autonomous driving unit is part of the telecom equipment and smartphone giant’s smart vehicle solutions business unit, which started in 2019.
The establishment of the unit has raised a lot of speculation about whether Huawei might develop its own cars. The company has repeatedly denied any manufacturing plans. Instead, she said, she wants to serve as China’s Bosch, or a supplier of components for car brands.
And Huawei seems to have stuck to this strategy so far. The Shenzhen-based company last year demonstrated automated driving solutions that were pre-installed in a sedan from Arcfox, a new electric vehicle brand of Chinese automaker BAIC.
Huawei provided electric sedans with the chipset and in-vehicle operating system. And for Volkswagen, a technology company with autonomous driving capabilities can help advance its ambitions to build the vehicles of tomorrow.
The German giant has partnered with Argo AI, a Pittsburgh-based startup backed by Ford and Volkswagen.
Last September, Volkswagen and Argo AI unveiled a self-driving electric truck, the first product of their joint effort.
It is not surprising that the German company is looking for a similar technology partner in China, its largest market as of 2020.
A group of China’s self-driving car companies have cemented their deep ties with automakers. Baidu has a joint venture with Geely. Didi also has a joint venture with BYD.
Volkswagen and Huawei negotiate a $1 billion deal
The expected acquisition comes at a critical time for Huawei’s self-driving team.
Su Jing, the former head of the Chinese company’s self-driving product, left the company in January after making what Huawei called inappropriate comments about Tesla, accusing fatal autopilot incidents of killing people.
Jing is known to hate self-driving taxis. “Any company that sees self-driving taxis as its ultimate business goal is doomed to fail,” he said in an interview last year.
And the acquisition of Huawei’s self-driving business will come at little cost. The company’s smart car unit had plans to spend a total of $1 billion on research and development for 2021.
It also aims to build a research and development team of 5,000 employees, with more than 2,000 of them working on self-driving alone.
Huawei has invested heavily in intelligent driving, with a growing group of customers. But the question that poses itself is why give up this startup business.