Chinese tech giant Huawei and German automaker Volkswagen are planning to establish a joint venture to develop autonomous driving technologies, Chinese media source 36Kr reported, citing people familiar with the matter.
According to the report, Huawei will primarily act as a supplier for Volkswagen, which will be the majority shareholder and the controlling party of the joint venture. Huawei will provide technology intellectual property (IP), including software technology and chip IP.
Verdict reached out to Huawei, which declined to comment, saying “we are not confirming it”.
With the establishment of the joint venture, Huawei will also contribute many senior technical staff members. According to 36Kr, Su Qing, a former executive in Huawei’s automotive branch and former head of its intelligent driving product department, will be part of the joint venture.
The cooperation between the companies has been long anticipated. In July, the two sides announced a license agreement, which will see Huawei supply its 4G standard essential patents for Volkswagen vehicles equipped with wireless connectivity. This deal was Huawei’s largest licensing deal in the automotive industry.
The Shenzhen-based company has made a steadfast push into the auto sector, despite having said on various occasions that it would not make cars. Instead, it aims to leverage its knowledge in the information and communications technology field to supply smart car solutions to original equipment manufacturers (OEMs). The company has entered into more than 100 patent license agreements with global companies to implement its intelligent driving software.
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In August, Huawei announced a strategic partnership with Chinese carmaker Hozon Auto, whereby it would provide expertise on the internet of things (IoT), cloud computing and big data technologies.
The president of Huawei’s smart car solutions division, Wang Jun, said in April that the firm planned to invest $1bn into the research and development of intelligent driving technologies this year. He added that the R&D group of Huawei’s vehicle branch would be expanded to over 5,000 staff members in 2021, of which more than 2,000 would be assigned to the autonomous driving wing.
Huawei’s ambitions form part of a larger trend of consumer hardware manufacturers and suppliers moving into the automobile industry. Other smartphone brands, including Xiaomi, Oppo Vivo and Apple, have also announced plans to build cars.
Foxconn, iPhone’s primary assembler, recently revealed three prototype electric vehicle models. At the unveiling ceremony on Monday, the company’s chairman Young Liu confessed that “our biggest challenge is we don’t know how to make cars,” highlighting the difficulty of moving from smartphone manufacturing to automaking.
Meanwhile, many global vehicle manufacturers are seeking partnerships with Chinese firms to enter the world’s largest automotive market. Last month, General Motors announced that it would invest $300m to accelerate the development of next-generation self-driving technologies for future GM vehicles in China.
Volkswagen had previously already made a push into the Chinese market. Earlier this year, the German company reached a deal with DJI – a Shenzhen-based company traditionally focussing on drone technology – to advance its software and technology business, Cariad.