Volkswagen is rumored to be buying Huawei Autopilot for billions of euros. CEO Diess says he is looking for a new partnership. Will it happen?

2022-04-30 0 By

Volkswagen group and Huawei are rumored again.On February 17, German financial media Manager magazine reported that Volkswagen Group is in talks to buy Huawei’s autonomous driving unit for billions of euros.In this regard, Volkswagen group and Huawei said not to comment.Senior managers of Volkswagen Group and Huawei have been negotiating the deal for several months, but the exact amount of the acquisition has not yet been determined, according to sources.Relevant sources said, at present, the two sides of the acquisition of the price gap is larger, the difference or more than hundreds of millions of euros.Up to now, as to the two specific offer and negotiation process, both sides have not disclosed.In fact, the two sides have been rumored before.In October 2021, media reported that Huawei would form a joint venture with Volkswagen Group, aiming to provide solutions to Volkswagen Group as a supplier, according to multiple sources familiar with the matter.According to the report, one of the ways the two sides have discussed cooperation is for Volkswagen Group to become a controlling shareholder of the joint venture, with Huawei mainly providing technical IP (intellectual property).Technical IP addresses provided by Huawei include not only software technologies such as autonomous driving, but also huawei chip IP addresses.In response, Huawei said the news is not true, Volkswagen group said there is no official information.It is worth mentioning that Huawei has previously reached cooperation with Audi, a subsidiary of Volkswagen Group, to provide huawei’s ADS autonomous driving technology solution to the latter.”Through our cooperation with Huawei, we will continue to strengthen our research in the field of intelligent connected vehicles,” Audi China Executive Vice President Michael Meissard said at the time.”It is our common goal to shape smart cities by improving safety and optimizing traffic flow, and our research will focus on the Chinese market first.”In addition, on July 7, 2021, Huawei also announced that it had reached a patent licensing agreement with a supplier of Volkswagen Group.It is understood that the agreement includes Huawei’s 4G standard Essential Patents (SEP) license, which covers Volkswagen vehicles equipped with wireless connectivity, and is huawei’s largest licensing agreement in the automotive sector to date.For Volkswagen Group, digital transformation is one of its key development directions in the future.According to previous plans, Volkswagen Group aims to increase the proportion of self-developed software in its cars to 60% by 2025 (the figure is below 10% in 2020).However, software has been one of Volkswagen group’s weak spots.An employee at Cariad, Volkswagen’s software unit, said the electric cars from the Volkswagen ID. Family have not been as popular in China as they had hoped, largely because it is impossible to make local digital improvements to the Chinese market from Germany alone.Recently, Volkswagen Group CEO Herbert Diess said that he expects autonomous driving technology to be widespread in the auto industry within 25 years, and that the company is seeking new partnerships to become more self-sufficient in software.Some argue that such an acquisition could also be a favourable option for Huawei.At present, Huawei is trying to sell its autonomous driving package to auto companies, but auto companies have always regarded autonomous driving as the “soul” and prefer to develop it themselves, so Huawei is also facing the problem of developing new customers.Yu Chengdong, managing director of Huawei, CEO of Consumer BG and CEO of Huawei intelligent vehicle solution BU, told The National Business Daily recently, “We plan to sell cars in 1,000 stores by the end of this year, assuming that each store can sell 30 cars a month.So the challenge is to sell 30,000 cars a month, so that the annual sales of our auto partners will reach 100 billion yuan.””Last year we launched the very competitive AITO Wenjie M5 (huawei’s first premium brand with Cyrus), which can challenge 300,000 units based on our current brand marketing and retail channel capabilities.At the same time, we place the highest priority on satisfying the customer experience.”Yu chengdong said that at present, the M5 is still in the climbing stage of production capacity, the supply problem can not be underestimated, the annual sales of 300,000 units is also a challenge.The analysis thinks, although huawei autopilot department has a very profound technology accumulation, but under the current vehicle in huawei with the force, creating didn’t carry huawei automated driving technology, at the same time carry huawei self-driving technology product sales is not very desirable, this is more in need of long tail according to iterative upgrade huawei automated driving technology is a big challenge.If Huawei’s autonomous driving unit is acquired by Volkswagen group, its challenges in autonomous driving data may be resolved, but will the acquisition be finalized?The industry will be watching.Source: National Business Daily