Volkswagen is expected to announce a €2 billion joint venture (JV) with China-based Horizon Robotics to improve its software development and production. The German automaker appears hyper-focused on improving its software development process since former CEO Herbert Diess left the helm.
The Chinese company focuses on open, scalable, and low-energy automotive computing platforms. It offers autonomous driving, ADAS, and in-cabin solutions. The China-based company also offers Mobility as a Service (MaaS) solutions to scale delivery robots or fleets. Horizon Robotic’s specialty is in artificial intelligence (AI), and its partners include Bosch, Audi, BYD, and Saic Motors, among others.
Volkswagen is expected to hold a press conference about the €2 billion joint venture with Horizon Robotics on Thursday, October 13. According to Handelsblatt, VW hopes the JV would help bridge the software gap it has with other EV automakers in China—and probably the lead electric vehicle automaker on the market: Tesla.
Volkswagen’s Software Goals
About 40% of VW’s sales and half of its profits are from China. Volkswagen is still a market leader in China since most drivers still use fossil-fuel vehicles there. However, trends show that electric cars are gaining traction in the Chinese auto market, with local automakers, like BYD, Xpeng, and Saic Motors, releasing vehicles in the EV market. The younger generation, in particular, is more open to new energy vehicles.
Software is a big part of electric vehicles in China, given the cool features it introduces to the car. Digitalization has become an essential foundational pillar for EVs as the concept or idea of vehicles are redefined, and Volkswagen seems aware of it.
In September, Volkswagen created a New Mobility division, combining its electric vehicle series with software expertise. Volkswagen’s New Mobility division works with the company’s automotive software subsidiary CARIAD. The new department’s head is Thomas Ulbrich, who worked on the ID.3 and ID.4.
“With the newly created New Mobility division, we’re bundling the strategic action areas of electric mobility and software, thereby increasing our pace of innovation. The goal is to offer our customers top-quality hardware and software that’s very easy to use. I am delighted Thomas Ulbrich is taking on this task,” said says Thomas Schäfer, CEO of the Volkswagen Passenger Cars brand and Head of the Brand Group Volume.