According to Jiemian, a news source in China, the two sides will later form a joint venture. Volkswagen will provide funding and control the company, while Huawei will provide the technology needed to become a Tier 1 supplier.
“It's like Huawei selling its self-driving technology business to Volkswagen for around $1.6 billion,” said the anonymous source.
Based on information circulating, previously Volkswagen was also in talks with Huawei to buy a self-driving unit. Furthermore, the German automotive giant promised a new solution for the cars they produce in China.
Meanwhile, 36kr reported, Huawei will provide a number of senior technicians to support the joint venture.
The company is even ready to send former autonomous division executives and heads of its self-driving products department to join.
When confirmed in January, Volkswagen China CEO Stephan Wollenstein said the company and Huawei were indeed in discussions. But he was unable to confirm the news of the formation of a joint venture between the two companies.
As is known, almost all car manufacturers in the world are currently competing to develop self-driving cars and launch them to the market.
The reason is simple, self-driving cars have the potential to generate more profit by selling them as a means of transportation than cars.
On the other hand, Volkswagen itself actually has no shortage of talented software engineers to develop self-driving cars.