Volkswagen is reportedly in discussions with Huawei's automotive division to acquire a project team that is developing self-driving car technology or autonomous cars.
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.
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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.
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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.
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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.