The autonomous driving space could see the marriage of two titans. Volkswagen is in talks with Huawei to acquire the latter’s fledgling self-driving unit for billions of euros, German Manager Magazin reported on Thursday.
Huawei said it had no immediate comment when contacted by TechCrunch. VW China said it had no comment.
The potential merger will be powerful. Huawei’s self-driving unit is part of the telecom equipment and smartphone giant’s “Intelligent Vehicle Solutions” business unit, which only started in 2019. no manufacturing plans and said it wants rather be the “Bosch of China”, or a supplier of components for automotive brands.
Huawei seems to have stuck to this strategy, at least so far. Last year, the Shenzhen-based company showcased its automated driving solutions that had been pre-installed in a mass-produced sedan by Arcfox, a new electric car brand from Chinese automaker BAIC. Huawei provided the electric sedan’s chipset and on-board operating system.
For VW, a tech company with self-driving capabilities could help advance its ambitions to manufacture the vehicles of tomorrow. Indeed, the German giant has entered into a partnership with Argo AI, a Pittsburgh-based startup backed by Ford and VW. Last September, the duo unveiled the first product of their joint effort, a self-driving electric van.
It wouldn’t surprise anyone if VW was looking for a similar technology partner in China, its biggest market in 2020. A number of Chinese autonomous vehicle companies have already forged close relationships with automakers; Baidu has a joint venture with Geely and Didi has a JV with BYD.
The reported acquisition comes at a delicate time for Huawei’s AV team. Su Jing, the Chinese company’s former self-driving product manager, left the company in January after making what Huawei called “inappropriate comments” about Tesla, blaming Autopilot’s fatal crashes of “killing people.” people”.
Since his departure, the Huawei veteran’s next step has sparked a lot of speculation. What we do know is that Su doesn’t like robotaxis. In an interview last year, the outspoken executive said, “Any company that sees robotaxis as its ultimate business goal is doomed to failure. Those who can deliver robotaxis will be those who work on passenger cars. This market is definitely going to be mine, but not yet.
An acquisition of Huawei’s self-driving business won’t come cheap. The company’s smart car unit planned to spend a total of $1 billion on R&D for the year 2021. It also aimed to build an R&D team of 5,000 employees, with more than 2,000 working solely on autonomous driving. The question is: Huawei has already invested so heavily in smart driving, with a growing number of customers, why give up on this fledgling company?