On Thursday, Volkswagen said that its software unit Cariad will spend more than USD 2 billion and take a 60 per cent stake in a new venture with Horizon Robotics, the Chinese technology company.

The carmaker will invest USD 1 billion in Horizon Robotics and a further 1.3 billion euros (USD 1.26 billion) in the joint venture, with the transaction to be completed in the first half of 2023.
Together the companies are going to develop technology which can integrate various functions for autonomous driving onto a single chip which will be available only in China.

The venture will imply Volkswagen has a supplier in each major region – North America, China and Europe – given its existing supply relationships with US chipmaker Qualcomm and Franco-Italian STMicroelectronics.

Contrary to the partnership with Qualcomm, Volkswagen’s software unit Cariad intends to play a crucial role in developing the chip technology with Horizon Robotics, and the know-how are to be shared across the Volkswagen Group.

This venture is part of a push by Volkswagen to bolster its software offering and make its mark in Chinese electric vehicle market, where it lags behind domestic competitors – notably BYD and Tesla.

Founded in Beijing in 2015, Horizon Robotics has supplied customers including Volkswagen’s Audi, BYD, Continental, Li Auto and SAIC.