Moderation Team
Volkswagen plans to invest 2.4 billion euros in a joint venture with one of China’s leading designers of artificial intelligence chips, as the carmaker bets on AI and driverless cars as a way to retain a share of its largest market.
The German carmaker, which makes nearly half of its net profit in China, said Thursday it had agreed to partner with Horizon Robotics “to accelerate the development of automated driving.” [and] Leading the reorganization of our business in China.”
VW’s software company Cariad will acquire 60 percent of the joint venture with Horizon. The transaction is expected to be completed in the first half of 2023, pending regulatory approval.
The link comes at a time of heightened tension between Beijing and the West, as the Biden administration announced last week that it would tighten restrictions on the export of semiconductors made with American technology to China.
Volkswagen has also faced pressure from unions and shareholders over its Xinjiang plant, where China has been accused of human rights abuses against the Uighur minority.
The company has always said it has seen no evidence of problems at its plant, which has produced cars for the Chinese market since 2013 with its local partner, SAIC.
By partnering with Horizon, one of China’s most successful chipmakers, VW is trying to retain access to high-end chips in China, said Tue Le, managing director of Sino Auto Insights, a Beijing-based consultancy.
“It looks like a defensive game. But it is also likely to flatter the Chinese government.”
It’s one of the first big announcements since Oliver Blume took over as CEO of Volkswagen just over a month ago.
Blume, who is also the head of Volkswagen’s Porsche business, took over the position after ousting his predecessor Herbert Diess, in part due to criticism over VW’s software development program and recent poor performance in China.
Ralf Brandstätter, Head of China Business for Volkswagen, described the partnership as “the central cornerstone of our strategy to reorganize and strengthen our activities in our most important markets worldwide”.
Horizon Kai Yu, founder and head of Baidu’s deep learning program, runs the Chinese version of Google.
The company, which Kai co-founded in 2015, is headquartered in Beijing and has offices in Silicon Valley, Shanghai and Shenzhen. Over the course of seven years, it raised a total of $2.2 billion in 12 funding rounds, according to Crunchbase.
Its major investors include chipmakers Intel and SK Group, private equity and venture capital groups including Hillhouse Capital, Sequoia and 5Y Capital, and automakers including Tesla competitor BYD, and CATL, the world’s largest maker of electric car batteries.
Source: chof360.com
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