In a new twist, Volkswagen is investing billions to supply vehicles for Chinese customers.
Key Details
- German carmaker Volkswagen is investing €2.4 billion ($2.3 billion) in China’s Horizon Robotics Inc. to supply China with autonomous cars.
- The demand for autonomous vehicles in China is high and considering the country is Volkswagen’s biggest market this partnership was made to meet the demand.
- The venture between the two will develop automated and assisted driving systems for China, integrating numerous functions on one chip to save costs and lower energy consumption, according to VW.
Why it’s news
Autonomous cars have been a big topic of discussion around the world for the past few months and China is ahead of the curve.
Demand for autonomous cars in China is high and Volkswagen is rushing to meet the demand of its customers in the market.
VW invested billions in Horizon Robotics to make the presence of the company strong within its big Chinese market.
The joint business venture “will enable us to tailor our products and services even faster and more consistently to the needs of our Chinese customers,” says Ralf Brandstaetter, who leads VW’s business in China.
VW delivers around 40% of its inventory to China making it the company’s biggest buyer. Since VW has partnered with Chinese company Horizon Robotics the technology will be built for the carmaker’s battery-only models sold in China to accelerate innovation in a market where consumers increasingly pick local EV brands, according to Bloomberg writer William Wilkes.
Horizon Robotics is a diverse company that creates chips for multiple things from cars to speakers making it a smart investment for VW. Along with the car making deal and the €2.4 billion investment, VW will take a stake in the company and be on the board.
Other autonomous vehicles
Volkswagen isn’t the only one tapping into autonomous driving.
The self-driving car business Cruise, mostly owned by General Motors, has a robotaxi fleet and is planning to expand it to Phoenix and Austin.
Passengers can request the car like any other taxi and it will take them to their destination.
As of now, Cruise only offers its self-driving cars in San Francisco, where it was able to begin charging for rides this year. It took years for the cars to be able to charge money in the city, but the company says it can do it in Phoenix and Austin in 90 days.