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| Volkswagen is negotiating the purchase of Huawei's self-driving device |
German magazine Magazin reported that Volkswagen is in talks with Huawei to buy its new self-driving device worth billions of euros.
Huawei's autonomous driving unit is part of the Smart Car Solutions business unit for communications equipment and smartphones, which was established in 2019.
The formation of the entity has raised a lot of speculation about whether Huawei will develop its own car. The company has repeatedly denied production plans. Instead, she says, you want to become a Bosch in China or a parts supplier for car brands.
So far, Huawei seems to be sticking with this strategy. Last year, the Shenzhen-based company showcased self-driving solutions pre-installed in sedans from BAIC Group's new electric vehicle maker Arcfox brand.
Huawei provides the chipset and in-vehicle operating system for electric sedans. Tech companies with self-driving capabilities can help Volkswagen realize its ambitions to build the car of the future.
The German giant has partnered with Argo AI, the Pittsburgh-based startup backed by Ford and VW.
Last September, Volkswagen and Argo AI unveiled an autonomous electric truck, the first product of their joint effort.
No wonder the German company is looking for a similar technology partner in China, its biggest market in 2020.
Some self-driving car makers in China have forged close ties with automakers. Baidu has a joint venture with Geely. Didi also has a joint venture with BYD.
Volkswagen and Huawei are negotiating a billion-dollar deal
The acquisition comes at a critical time for Huawei's independent leadership team.
The Chinese company's former head of self-driving products, Su Jing, left the company in January after making inappropriate comments from Huawei about Tesla, blaming fatal accidents involving people driving themselves.
Jing is known to hate self-driving taxis. "Any company that sees self-driving taxis as an ultimate business goal is doomed to fail," he said in an interview last year.
The cost of acquiring a self-driving business from Huawei is not high. The company's smart car division plans to spend a total of $1 billion on research and development in 2021.
It also plans to build a research and development team of 5,000 people, more than 2,000 of whom will work on autonomous driving.
Huawei has invested heavily in intelligent driving and its customer base continues to grow. But it begs the question of why the startup was abandoned.