On Monday, there was a market rumor, which attracted strong attention from the smart car industry.

Recently, according to the German financial media manager magazine, Volkswagen Group is negotiating with Huawei and plans to buy Huawei’s automatic driving department for billions of euros. The report quoted people familiar with the matter as saying that the senior management of Volkswagen Group has negotiated the deal for several months, including technical systems that Volkswagen is not good at.

In this regard, Volkswagen China and Huawei did not respond positively, saying “no comment” and “no comment” respectively.

The cooperation between Volkswagen Group and Huawei can be traced back to July 2018. At that time, Huawei and Audi brand of Volkswagen Group signed a memorandum to jointly develop intelligent networked vehicles. In short, Huawei will provide Audi with ads automatic driving technology, which is also a way adopted by many car companies.

By October 2021, the two sides are ready to expand the scope of cooperation. At that time, 36 krypton reported that Huawei planned to establish a joint venture with Volkswagen Group to develop automatic driving technology. One of the ways of cooperation discussed by the two sides is to invest by Volkswagen Group to become the controlling party of the joint venture. Huawei mainly provides technical IP (i.e. intellectual property). Among them, the technical IP provided by Huawei includes not only software technologies such as automatic driving, but also Huawei’s chip IP.

At first, Huawei responded that the news was untrue. However, in January 2022, Feng Sihan, CEO of Volkswagen China, said that Volkswagen and Huawei did have discussions, but there was no confirmatory news at this stage, “including the establishment of a joint venture between the two sides”.

01 “marriage” phantom

At present, there is no consensus in the industry whether the two sides are joint venture or acquisition. Ultimately, it depends on the official announcement of both sides. According to the current news, if Huawei chooses to sell this business, the protagonist is probably the autonomous driving team led by Su Qing, President of Yuanhua intelligent driving.

Su Jing introduced in April 2021 that the team of Huawei ads Shanghai Research Institute led by him has about 2000 people, including 1200 pure Algorithm Engineers. Specifically, in terms of product line, the number of teams such as box and lidar ranges from 200 to 300.

Huawei 96 line lidar has been applied to polar fox alpha s Huawei hi version

However, there is no exact information on whether the cooperation involves the whole team.

At the end of January, it was reported that Su Qing resigned from Huawei, which was also confirmed by Huawei. At that time, there was a saying that Su Qing’s resignation and whereabouts were related to public cooperation. Su Qing will lead the CTO team of Volkswagen in China.

At the same time, Su Qing also expressed his optimism about Volkswagen’s driverless, “I personally think that among the major automobile manufacturers in Europe, Volkswagen is actually ahead in thinking. It has something to do with their exploration of automatic driving for so many years, and the ideas of other countries are still in the process of progress.”

Previously, Su Qing had been marginalized within Huawei. In July 2021, a personnel appointment and removal document released by Huawei showed that Su Jing was removed from the post of director of intelligent driving products department. The reason is that he used the words “murder” when talking about the Tesla accident, which caused controversy.

However, some people in the industry believe that Huawei will not sell the automatic driving department. Cui Dongshu, Secretary General of the all China passenger Federation, told geek park that the cooperation between Huawei and Volkswagen is more likely to be a joint venture between the two sides, or Huawei provides intelligent and automatic driving solutions to the public, which is similar to the cooperation mode between waymo of Google and host manufacturers. If it is a sales department, it may bring some management, cultural and other problems. Without Huawei’s system, there are some unknowns about how much role the original team can play.

Driverless driving has become a general trend, and the market space in the future will exceed trillion US dollars. Huawei did not hesitate to invest in R & D funds and occupied a good situation in the competition. In 2020, Huawei invested about US $500 million in automobile related R & D, which doubled to more than US $1 billion in 2021.

Recently, Wang Jun, bu COO of Huawei’s intelligent vehicle solution, said, “Huawei’s intelligent driving technology will be commercially available in 2022, with the goal of realizing real intelligent driving from 2025 to 2030.”

Huawei has invested heavily in intelligent driving. Today, the technology tends to be mature and the customer base is increasing. It is hard to imagine that Huawei will rashly decide to give up this business.

An insider told geek park that this cooperation may be similar to the previous glorious transaction. It is a plan to deal with the extreme pressure and a strategic adjustment after Huawei entered the bureau to build a car.

02 what do you like?

The cooperation between Volkswagen and Huawei mainly focuses on unmanned driving. What do both sides want from it?

Among traditional manufacturers, Volkswagen is the most radical in the transformation to new energy and is more aware of the real potential of driverless. Volkswagen CEO dis said in September 2021, “automatic driving will really change our industry, which is unprecedented. In contrast, it is a little easy to change to electrified vehicles. It is software and automatic driving that really change the rules of the game.”

At the same time, he also expects that the automotive industry will see a wide range of automatic driving within 25 years. Volkswagen is seeking new partnerships to improve its self-sufficiency in software. According to Volkswagen’s goal, cariad will provide 60% of Volkswagen’s software by 2025, up six times from 10% when the Department was established.

Cariad, software department of Volkswagen Group

To this end, the public has formulated a huge transformation plan. In December 2021, Volkswagen announced that it would increase its investment in electric vehicles and digitization in the next five years, with an investment of 89 billion euros. Among them, Volkswagen Group will invest US $30 billion in digital technology and automatic driving. In the same month, Volkswagen announced a number of personnel adjustments, and CEO dis was appointed to take over the software department cariad.

Although Volkswagen has previously made a layout in terms of driverless, there is still a big gap with Tesla, the industry leader. Volkswagen executives have said on different occasions that “Tesla is 10 years ahead of its competitors in manufacturing electric vehicles and software” and “Tesla is in a leading position in software and automatic driving