German motor vehicle manufacturer Volkswagen Group announced on October 13 a new partnership between its software company CARIAD and Horizon Robotics, a leading provider of computing solutions for smart vehicles in China.
As part of the deal, CARIAD and Horizon Robotics plan to establish a joint venture in which CARIAD will hold a 60 percent stake. Volkswagen Group will invest approximately EUR 2.4 billion ($2.32 billion) overall in the cooperation with Horizon Robotics. The transaction is expected to be completed in the first half of 2023.
Together, CARIAD and Horizon Robotics will accelerate the regional development of Advanced Driver Assistance System (ADAS) and Autonomous Driving (AD) systems for the Chinese market.
Further, they intend to drive forward the integration of numerous functions on one chip, increase the stability of the system, save costs, and reduce energy consumption. The integrated software/hardware technology offers differentiation and provides scalable as well as cost efficient ADAS/AD solutions for the group’s BEV (Battery Electric Vehicles) models in China.
The closing of the transaction is subject to the final signing of transaction documents between the parties involved and customary government approval and the approval of merger control and foreign investment authorities.
Volkswagen is strengthening its development competence with the idea of “in China, for China” to accelerate its pace of innovation, promote technological localization and further strengthen its customer focus in this important market.
“The partnership with Horizon Robotics is a central cornerstone of our strategy to realign and further strengthen our activities in our most important market worldwide. Localized technology development grants the region more autonomy to further expand its position in the dynamic automotive market. Cutting edge technology comprising the full software and hardware stack, which the new joint venture will develop, will enable us to tailor our products and services even faster and more consistently to the needs of our Chinese customers. Teaming up with Horizon Robotics will allow Volkswagen to accelerate the development of automated driving solutions as part of our NEW AUTO strategy and drive the repositioning of our China business,” said Ralf Brandstätter, Member of the Management Board of Volkswagen AG for China.
Horizon Robotics was founded in 2015 and focuses on automotive smart chips. At present, it has signed mass production projects for more than 70 vehicle models with more than 20 vehicle companies while the cumulative shipments of its Journey series chips have exceeded 1.5 million.
It is also favored by capital. According to public information, as of September 2022, the firm has completed 15 rounds of financing. Aside from the undisclosed financing amount, it has raised more than $3.4 billion in total.