Volkswagen finally going after Huawei self-driving?Joint ventures may be larger than acquisitions
The rumor that Volkswagen will merge with Huawei’s autonomous driving unit has been updated recently.Volkswagen is in talks to buy Huawei’s autonomous driving unit for billions of euros, The German magazine Manager reported on February 17, citing sources familiar with the matter.Executives from both sides are understood to have been in talks for months, involving some technology systems in which the VW group has little advantage.Gasco immediately sought confirmation from huawei BU, who said, “I have no knowledge of it and I just read the news.”Vw China said it had “no comment”.In fact, this is not the first time Volkswagen has been caught stealing the attention of Huawei’s autonomous driving unit.In October 2021, it was announced that Volkswagen Group planned to form a joint venture with Huawei to develop autonomous driving technology.At that time, many employees from Huawei’s autonomous driving product line received “internal job transfer interviews”.This was later denied by Huawei.In January, in response to rumors of a possible self-driving joint venture between the two companies, Volkswagen Group China CEO Hans Von Sihan said the two companies were indeed in discussions, but there was nothing confirmed at the time, including a joint venture.Two enterprises before and after the reply caliber is not consistent, also let everyone for their cooperation may have more speculation.In particular, as the intelligent technology with automatic driving as the core is constantly recognized as the key to win the second half of new energy vehicles, all major car companies are increasing their technical reserves in this field, and Volkswagen is also trying to seek partners in related fields.Since Huawei proposed the strategic planning of “focusing on ICT technology to help automotive enterprises build good cars” and determined to become the incremental component supplier of intelligent connected vehicles, it has been continuously deepening its layout in the automotive field in the past two years and has become a new cutting-edge force that cannot be ignored in the intelligent electric vehicle supply chain.So a successful tie-up would be a veritable alliance of powers.But the question is, will Huawei be willing to sell?In the automotive field, Huawei has a long history of layout, and automatic driving plays a pivotal role.Previously, it was revealed that in huawei’s intelligent vehicle solution BU, more than 2,000 intelligent driving professionals have invested in a team of more than 5,000, which shows the importance of the project.For intelligent electric vehicles, Huawei can not only provide a single component, including a full set of intelligent components such as lidar and AR-HUD, but also provide system-level overall solutions for intelligent driving, intelligent cockpit, intelligent electric, intelligent networking and intelligent vehicle cloud.Huawei’s lidar, 4D imaging millimeter wave radar, 77GHz millimeter wave radar, high-precision map, AR-HUD augmented reality head-up display scheme, MDC intelligent driving platform and CDC intelligent cockpit platform have been exhibited to the public on several occasions before, and some products have been successfully mass produced or will soon be mass produced.Huawei 96-line lidar has been applied to the Polar Fox Alpha S Huawei HI edition.Baic polar fox huawei’s 96 lines long distance laser radar, for example, has been used in Beijing auto fox alpha version of the model S huawei HI, another Great Wall’s high-end brand salon car first models mecha dragon, changan high-end intelligent electric car brand new vita vita 11 and which zha S o the first models also said it would carry huawei laser radar.Huawei MDC intelligent driving platform, in addition to the Extreme Fox Alfa S Huawei HI edition, has also been confirmed to be equipped with GAC Eon LX Plus, Great Wall Salon brand Mechatron and other models, is initially opening the market.As for system-level autonomous driving solutions, Huawei mainly focuses on ADS, a full-stack intelligent driving solution.Huawei’s design idea is to “start from the beginning to the end”, that is, based on L4 level automatic driving architecture, to provide full-stack solutions for L4~L2+ level automatic driving to meet the needs of different vehicle enterprises.According to Huawei’s plan, ADS will cover multiple different application scenarios, such as complex urban areas, urban ring roads, high-speed roads and parking, to provide continuous daily commuting experience for private car owners and solve the high-frequency application scenarios from home to office and office to home for each car owner.At present, although the autonomous driving solutions of some enterprises have performed well in single scenes such as highways, urban expressways and parking, typical examples are Xiaopeng NGP, NIO NOA and Great Wall NOH, etc., in the long run, the ultimate goal of autonomous driving is to break through various segmentation scenes.To provide users with real multi-scene or even full-scene fusion of automatic driving experience.Because of this, major car companies and technology providers are making efforts to go beyond this direction. Xiaopeng Automobile has previously announced that it will open urban NGP in some regions in the first half of 2022. In addition, mainstream car companies such as NIO, Great Wall and Zhiji also have similar plans.Huawei’s ADS has been installed on huawei HI version of Pole Fox Alpha S, which can realize APA automatic parking., according to previous related test video ADS huawei due to call at the same time the laser radar, cameras, a variety of different sensors, detection ability improved, even higher vertical “break” parking difficulty coefficient, powered vehicles can also easily anchored into the car, and parking speed faster than the general auxiliary driving system.In the driving scene, according to the previous test video, Huawei ADS has also completed the automatic driving experience of city and expressway, which can realize automatic driving functions such as straight driving, left turning and unprotected turning.Although some netizens have different opinions on the evaluation results, on the whole, Huawei’s efforts in promoting the mass production of autonomous driving are obvious to all, and more importantly, it has initially gained recognition from the market.Volkswagen’s ambitions “Autonomous vehicles, not electric vehicles, are the real game changer in the automotive industry.”Volkswagen CEO Herbert Diess once said this about autonomous driving.Fully aware of the promise of autonomous driving applications, Herbert Diess has ambitious plans to overtake Tesla by 2025, and even wants Volkswagen to become the leader in autonomous driving.To that end, VW has announced plans to invest 150 billion euros ($178 billion) by 2025 to accelerate the transition to autonomous driving and electrification, with the first self-driving cars on the market by 2025.Over the past few years, VW has made a wide range of moves into autonomous driving, most notably its joint investment with Ford in autonomous driving startup Argo AI.In this way, Vw and Ford hope to share technology and help reduce engineering and development costs, speeding up the timetables for both carmakers to deploy autonomous vehicles.In September 2021, Volkswagen Commercial Vehicles, in collaboration with Argo AI, launched the first ID Buzz autonomous test vehicle.Volkswagen subsidiary MOIA plans to launch a ride-sharing service based on ID Buzz commercially in Hamburg, Germany, in 2025. For this purpose, Volkswagen Commercial Vehicles has developed a separate business unit focusing on autonomous driving and acquired a stake in Argo AI.In addition, vw has acquired a minority stake in Tucson’s Future through its heavy truck unit Traton to test fleets of driverless trucks on the road in Sweden, Germany and other countries, and struck strategic partnerships with Intel’s Mobileye and Bosch’s Cariad earlier this year.Jointly develop driver assistance and autonomous driving technologies.Among them, the cooperation with Cariad mainly focuses on L2 and L3 autonomous driving system.Cariad and Bosch are seeking to develop L2 driving systems for city and highway driving that will be installed in Volkswagen Group vehicles from 2023, the companies said in a statement.In addition, the two companies will develop level L3 hands-off autonomous driving capabilities for highway driving.But as you can see, Volkswagen’s initiatives in autonomous driving are mostly overseas.In China, the most recent big move was in August 2020, when Volkswagen announced that it had won the qualification of self-driving open road manned operation in Hefei, and launched Volkswagen’s first pilot project of self-driving travel service in China.Since then, there has been little information on the project’s progress.Other automakers and major technology providers, on the other hand, are increasing their r&d investments in The Chinese market as China continues to lead the world in terms of intelligent and electrified vehicles.Gm’s investment in Momenta, a domestic autonomous driving unicorn, has accelerated the adoption of next-generation autonomous driving solutions tailored for Chinese consumers.Daimler, Mercedes Benz and Hyundai Motor Group opened new R&D technology centers in China last year, while Ford opened a new China Design center in Shanghai earlier this year to better establish its roots at home.Major technology providers, such as Bosch, Continental, ZF and Faugia, are also engaged in a new round of r&d arms race at home, upgrading their strategies from “for China in China” to “for the world in China”.Main rivals and friends are in the positive, if people don’t action will in this round of competition at a disadvantage, especially for such a highly complex system, automatic driving in different geographic environment and different technical characteristics under different driving rules, but also needs to be based on local research and development, that will be the investment in the domestic public step have to go.Recently, Volkswagen has decided to increase its investment in software research and development in China.In March last year, Volkswagen software officially changed its name to CARIAD, and it is reported that CARIAD will be launched in China in the future.The China headquarters of CARIAD will be set up in Beijing. The Anhui team will focus on standard software and electronic architecture for vehicle applications, while the Shanghai team will focus on autonomous driving.Chengdu is pure software department, mainly do coding programming.At this critical juncture, it would not be surprising if Volkswagen wanted to merge with Huawei’s autonomous driving unit.What are the chances of a “fit”?For Volkswagen Group, if it can successfully cooperate with Huawei, it will undoubtedly strengthen the localization layout of Volkswagen Group in China, greatly improve the r&d strength of autonomous driving, and help it develop more competitive products in China.As for Huawei, with the endorsement of the public, it can better realize the implementation and transformation of autonomous driving research and development achievements.But it also means huawei could lose control of the self-driving technology.At present, Huawei has two main business models in the automotive field. One is to sell parts to automobile enterprises and make traditional Tier1;The other is Huawei Inside mode, which is to jointly define and develop models with auto companies and provide overall solutions to auto companies. This mode is adopted between Huawei and BAIC Jihu, Changan Avita and a new car to be launched by GAC in 2023.Although mass production has made preliminary progress, the difficulties faced in this process are self-evident.Wang Jun, COO of Huawei’s intelligent vehicle solution BU, has previously pointed out that because the investment in autonomous driving is very large, the number of automobile enterprises that Huawei can support is very limited even if it works day and night.Moreover, in the face of Huawei’s overall package solution for autonomous driving, the specific acceptance of oems has been disputed by the outside world.Especially after SAIC put forward the “soul theory”, oems are re-examining the independent research and development and absolute control of the core technology of intelligent electric vehicles.But does that mean Huawei will give up halfway through?At present, this possibility is not big, because automatic driving is not only the core layout field of Huawei Automobile BU, but also the main development direction of the automobile industry.More importantly, giving up halfway is not in line with Huawei’s consistent “Wolf nature”.Gaishi Automotive Research Institute analysts believe that the probability of joint venture or strategic cooperation between the two sides is relatively large.There are three main reasons: First, Huawei’s large-scale investment in the automobile industry is not only to diversify its business and expand its automotive business through ICT digital technology, but also to open up the strategic layout of the interconnected ecology of everything.Second, autonomous driving is the core of huawei BU’s most distinctive technical solution and strategic investment, as well as the core of the company’s SDV platform ecology. It will not be sold to the outside. After the sale, Huawei BU business cannot achieve business closed loop.Thirdly, from the perspective of Volkswagen, the acquisition of domestic autonomous driving, especially huawei’s business, will face regulatory risks. Meanwhile, Volkswagen has been deeply bound to Argo AI and its self-built autonomous driving team strategically, and there are problems of business coordination and integration in seeking acquisition of domestic technologies.On the other hand, in addition to some differences in price reported by some media, even if an agreement can be reached, considering the size of the two companies and the possible impact on the subsequent market, the transaction is expected to be complicated, time-consuming and not feasible. On the contrary, the joint venture is more feasible.After all, for a foreign car company like Volkswagen, there are many ways to focus on the Chinese market, not just buying.