Volkswagen is investing 2.4 billion euros in a joint venture with Chinese company Horizon Robotics. The deal will close in the first half of 2023, and will give the German automaker a 60% stake in the company.
The investment will be made through Volkswagen’s software subsidiary, Cariad, and will include 1.3 billion euros for Horizon Robotics, and other 1 billion euros for the joint venture.
The deal is subject to regulatory approval. However, Cariad and Horizon Robotics will develop advanced driver assistance systems (ADAS) for VW vehicles. A single chip will power all the functions, as reported by CNEVPost.
Horizon Robotics specializes in computing solutions for smart Chinese vehicles. It was founded in 2015 and backed by Intel, BYD, and Hillhouse Capital.
It has sold more than one million processors, supplying more than 20 car makers.
Describing the new venture, Ralf Brandstatter, a member of the Volkswagen AG management board for China, said, “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. 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.”
Chips have become integral to cars. Shortages have caused a loss of production for multiple companies.