Volkswagen China Responds to Talks with Huawei Over the Use of Its Software

Volkswagen has held talks with Huawei, hoping to use Huawei software in its car in China, according to a May 17 report by the Financial Times. In response to this, a Volkswagen China spokesperson told BeijingNews that there is no official news.

According to the report from the Financial Times, Volkswagen and Huawei have held talks to discuss using Huawei’s software on cars sold in the Chinese market, hoping to gain a larger share of China’s electric vehicle market. Volkswagen has also held similar negotiations with several other Chinese companies.

In 2020, Volkswagen established its own software department called CARIAD. However, since its establishment, it has been plagued by various problems including budget overruns and delays, which have hindered the launch of new electric vehicles such as the Audi Q6e-tron and Porsche Macan. Recently, most of the senior executives at CARIAD were dismissed and only the personnel director remains in the department.

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The rumors of a partnership between Volkswagen and Huawei began in early 2022 when German media reported that Volkswagen was interested in acquiring Huawei’s autonomous driving division. However, as early as July 2021, Huawei officially announced that it had reached a patent licensing agreement with a supplier of Volkswagen and stated that this was the largest license agreement Huawei had achieved in the automotive field.

In October 2021, there were reports that Huawei plans to form a joint venture with Volkswagen to develop autonomous driving technology. One of the discussed ways of cooperation is for Volkswagen to invest and become the controlling shareholder of the joint venture, while Huawei mainly provides technical IP (intellectual property). The technical IP provided by Huawei includes not only software technologies such as autonomous driving but also chip-related IPs.

Regarding the joint venture between Huawei and Volkswagen to establish an autonomous driving company, Stephan Wöllenstein, CEO of Volkswagen China, stated that both companies were indeed in discussions but there was no confirmed news. Subsequently, there was no progress in cooperation between the two companies. Instead, Volkswagen’s software subsidiary CARIAD successively reached cooperation agreements with Horizon Robotics and Thundersoft and established a joint venture.