Volkswagen AG is close to reaching a joint venture deal with Chinese autonomous driving startup Horizon Robotics Inc. that could see the auto giant make an investment of about $1 billion, according to a person familiar with the situation.
(Bloomberg) — Volkswagen AG is close to reaching a joint venture deal with Chinese autonomous driving startup Horizon Robotics Inc.
that could see the auto giant make an investment of about $1 billion, according to a person familiar with the situation.
Talks between the two parties are at an advanced stage, the person said, asking not to be named because the discussions are private.
The venture will focus on developing autonomous driving technologies and wireless connectivity software for VW vehicles, the person said.
Germany’s Manager Magazin earlier reported some of the details of the deal, saying it could be announced within days.
VW said it’s planning to significantly expand development skills in China, particularly in digital innovations, according to a statement, while declining to comment on a deal with Horizon.
The chipmaker, backed by investors including Intel Corp., Hillhouse Capital and electric-vehicle maker BYD Co., has been looking at raising as much as $200 million ahead of a possible share sale in Hong Kong this year, Bloomberg News reported in August.
A spokeswoman for Horizon declined to comment.
Horizon’s technology can be installed in everything from cars to smart speakers, and already counts Volkswagen’s Audi among its partners, according to its website.
Volkswagen is seeking to accelerate improvements in its software capabilities, including connectivity and ensuring access to high-tech chips.
Struggles at the company’s Cariad software unit resulting in model delays and buggy functions earlier this year prompted VW to appoint new Chief Executive Officer Oliver Blume to replace Herbert Diess.
The German carmaker is also partnering with Robert Bosch GmbH to develop a common software platform to bring automated driving technologies to its vehicles.
The automaker has a budget of €89 billion ($86 billion) for EV and software development over the next half decade and is also investing $2.6 billion in Ford Motor Co.-backed driverless tech startup Argo AI.
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