- Volkswagen AG's (OTC:VWAGY) software unit Cariad will take a 60% stake in a new venture with Chinese technology firm Horizon Robotics for over $2 billion.
- The German carmaker will invest $1 billion in Horizon Robotics and €1.3 billion in the joint venture.
- The companies will develop technology that can integrate numerous functions for autonomous driving onto a single chip that will be available only in China.
- The venture will mean Volkswagen has a supplier in each significant region, Reuters reported, given its existing supply relationships with Qualcomm Inc (NASDAQ: QCOM) and STMicrolectronics NV (NYSE: STM).
- Cariad will play an active role in developing the chip technology with Horizon Robotics. The know-how will be shared across the Volkswagen Group, said Ralf Brandstaetter, Volkswagen China's chief.
- "That's why this cooperation with Horizon Robotics is deeper," he added.
- Horizon Robotics' investors include carmakers like BYD (OTC: BYDDF) (OTC: BYDDY), Great Wall Motors, and Intel Corporation (NASDAQ: INTC).
- It is part of a broader push by Volkswagen to strengthen its software offering in the Chinese electric vehicle market, where it lags competitors - BYD and Tesla Inc (NASDAQ: TSLA).
- The transaction will complete in the first half of 2023.
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