Volkswagen is spending approximately $2.35 billion to acquire a 60 per cent stake in China’s Horizon Robotics.

A joint venture will be formed between VW’s CARIAD software division and Horizon Robotics with the aim of accelerating the regional development of Advanced Driver Assistance System (ADAS) and Autonomous Driving systems for the Chinese market.

The transaction is expected to be completed in the first half of 2023 and CARIAD and Horizon Robotics will develop advanced driver-assistance and autonomous systems onto a single chip, increasing the stability of the system, saving costs, and reducing energy consumption.

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Reuters notes that CARIAD will play an active role in developing this innovative new chip technology with Horizon Robotics and that the know-how will be shared across the entire Volkswagen Group.

“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,” member of the management board of Volkswagen AG for China, Ralf Brandstätter said. “Localized technology development grants the region more autonomy to further expand its position in the dynamic automotive market. 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.”

Horizon Robotics already supplies the likes of BYD, Audi, Continental, Li Auto, and SAIC with its products. It has also received investments from BYD, Great Wall Motors, and Intel.

“Horizon Robotics is committed to empowering smart vehicles through integrated computing solutions with the mission to make human life safer and better,” Human Horizons founder and chief executive Dr. Kai Yu added. “As one of the leading companies to commercialize and mass produce computing solutions of autonomous driving in China, we will bring in our expertise to the partnership with CARIAD to develop next-generation technologies for smart vehicle users. We believe our integrated software and hardware solutions will continue to position Horizon Robotics as a partner of choice for international auto makers in China.”