Is Huawei really selling its autonomous driving business?

Huawei is reported to be in talks with auto giant Volkswagen over the sale of its autonomous driving business.

Details are scarce, but the potential sale would be worth billions, Germany's Manager Magazin reported.

Huawei and Volkswagen have declined to comment on the story.

Figure 1: Audi, a Volkswagen brand, is already working on testing out Huawei's autonomous driving system (ADS) on vehicles in Shanghai.
(Source: Sipa US/Alamy Stock Photo)

Since Huawei's handset division collapsed under the weight of US sanctions, the auto sector has become one of its biggest new segments. It is slightly surprising to think that it may sell off one of the most important parts of this new business.

However, one factor in Huawei's thinking may be its difficulty in winning business outside China under the Huawei brand.

The governments that have excluded it from 5G – including the major auto markets in Japan, the US and the UK – are unlikely to permit Huawei's driving tech.

Going elsewhere

Some domestic Chinese reporting suggests Volkswagen and Huawei may be planning a JV with the auto firm as the senior partner and Huawei contributing some technology.

The China Star Market Daily quotes an industry insider as saying a JV is under consideration. Volkswagen China CEO Stephan Wöllenstein in January confirmed the two firms were in discussions, with a joint venture one possibility.

Audi, a Volkswagen brand, is already working on testing out Huawei's autonomous driving system (ADS) on vehicles in Shanghai.

Huawei has struck a number of deals with Chinese auto firms to supply its smart car technology.

Its most high-profile relationship is with little-known carmaker Sokon in which Huawei supplies its solutions and brings its sales and marketing clout.

The partnership has had an inauspicious start, with sales of the initial model well below expectations (see Huawei takes the wheel in auto partnership after first car flops).

Volkswagen in a central role

Volkswagen, Huawei's prospective new partner is with Toyota, one of the world's two biggest car-makers, last year shipping 8.9 million vehicles.

In an interview with Verge last month Volkswagen CEO Herbert Diess said the company was determined to play a central technology role in the autonomous driving era.

"We want to become able to really drive the car, because we think the big differentiator is – and the big step change in the industry is – are you able to take over the responsibility for driving the car? That makes a big difference."

He said Volkswagen had two autonomous driving projects. One is urban robotaxis, in which it is working with US startup Argos AI. The collaboration with Huawei appears to be related to the other project, involving private cars on open roads.

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Huawei's ADS is a point-to-point level 2 system, meaning it can drive from one designated destination to another but needs constant human supervision.

Huawei has more than 7,300 patent applications related to autonomous driving, covering areas such as image processing, V2X, human-computer interaction and communications.

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— Robert Clark, contributing editor, special to Light Reading