Volkswagen joins hands with Horizon to counterattack Tesla?

Software and hardware, everyone wants to make up for it.

The autonomous driving industry is once again experiencing big news.

On the evening of the 14th, CARIAD, a software company under the Volkswagen Group, announced an investment of 2.4 billion euros (approximately RMB 16.8 billion) to establish a joint venture with domestic autonomous driving chip star startup Horizon.

It is reported that the transaction will be completed in the first half of 2023. CARIAD will hold 60% of the shares, while Horizon’s shareholding ratio has not been disclosed.

Judging from the company's attributes, the former is a software company that the public has high hopes for, and the latter is a popular domestic intelligent driving chip company. This powerful alliance is destined to become a "blockbuster" in the industry.

Holding hands with the horizon, professional counterpart

One day before the official announcement between Volkswagen and Horizon, German Manager magazine had already exposed the news of the cooperation between the two parties in advance.

But judging from the specific content, the actual cooperation details are far richer than what was revealed.

First of all, the investment amount has been increased from 2 billion euros to 2.4 billion euros, which is enough to show the firm determination of the Volkswagen Group to bet on this cooperation.

Secondly, the joint venture is not a software company as reported, but a full-stack intelligent driving solutions company that “combines software and hardware” with a wider business scope.

Finally, the main body of the cooperation has changed from the Volkswagen Group itself to the Chinese subsidiary of CARIAD, which also means that both parties will deepen localization construction.

As can be seen from the press release, the specific content of the cooperation between the two parties mainly focuses on full-stack advanced driving assistance systems and autonomous driving solutions - by integrating multiple functions on a single chip, thereby improving system stability, saving costs and Reduce energy consumption. This can be described as a "professional counterpart" for Horizon, which is engaged in the development of smart chips.

Up to now, Horizon's automotive-grade AI chip product journey series has launched version 5.0. Its biggest feature is that it maintains high computing power while still achieving low cost and low power consumption.

According to test data from professional institutions, when compared with the first-tier Nvidia Orin /80W).

It is true that Journey 5 benefits from the advantages of chip technology, but its excellent tuning at the software level is equally important.

In addition to its hardware capabilities, Horizon has also made great achievements at the algorithm level in recent years, including the single-front-view ADAS solution Mono, the intelligent driving solution Pilot based on large computing power chips, as well as the self-developed computing platform Matrix and the AI ​​development platform Tiangong Kaiwu. ,etc.

It is precisely because of its complete technological accumulation that Horizon has received a large number of orders and investments from car companies.

Perhaps this is also an important reason why Horizon can attract the public.

Of course, the other party in this cooperation, CARIAD, is also a powerful automotive software company.

As an important part of the Volkswagen Group's 2030 strategy, CARIAD assumes the important task of "software-defined cars" and is responsible for the entire group's intelligent software development plan.

It is worth mentioning that CARIAD has many branches around the world. For example, the European headquarters is responsible for the overall situation, the U.S. branch cooperates with Microsoft to develop cloud services, and CARIAD China researches mobile travel business and related applications, which complements Horizon relation.

Overall, the cooperation between CARIAD China and Horizon is the best example of "1+1>2".

Volkswagen’s “software nightmare”

As one of the first car companies to bet on software development, the Volkswagen Group established a department called Car.Software as early as 2020 and invested a budget of more than 7 billion euros. Later, the department became independent as CARIAD, its software budget also increased to 27 billion euros, and branches were established everywhere, of which the Chinese subsidiary was an important part.

Since the Volkswagen Group has invested so much in software research and development and has a professional subsidiary like CARIAD, why does it still spend huge sums of money to join hands with Horizon?

Ultimately, CARIAD is too crotch-stretching.

From a software perspective alone, Volkswagen's vehicle computer system has been widely criticized. From the milestone product ID.4 to ID.6, complaints about Volkswagen's vehicle computer system have been appearing on social media. The main problems are that the system is lagging, the central control screen is too small, and the intelligence is not as good as that of new domestic brands.

Not long ago, a piece of news about an "ID.6 pop-up advertisement" caused a heated discussion on the Internet. Anyone can imagine that an advertisement that takes up half the screen suddenly pops up while driving. One hundred percent how dangerous the situation is to distract a driver. It can range from operational errors to serious accidents.

If the phenomenon of "car-machine pop-up ads" has been reported by other brands, then the slow development of car-machine systems has led to delays in new cars, and it probably only appears in Volkswagen.

At the beginning of the establishment of Car.Software, Volkswagen hoped to create a completely independent in-vehicle operating system VW.OS, and apply its different versions to all group car brands in the future. The first model to be equipped with it is the ID.3.

However, as it approaches the launch, the VW.OS project is still in a semi-finished state, which results in the first batch of ID.3s leaving the factory becoming "bare metal" because they do not carry the necessary software to run.

The incident was described as an "absolute disaster" within Volkswagen.

Since then, Diess, then CEO of Volkswagen, further increased investment in software and even made CARIAD independent to avoid interference from forces within the Volkswagen Group.

But to this day, the construction of Volkswagen's software platform still lags behind the hardware level. Electric vehicles of sub-brands such as Audi, Bentley, Porsche, etc. have been delayed due to the development progress of the PPE architecture.

In addition to the software platform, Volkswagen also lags behind its competitors in terms of autonomous driving. Not only does it have no clue about L4 autonomous driving, but even L2 autonomous driving technology is unsatisfactory. It has already joined hands with Bosch to develop autonomous driving.

It should be obvious from here that Volkswagen has realized that going it alone at the software level will not work. Therefore, it established CARIAD's Chinese subsidiary, released its China strategy, and then joined hands with Horizon, all in the hope of solving automotive software problems in a new way. question.

Judging from Volkswagen's current situation, China has become Volkswagen's most important market outside of Europe, including not only the sales brought by North and South Volkswagen, but also the pressure brought by new domestic forces on this traditional car company, making it one of the first batch to embrace electrification. of traditional car companies.

It is worth mentioning that in the speech of Volkswagen's new CEO Obermu, he listed 10 major things that he should focus on after taking office. Among them, operating the Chinese market well ranked third, which is enough to show that the new CEO attaches great importance to the Chinese market. This also reflects from the side that cooperation with the Chinese company Horizon has been actively advancing.

It is also worth mentioning that among these 10 major events, the North American market ranks fourth.

After solving the software problem, will Volkswagen’s next goal be to surpass Tesla?

The ideal is plump, the reality is skinny?

After talking about the advantages of cooperation between the two parties, it is natural to also see the problems behind it.

Judging from the details released so far, it is not as perfect as imagined.

First of all, it is the Volkswagen Group’s own problem.

According to the press release of this cooperation, the establishment of this joint venture means that subsequent pure electric models of Volkswagen's three joint ventures in China (FAW-Volkswagen, SAIC-Volkswagen, and Volkswagen Anhui) will use Horizon's intelligent driving software and chip solutions. , which means that the localization of domestic Volkswagen is one step closer. In addition, judging from the attributes of the CARIAD China team, it is a completely localized team, and the cooperation with Horizon has brought together outstanding domestic talents.

However, the news did not mention much about the software systems of Volkswagen and other sub-brands produced in Europe.

Will we continue to use products from CARIAD headquarters? Or will the products of CARIAD China Branch be fully rolled out? Further explanation remains to be seen in follow-up news.

Secondly, as mentioned earlier, the cooperation between CARIAD China and Horizon mainly focuses on full-stack advanced driving assistance systems and autonomous driving solutions. However, it is also unclear whether the new company will participate in the underlying architecture of Volkswagen's next-generation version 2.0 software platform. news.

Judging from the information released by Volkswagen's 2030 strategy, Volkswagen will deliver the entire "software-defined car" to CARIAD, and the SSP architecture involved behind it involves more supply chain links, and Volkswagen needs to coordinate more departments to solve it together.