Volkswagen Group plans to invest €2.4 billion ($2.34 billion) in a Chinese joint venture between its software subsidiary CARIAD and Horizon Robotics, Kallanish reports.

The transaction, expected to be complete in H1 2023, aims to accelerate regional development of advanced driver assistance system (ADAS) and autonomous driving (AD) systems for the Chinese market, described by Volkswagen as its “most important market worldwide.”

The companies intend to develop a full stack ADAS/AD solution to integrate numerous functions on one chip. This software/hardware integration is set to increase system stability, save costs, and reduce energy consumption. These “cost-efficient” solutions will be used in the group’s BEV models in China.

“Teaming up with Horizon Robotics will allow Volkswagen to accelerate the development of automated driving solutions as part of our NEW AUTO strategy and drive the repositioning of our China business,” comments Ralf Brandstätter, member of VW AG China’s management board.

Horizon Robotics’ ceo Kai Yu adds: “As one of the leading companies to commercialise and mass produce computing solutions for autonomous driving in China, we will bring in our expertise to the partnership with CARIAD to develop next-generation technologies for smart vehicle users.”

The JV will be 60% owned by CARIAD.