Volkswagen Is Rumored To Be Planning a $1 Billion Software Joint Venture In China

Software may play a pivotal role in the future success of automakers like Volkswagen Group and others that aim to surpass Tesla. China is the largest automotive market in the world, and EVs are already pretty popular there, thus recent reports claim that VW is already working on a joint venture relating to EV software there.

Ex-VW Group CEO Herbert Diess, who seems to get along well with Tesla CEO Elon Musk, has stated multiple times how impressed he is with Tesla and how obvious it is what VW (and others) must do to attract more EV purchasers.

It is arguable that Volkswagen Group, together with the Big Three manufacturers like Ford and GM, has the capacity to manufacture more electric vehicles than Tesla. These corporations have assembly plants all around the world and have been making automobiles for decades with great success. The Volkswagen Group houses a plethora of well-known labels, which should serve as an additional boon.

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Volkswagen is just one of many established automakers that have shown it can successfully manufacture and market enticing electric vehicles. Of course, Tesla isn’t simply a manufacturer; it’s so much more than that. Tesla, in contrast to historical automakers who place most of their concentration on production, is mostly software and renewable energy firm that has found great success in selling cars, increasing margins tremendously, and generating huge profits.

In a perfect world, any automaker could copy Tesla’s success, but others have shown that this is easier said than done. However, investing in R&D with a major emphasis on software may prove to be crucial in assisting global automakers in successfully navigating the transition to EVs and providing genuine competition to Tesla.

Volkswagen Joint Venture In China
Volkswagen Joint Venture In China

To sum up, credible information suggests that Volkswagen Group is planning to establish a software manufacturing joint venture in China. No big surprise there, considering VW’s extensive involvement in Chinese joint ventures with companies like JAC, SAIC, and FAW.

It’s possible that the total cost of this project could reach close to a billion dollars. According to the sources, the manufacturer will make the announcement officially next week. VW, meanwhile, declined to comment when approached about the scandal. In addition, none of its present Chinese partners were willing to speak.

As it stands, China accounts for roughly 40% of VW’s global sales and 50% of its global profits. In addition, the automobile group is already substantially invested in China’s research and development of new car technology, as the country is often seen as being ahead of the current technological curve in comparison to the United States and Europe.

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