Volkswagen China to Develop Own Autonomous Driving Chips

By Sherry Qin

Volkswagen's China arm is developing its own autonomous-driving chip as it looks to strengthen its position in the country's fiercely competitive market.

The in-house development is part of the Volkswagen's "In China, for China" strategy, the company said Wednesday.

By designing and developing its own system-on-chip, the company is taking control of a key technology that will "define the future of intelligent driving," Volkswagen Chairman Oliver Blume said in a statement.

The technology is a core part of advanced driver assistance systems and autonomous driving capacity that lets cars "think," or process data from cameras and sensors to better navigate roads, traffic, and driving behavior.

Volkswagen's aim is to create fully localized research-and-development ecosystem that spans chips, software, systems and vehicles.

Like other foreign brands, it is facing intense competition from local carmakers in China like BYD that offer cheap, high-quality models tailored to the domestic market.

Chinese EV heavwyeights like Nio and XPeng have both developed their own chips that power autonomous-driving features in some of their most popular vehicles.

Volkswagen's chips will be developed by a joint venture between Cariad, the carmaker's automotive-software arm, and Chinese smart driving firm Horizon Robotics.

Formed in 2023, the VW-Horizon collaboration, named Carizon, rolled out its first advanced driver-assistance solution last year, which will be integrated into Volkswagen vehicles in 2026.

Volkswagen said the new chips are set to be delivered within the next three to five years, and will be ready to power vehicles with Level 3 and above automated driving. That level of autonomy refers to cars that can independently make decisions such as accelerating past a slow-moving vehicle but still need a degree of human supervision.

Chinese companies are racing to roll out models with more advanced autonomous-driving capabilities. XPeng said in June that its newly launched G7 has Level 3 computing power while others have announced similar plans to launch cutting-edge driverless tech.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

November 05, 2025 01:34 ET (06:34 GMT)