Published by Global Banking and Finance Review
Posted on March 12, 2025
SHANGHAI (Reuters) -Volkswagen is in talks with digital cockpit system developer Ecarx to put the Chinese company's technologies in cars it sells in developed markets, such as Europe, Ecarx's CEO said on Wednesday.
Volkswagen already has a partnership with the firm, which is backed by Geely Chairman Eric Li, to manufacture smart cars in Brazil and India with Ecarx's digital cockpit system Antora 1000, which features its proprietary chip and software and offers services such as voice recognition and navigation maps.
The two companies are now looking to extend the partnership to include VW's Skoda-branded cars sold in Europe, Ecarx CEO Shen Ziyu told Reuters.
“The whole project is about the delivery of the hardware and software of the intelligent cockpit system, mainly in VW's Brazil factory for the Latin American market and its Indian factory for Indian market, and in the future in Europe, the Skoda market," Shen said. "Its name is Global Entry Infotainment Platform."
Asked whether Ecarx products had been delivered to the U.S., Shen said there had been discussions. “Under the current VW deal, they do not currently have this scope. But we have already discussed this and are discussing how to enter the U.S., this is under discussion," Shen said, adding Ecarx products have entered the U.S. in Volvo and Lotus cars. Both brands are owned by Geely. Ecarx followed up on Friday to say Shen was referring to the company's internal technical feasibility discussions of markets globally and not the Volkswagen partnership.
Skoda declined to comment.
A Volkswagen AG spokesperson said the company's cooperation with Ecarx was solely focussed on the delivery of an infotainment system for its internal combustion engine vehicles in Brazil and India, with no other technical scope.
"We do not comment on supplier selection or any contractual details. However, we can confirm that Volkswagen Group has entered a cooperation with Ecarx Inc.," the spokesperson said.
The plan underscores growing efforts by Western automakers to leverage Chinese prowess in smart-driving technologies to hold onto their global market share after sales declined sharply in China in recent years.
Nearly all legacy auto brands now have to contend with Chinese electric vehicle makers, which have upended the auto industry with sleek software-rich cars.
German luxury automaker Mercedes-Benz plans to develop smart-driving cars for global markets equipped with Chinese firm Hesai's lidar sensors, Reuters reported on Tuesday, the first time a foreign automaker has sought to use such Chinese-made technology for models sold outside China.
Shen said it took more than a year for Volkswagen to decide on the smart technology supplier among 13 other candidates that included South Korean brands, such as LG and Samsung, as well as Chinese rival Desay SV.
"The R&D for the entire technologies of consumer electronics, including semiconductors, is still rooted in Asia," Shen said. "That's the main reason why the progress of developing software capabilities in Europe is not smooth."
Volkswagen has had limited success so far with its in-house software unit Cariad, which plans to lay off almost 30% of staff by the end of the year, the Handelsblatt business daily reported on Tuesday, citing company sources.
Ecarx generates 70% of its revenue from Geely and its affiliated brands, and aims to lower its reliance on the Chinese group to below 50% by as early as 2028, Shen said.
Half its revenue would come from overseas by 2030, as Ecarx has been building its R&D teams abroad, a move Shen expects to help address concerns over geopolitical risks involving the use of Chinese technologies.
"China's brutal cost competition can hammer out a stronger supply chain for us to go global," Shen said. "The product cycle, which may only last three years in China, can be extended to 10 or even 15 years overseas."
(Reporting by Zhang Yan, Brenda Goh; Editing by Miyoung Kim, Sharon Singleton and William Mallard)
