Volkswagen has partnered with Ecarx to manufacture smart vehicles in Brazil and India, utilizing Ecarx’s advanced Antora 1000 digital cockpit system. The collaboration may extend to VW’s Skoda models in Europe, while discussions are underway for potential entry into the U.S. market. Ecarx aims to reduce reliance on Geely for revenue and enhance its international presence by 2030. This move reflects Western automakers’ increasing interest in Chinese smart driving technologies amid changing industry dynamics.
Volkswagen Partners with Ecarx for Smart Car Production
Volkswagen has established a collaboration with Ecarx, a company supported by Geely’s president, Eric Li, to produce innovative smart vehicles in Brazil and India. This partnership focuses on integrating Ecarx’s state-of-the-art Antora 1000 digital cockpit system, which features proprietary chips and software that enable advanced services, including voice recognition and navigation.
Expanding Horizons: Potential Growth in Europe and Beyond
According to Ecarx CEO Shen Ziyu, the partnership is now exploring opportunities to include VW’s Skoda vehicles in the European market. In response to inquiries about Ecarx products reaching the United States, Mr. Shen noted that discussions are ongoing, although the current agreement with VW does not encompass that region. He emphasized that there have been conversations on how to penetrate the U.S. market, mentioning that Ecarx products are already available in Volvo and Lotus vehicles, both of which are under Geely’s umbrella.
In a recent statement, Ecarx clarified that Mr. Shen’s remarks pertained to internal deliberations regarding the technical viability of entering global markets, rather than the specific partnership with Volkswagen. Attempts to get comments from VW and Skoda were met with silence.
This initiative highlights the increasing trend among Western automakers to tap into Chinese expertise in smart driving technologies, particularly following a significant drop in sales in China. Traditional car manufacturers are now facing stiff competition from Chinese electric vehicle companies that are reshaping the industry with their stylish and software-rich offerings. Notably, Mercedes-Benz is also planning to develop smart driving vehicles for international markets, incorporating lidar sensors from the Chinese firm Hesai—marking a significant milestone in using Chinese technology for models sold outside its borders.
Mr. Shen revealed that Volkswagen took over a year to select Ecarx as its smart technology supplier from a pool of 13 competitors, which included prominent South Korean firms like LG and Samsung, as well as the Chinese contender Desay SV. He noted that research and development for consumer electronics, particularly semiconductors, remains predominantly concentrated in Asia, which poses challenges to software development in Europe. Volkswagen’s internal software unit, Cariad, has faced hurdles, with plans to reduce its workforce by nearly 30% by year-end, as reported by the business daily Handelsblatt.
Currently, Ecarx relies on Geely and its affiliates for 70% of its revenue but aims to decrease this dependency to below 50% by 2028. Mr. Shen stated that by 2030, half of Ecarx’s revenue is expected to come from international markets, backed by enhanced research and development efforts abroad to mitigate concerns related to geopolitical risks tied to Chinese technologies.
“The fierce cost competition from China enables us to strengthen our supply chain and expand internationally,” Mr. Shen remarked. “The product cycle in China generally lasts around three years, while we can extend it to 10 or even 15 years in other markets.”