Volkswagen is in discussions with Ecarx, a digital cockpit system developer, to integrate the Chinese company's technologies into cars sold in developed markets, such as Europe. Ecarx's CEO mentioned that the partnership already involves producing smart cars in Brazil and India that feature Ecarx's Antora 1000 digital cockpit system, which offers services like voice recognition and navigation maps.
The collaboration is expected to expand to include VW's Skoda-branded cars in Europe as well. Ecarx CEO Shen Ziyu referred to the project as the "Global Entry Infotainment Platform," aimed at delivering intelligent cockpit systems in various markets.
While discussions regarding Ecarx products entering the U.S. have taken place, the current VW deal does not cover this scope. The focus remains on infotainment systems for internal combustion engine vehicles in Brazil and India, with potential future opportunities in other regions.
This move aligns with the trend among Western automakers to tap into Chinese smart-driving technologies to maintain their global market share amidst declining sales in China. Notably, Mercedes-Benz plans to incorporate Chinese firm Hesai's lidar sensors in its global smart-driving car lineup, marking a significant step for foreign automakers.
Shen emphasized the importance of Asian leadership in consumer electronics technologies, which influenced Volkswagen's decision to select Ecarx as the smart technology supplier over other competitors.
Ecarx, currently reliant on Geely for 70% of its revenue, aims to reduce this dependency below 50% by 2028 and expand its overseas revenue to constitute half of its total by 2030. This strategic shift also aims to mitigate concerns surrounding geopolitical risks associated with Chinese technologies.
Furthermore, the company's global expansion strategy is expected to leverage China's competitive cost environment to establish a robust supply chain that can withstand global market dynamics and offer extended product life cycles abroad.