The establishment of VCTC has enabled Volkswagen to shift its technology development and integration work from its headquarters in Germany to China, effectively enhancing Volkswagen’s research and development capabilities in China and shortening the development cycle by approximately 30%. At Volkswagen China and VCTC, Mr. Han Hongming’s main responsibility is to promote the localization of Volkswagen’s research and development and procurement, build technical teams, and integrate into China’s ecosystem.
As a joint venture between Volkswagen and Horizon, in CoolRuiCheng’s organizational structure, executives dispatched by Volkswagen play leading roles, while executives from Horizon play supporting roles. The Chairman and CEO of CoolRuiCheng are both appointed by Volkswagen, while Horizon’s founder Yu Kai serves as Vice Chairman, and co-founder Huang Chang serves as CTO. In addition, Qing Chang, CEO of CARIAD China, and Liming Chen, President of Horizon, also serve as directors.
According to information obtained by a new energy vehicle headhunting company, CoolRuiCheng had over 300 employees at its inception, including about 200 employees transferred from Horizon. Currently, the total number of employees in the company has exceeded 500. Volkswagen and Horizon jointly established CoolRuiCheng to leverage Horizon’s resources and experience in the field of intelligent driving to help Volkswagen achieve intelligent transformation. Horizon can provide car companies with a full range of intelligent driving solutions, including chips, underlying software, upper-layer application algorithms, and development toolchains.
According to Horizon’s prospectus, the headhunting company learned that Horizon had a 35.5% market share in the high-end intelligent driving market and a 21.3% market share in the low-end intelligent driving market in 2023. Volkswagen’s huge sales volume in China means a stable and high revenue source, which is also attractive to Horizon. Although CoolRuiCheng’s intelligent driving solutions have not yet been officially mass-produced, Horizon’s prospectus shows that CoolRuiCheng contributed 40% of Horizon’s revenue in 2023.
On April 24, 2023, Horizon released the new generation intelligent driving chip Journey 6, and CoolRuiCheng was one of the first designated partners. Journey 6 includes six versions, with computing power ranging from 10+ TOPS to 560 TOPS. Among them, Journey 6B is aimed at the low-end intelligent driving market, focusing on cost-effectiveness; Journey 6M and 6E are targeted at the mid-range intelligent driving market, supporting urban auxiliary driving and high-speed NOA functions respectively, with hardware system costs controlled at less than 5,000 yuan; Journey 6P is designed specifically for urban advanced intelligent driving, with hardware system costs close to 10,000 yuan.
According to insiders, CoolRuiCheng’s intelligent driving solutions for Volkswagen cover both low-end and high-end levels. Currently, the high-end intelligent driving solution is still in the planning stage, while progress on the L2+ level intelligent driving solution is relatively fast. CoolRuiCheng’s low-end intelligent driving solution includes six cameras and one millimeter-wave radar, but the designated partners have not yet been determined.
In November 2023, Qing Chang announced at the Import Expo that CoolRuiCheng plans to start mass production of L2+ and L2++ level intelligent assisted driving products in 2025 and 2026, and test vehicles are already available. Although Volkswagen has invested heavily in CoolRuiCheng, it has not placed all its chips on this company. In the future, CoolRuiCheng will compete with companies such as Xiaopeng Motors and DJI for Volkswagen’s orders.
In 2023, Volkswagen spent $700 million to acquire a 4.99% stake in Xiaopeng Motors. The two parties agreed to jointly develop two electric vehicles and reached a long-term cooperation technology framework agreement. Six months later, the two sides further announced that they would jointly develop platforms and software and jointly procure shared components. On April 17 this year, Volkswagen and Xiaopeng Motors announced that they would jointly develop the electronic and electrical architecture CEA, including regional controllers, central computing platforms, cloud platforms, and back-end interconnection functions. This architecture will be applied to electric vehicles produced by Volkswagen in China from 2026.
According to the agreement signed between Volkswagen and Xiaopeng Motors, the two parties will cooperate in electric vehicle platforms, software technology, supply chain, and intelligent driving technology. However, some believe that there may be competition between Xiaopeng Motors and CoolRuiCheng, as OEMs usually adopt redundant solutions and do not rely solely on one supplier.
In addition to Xiaopeng Motors, another type of competitor for CoolRuiCheng is first-tier suppliers, including DJI’s car-mounted products. In 2024, SAIC Volkswagen and FAW-Volkswagen announced that they would adopt DJI’s car-mounted intelligent driving solutions in some models of the new Tiguan and Magotan. These two models also appeared at Volkswagen’s booth at the Beijing Auto Show. For Volkswagen, with its large volume and diverse models, DJI’s cost-effective route for car-mounted products is attractive. DJI’s car-mounted product claims that its intelligent driving solution only requires seven cameras and a Qualcomm chip with 100 TOPS, and can achieve urban intelligent driving without relying on lidar, with hardware costs as low as 7,000 yuan. Moreover, this solution can also be applied to fuel vehicles.
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