German automaker Volkswagen is accelerating its autonomous driving strategy in China by strengthening its partnership with Chinese artificial intelligence company Horizon Robotics, as competition in the world's largest electric vehicle market continues to intensify.
The company said its China-based automated driving unit, CARIZON, will deepen its collaboration with Horizon Robotics to speed up the development of advanced self-driving technologies for future vehicles. The partnership is expected to support Volkswagen's efforts to expand its presence in China's rapidly evolving smart mobility market.
Volkswagen plans to introduce its first Level 3 autonomous driving vehicles in China by 2027. These vehicles will allow drivers to hand over control to the car under specific driving conditions, such as on highways, while remaining available to take over if required.
The automaker also confirmed that deliveries of its Level 3-equipped vehicles are expected to begin in the second half of 2027.
Before that, Volkswagen will launch vehicles equipped with Level 2++ assisted driving technology later this year in China. The system is designed for urban driving and will be capable of handling traffic lights, stop signs, roundabouts and automated turning functions while requiring driver supervision.
The company said Horizon Robotics' artificial intelligence technology will play a key role in developing the next generation of Volkswagen's autonomous driving systems.
Volkswagen Chief Executive Officer Oliver Blume said the move is intended to strengthen the company's competitiveness in China while creating opportunities to expand advanced driving technologies into selected international markets.
The German automaker is also working with Chinese electric vehicle manufacturer Xpeng to develop a new electronic architecture for vehicles produced in China. The platform is expected to support AI-powered driving functions and could eventually be introduced in markets across Central and Southeast Asia as well as the Middle East.
China has become one of the world's most competitive markets for autonomous driving technology, with several domestic companies rapidly expanding driver-assistance systems and robotaxi services. Chinese manufacturers have also accelerated the commercial rollout of advanced autonomous features, increasing pressure on global automakers.
Volkswagen's latest investment comes as European carmakers continue to face slowing sales, rising competition from Chinese electric vehicle manufacturers and changing market conditions.
German automotive brands, including Volkswagen, Mercedes-Benz, BMW and Audi, have also faced increasing pressure following changes in China's industrial policies and growing competition from local EV manufacturers offering advanced technology at competitive prices.
Volkswagen has additionally been undergoing a broader restructuring programme in Europe as it works to improve efficiency and adapt to the changing global automotive landscape.
Industry analysts say the company's renewed focus on autonomous driving technology reflects the growing importance of artificial intelligence and software in determining the future competitiveness of global automakers.
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