Volkswagen to rely on Qualcomm chips for autonomous driving: Report

German auto giant Volkswagen will rely on Qualcomm chips for its autonomous driving technology-enabled cars, reports Handelsblatt. The automaker has reportedly set up a years-long partnership with the US chip manufacturer Qualcomm to develop autonomous driving technology. The contract is set to run until 2031, claims the German publication in its report.

Volkswagen AG is claimed to use Qualcomm's system-on-a-chip (SoC), specifically developed for autonomous driving technology, across all brands around the world starting from 2026, revealed the report.

Volkswagen CEO Herbert Diess reportedly travelled to Qualcomm's headquarters in San Diego in mid-April this year, where the two companies agreed to the conditions of the deal. The report claims that this contract will cost Volkswagen around one billion euros.

The development comes at a time when the automaker along with several other auto manufacturers around the world has been facing difficulties in vehicle production, due to the ongoing prolonged supply chain disruption that started more than a year ago and intensified due to the current war between Russia and Ukraine. With both Russia and Ukraine being key players in the microchip industry, the war between these two countries has impacted the chip industry hard.

Several automakers including Volkswagen, Audi, Mercedes-Benz, BMW, Toyota, Nissan, Ford, and General Motors had to slow down their vehicle production pace. Several automakers had to announce temporary factory shutdowns as well. Apart from the production, the deliveries to consumers too are being impacted due to the crisis. Several automakers started manufacturing vehicles without key features that require chips.

Besides the chip crisis, several other factors too are denting the production and sales of vehicles around the world. These include a shortage of key raw materials, which are driving prices upward. Apart from that, rising costs of raw materials and increasing price of petrol and diesel too are impacting vehicle production.