Volkswagen Group is in talks with Huawei about acquiring an autonomous driving unit, a German business magazine reported.

Manager Magazin said, citing insider sources, that VW executives have been discussing the sale for several months, which involves technology systems in which VW is not yet skilled.

Last year, Wang Jun, a senior executive at Huawei's smart vehicle unit, stated that the company plans to achieve driverless automobile technology by 2025.

VW CEO Herbert Diess said on Wednesday that he anticipates widespread autonomous driving in the automotive industry within 25 years and that the business is pursuing new collaborations to boost its software self-sufficiency.

Automakers and technology companies are investing billions of dollars in self-driving cars, hoping to be first in what many see as the future of mobility.

VW announced in September that it is constructing a new electric vehicle (EV) battery system factory in Hefei, eastern China, with intentions to begin production in 2023.

Under the Volkswagen Anhui joint venture, Volkswagen maintains an electric car production plant in Hefei, the capital of the Chinese province of Anhui. In the near future, a new component plant called VW Anhui Components Company will be built to assemble battery systems.

Volkswagen Anhui is the first Chinese joint venture manufacturing all-electric vehicles in which Volkswagen owns a controlling stake. For the first time, the Volkswagen Group becomes the sole owner of a battery system plant in China with the acquisition of the VW Anhui Components Company.

By 2025, Volkswagen plans to invest more than 140 million euros ($164 million) in the battery facility. The factory's initial capacity for local EV production will be 150,000 to 180,000 battery systems per year.

In 2021, VW launched five ID. series electric cars in China, the world's largest car market. It sold approximately 7,000 such vehicles there last month and expects to deliver 80,000 to 100,000 units this year.

VWis also reportedly in talks to increase its grip on the Hefei venture, which has generated issues with its other Chinese partners, who are concerned about being sidelined.

The new battery system plant will work closely with the Group's existing battery factories as well as the operations in Braunschweig and Tianjin, China.

In addition to the Anhui plant, battery manufacturing capacity is currently being built in Mlada Boleslav, Czech Republic, and Chattanooga, Tennessee. According to an accompanying statement, the Volkswagen Group's ambition is to "to be able to produce over one million battery systems annually within a few years."