Stroll into a Huawei Technologies Co. store in Shanghai or Shenzhen, and apart from the usual array of smartphones, laptops and tablets, shoppers can check out a 250,000 yuan ($34,300) electric sport utility vehicle.
The Chinese tech giant is diversifying with EVs after landing at the center of US-China trade tensions, having its access to advanced semiconductors cut off and its 5G network equipment banned in several Western countries because of national security concerns.
Rather than build its own cars, Huawei has said it wants to be an auto supplier specializing in technologies like car operating systems and assisted driving — key growth opportunities as vehicles become increasingly tech-laden.
Huawei has already partnered with at least five automakers to launch electric cars. The Aito M7 SUV made in partnership with Seres Group Co. has been an instant success, with 80,000 orders taken in the first 50 days. Two more EVs with Huawei technology hit the market last week: the Avatr 12 luxury coupe manufactured by Chongqing Changan Automobile Co., and the Luxeed S7 sedan made by Chery Automobile Co.
The companies all promote Huawei-powered advance assisted-driving features, such as highway cruise control, and an intelligent cockpit that can be controlled by voice commands.
The Aito brand has benefitted from its close association with Huawei, with the tech company displaying the cars in its stores. Many Chinese consumers buy Huawei products like its latest Mate 60 smartphone — which contains a Chinese-made 5G chip — as a way of showing patriotic pride in a domestic champion.
“Aito’s popularity is probably 50% nationalism and 50% pretty good tech,” said Daniel Kollar, head of automotive and supply chain at consultancy Intralink.
It remains to be seen whether the brand can sustain this initial momentum over the long term in a market filled with more than 100 competitors and hundreds of models.
Avatr will be looking for a similar boost from its association with Huawei. The brand, which runs its own dealership network, has seen only 12,000 vehicle registrations in the 12 months ended September, according to data from the China Automotive Technology and Research Center, ranking it well down the list of Chinese EV makers. The Avatr 12 is priced at 300,800 yuan and comes with Huawei’s ADS 2.0 intelligent driving system, powered by 29 sensors, including 11 high-definition cameras.
Huawei’s multi-partner strategy is also a way of spreading its bets in China’s rapidly consolidating EV market. Companies like WM Motor and China Evergrande Group’s EV unit are on the brink and have either filed for restructuring or suspended trading. Others are merging to pool resources and technologies. Volkswagen AG and its Audi division have struck deals with EV makers Xpeng Inc. and IM Motors to gain access to their technology, and Stellantis NV invested $1.1 billion to take a 21% stake in Hangzhou-based EV upstart Zhejiang Leapmotor Technology Ltd.
“Huawei wants to get its tech into as many platforms as possible so that when the market eventually consolidates, it is partnering with as many survivors as possible,” Kollar said. He believes the firm will want to get into the direct manufacturing business someday, but won’t make that decision until the market starts to trim the fat.
Other tech companies that want in on making EVs have been delayed by tightened regulatory approvals. Huawei’s strategy of partnering with automakers rather than going it alone has put it ahead of rival Xiaomi Corp., which is exploring options as it awaits Beijing’s nod to produce its own electric cars. Didi Global Inc. has walked away from its EV ambitions, selling its smart car development arm to Xpeng in August.
Huawei’s success with Aito is threatening other players in China’s EV market, prompting them to question its reliability. For example, He Xiaopeng, the founder of Xpeng — which has been racking up larger-than-expected losses as it struggles to lift sales — last week questioned whether Aito’s automatic emergency braking is mature enough to roll out across the country.
The company said in September that it plans make its 2.0 assisted driving system available across China by the end of the year.
Chen Hong, the chairman of SAIC Motor Corp., one of China’s largest automakers, has said that if his company worked with Huawei and used its technology, it would be like handing over the control and “soul” of the car.
The Shenzhen-based tech giant doesn’t agree, saying it wants to lend a hand to automakers and help them survive the consolidation.
“In the age of the smart car, competition will be even more fierce,’’ Richard Yu, the chairman of Huawei’s car business unit, said at an event in June. “Over the long term, I believe manufacturers that closely work together with Huawei can live on and become one of the few survivors.”