The rumor that Huawei is considering having electric cars built under its own brand has now been officially confirmed. As Huawei CEO Eric Xu told analysts, Huawei wants to invest US $ 1 billion in research into technologies for automated electric cars.
For the equivalent of 840 million euros, the tech group does not only want to develop the vehicles itself, it also wants to build them. To manufacture the cars, which will be marketed under the Huawei sub-brand, the electronics giant wants to cooperate with three Chinese manufacturers, BAIC, Changan and GAC.
According to BloomburgOne of Huawei’s three rotating CEOs Eric Xu told analysts in Shenzhen on Monday that the Chinese telecommunications giant would initially partner with the three automakers to make self-driving cars bearing the Huawei name as a sub-brand. “The smart car business unit receives one of Huawei’s heaviest investments. We will invest more than $ 1 billion in the development of automotive components this year, ”Xu told analysts.
Huawei is clearly confident when it comes to automated driving functions. CEO Eric Xu said their company has already overtaken Tesla in some areas. “I don’t know if they were bragging, but my team said they could drive cars alone without human intervention for 1,000 kilometers,” Xu said. “It’s much better than Tesla.”
Huawei considers China to be its main sales market. “China adds 30 million cars every year and the number is increasing,” Xu said. “Even if we don’t tap the market outside of China, if we can earn an average of 10,000 yuan for every car sold in China, that’s already a very big deal for Huawei.” 10,000 yuan is equivalent to 1,278 euros.
Huawei has made it big with smartphones, but it’s not entirely new to the auto industry. Mercedes-Benz is leveraging certain Huawei infotainment functions in China, and Huawei is developing autonomous driving functions with BAIC subsidiary, BluePark. The first model of this partnership, the Arcfox αS HBT, will be presented at Auto Shanghai next week. Huawei also unveiled an electric motor for electric cars last year, which will be used for the first time in the Seres SF5.
Huawei’s electric car plans were already audible in February as rumors and subsequent denial of electric car plans by Chinese tech giant colleague Xiaomi hit the media. At the end of March, Xiaomi confirmed that it did in fact (along with US tech giant Apple, for example) intend to enter the electric car business. Now Huawei is also taking action.
In the case of the two Chinese companies, restrictions on their mobile phone technology in the United States under the Trump administration forced them to consider other areas of expansion. These restrictions on US markets were not initiated by the Biden administration. Billionaire Huawei founder Ren Zhengfei took the opportunity to redirect the company’s expansion efforts towards the burgeoning fields of smart agriculture, healthcare and electric cars. The Chinese company is aiming for a seat at the table with tech giants vying for the realms of homes, workplaces and connected vehicles.