Huawei attracts more automakers as ambitions become clearer

SHANGHAI – Huawei Technologies, the Chinese consumer electronics giant long suspected of wanting to become a car manufacturer, is making it clear it has no intention to do so. 

With greater transparency, the technology giant is winning more customers among domestic automakers as a key supplier for smart, electrified vehicles. 

Speculation about Huawei’s aspirations emerged after the company announced plans to enter the auto industry at the Shanghai auto show in 2019.

Huawei signaled it was not content to act as a traditional parts supplier. 

Huawei used the show to declare it intended to “help automakers develop good vehicles” and “help automakers achieve good sales."

That is exactly what Huawei has accomplished with its first automotive client – Sokon Industry Group Co., a little-known light-vehicle maker from the southwest China municipality of Chonqing. 

Huawei supplied electric motors, electronic control units, infotainment systems, smart cockpit and driver-assist systems to Sokon, which was later renamed Seres Group Co., to help it develop range-extended electric vehicles. 

In addition, Huawei created a new brand, Aito, for Seres’ range-extended EVs, and marketed the vehicles at its flagship mobile phone stores across China. 

Backed by Huawei’s technology and marketing resources, Aito has developed and markets three crossovers priced from 249,800 yuan ($35,191) to $80,271.  

Aito, with sales topping 220,000 in the first seven months of the year, has become a major player in the Chinese market for premium electrified vehicles.

Huawei’s comprehensive support for Aito has prompted automakers and analysts to suggest Huawei was using Seres as a contract manufacturer to grow Aito.

To clear any suspicions, Huawei has taken two important steps in recent months. 

On July 2, it transferred the patent rights for Aito brand to Seres for $352 million.

To create further distance, Huawei also spun off its auto business into a separate company named Yinwang Intelligent Technology Co., and invited automakers to become shareholders. 
 
Avatr Technology Co., the EV subsidiary of Changan Automobile Co. -- a major government-owned automaker, signed a deal Aug. 20 with Huawei to purchase a 10 percent stake in Yinwang for $1.6 billion.  

On Aug. 25, Seres announced it would purchase a 10 percent stake in Yinwang for the same price. 

BYD Co., China’s largest EV manufacturer, also signed an agreement with Huawei on Aug. 27 to adopt the technology giant’s intelligent driving system in its off-road vehicles. 

A slew of other Chinese automakers, including Dongfeng Motor Group, BAIC Motor Co., Chery Automobile Co. and Jianghuai Automobile Co., are expected to become shareholders of Yinwang or strike new deals with Huawei to develop intelligent vehicles, enabling the company to quickly expand its presence in the domestic auto industry.