Huawei accelerates smart car ambitions with invitation to four carmakers to invest in Changan joint venture

Huawei Technologies is inviting four additional carmaking partners to join its new smart car joint venture, which it started with Chinese state-owned carmaker Changan Automobile, as the US-sanctioned telecommunications equipment giant gears up for a major move in the electric vehicle (EV) industry.

Yu Chengdong, CEO of Huawei’s consumer business group and chairman of its Intelligent Automotive Solution business unit, called on Chinese carmakers Seres Group, Chery Automobile, JAC Motors and BAIC Motor to take an equity stake in the enterprise during the launch event for the Luxeed S7 sedan on Tuesday.

All four companies – generally considered smaller carmakers in the country – currently partner with Huawei to develop and sell new brands under the so-called Huawei Select model, through which the smartphone giant collaborates closely with companies on everything from product design to sales. These brands include Aito with Seres and Luxeed with Chery.

Huawei, state-owned carmaker form smart-vehicle joint venture

Yu also said the company welcomes bigger firms such as FAW Group, one of China’s top state-owned car manufacturers, to collaborate on smart vehicle solutions.

Under the deal inked on Sunday, Huawei said it plans to transfer the business of its smart-car system to the new unit, with Changan Automobile expected to hold up to 40 per cent of equity in the venture.

Employees at Huawei’s in-house car unit were offered compensation of one month’s pay for each year worked plus an extra month’s salary to transfer to the new entity, while being allowed to keep their Huawei stock and receive dividends, according to a report by Chinese media outlet Jiemian News on Tuesday. Huawei declined to comment on the report.

Seres revealed on Sunday that it received an invitation to invest in the new unit and is in active discussions. JAC also said it is in active discussions with Huawei.

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Aito, the Huawei-Seres brand, currently holds a tiny share as it faces increasing pressure in China’s rapidly evolving EV market amid fierce competition with Tesla and dozens of local brands including BYD and Li Auto.

“Huawei has gained huge attention in the EV industry, but the actual sales remain small and unstable with Aito’s delivery of less than 100,000 units last year,” said Zhang Xiang, who heads a research centre at the college Jiangxi New Energy Technology Institute.

With Changan as a stable client, the new joint venture will expand the clientele for Huawei’s smart car system and expand its revenue stream, Zhang added.

On Tuesday, Huawei launched the S7, its first electric sedan, jointly built with Chery under the Luxeed brand name, as a challenger to Tesla’s Model S. The vehicle starts at 249,800 yuan (US$35,000), and it had received 20,000 pre-orders by the time of the launch event, according to Huawei.

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