Electrifying cars has made the vehicle industry exciting, with an increasing number of people making the switch. Carmakers are also rushing to cash in, and even Chinese technology giant Huawei is up in arms for a market share.
Huawei will invest over $1 billion in researching and developing self-driving and electric-car technologies. The massive investment will help the company expand its business and compete with the likes of Xiaomi – which announced plans to join the EV arena a fortnight ago – and America’s largest EV maker Tesla Inc(via Bloomberg).
“The smart car business unit receives one of the heaviest investments from Huawei. We will invest more than $1 billion in car component development this year,” Eric Xu, one of Huawei’s rotating chairman’s told Analysts Monday.
Xu claims that Huawei’s self-driving technology already surpasses Tesla’s in some faucets, one of the world’s best self-driving car technology. For example, Huawei’s autonomous driving technology can allow a car to navigate for more than 1,000 kilometers without human intervention, Xu noted.
For a start, Huawei will partner with three automakers to produce cars that carry the company’s name as a sub-brand. These Huawei-branded EVs will use Huawei’s autonomous driving technology.
According to Xu, the company’s priority seems to tap the local EV market, which is growing rapidly. Even without expanding internationally, the company could still make some good money by staying in its home country China, currently ranked as the world’s largest EV market.
“China adds 30 million cars each year, and the number is growing. Even if we don’t tap the market outside of China, if we can earn an average 10,000 yuan from each car sold in China, that’s already a very big business for Huawei.”
According to the China Association of Automobile Manufacturers (CAAM), sales of battery electric vehicles (BEV) and plug-in hybrids (PHEV) stood at 1 and 0.25 million respectively in 2020 – the highest in the world.
Huawei and the Future
Huawei’s business has been heavily affected by the US sanctions since May 2019, which has slowed down the company’s growth. Although the company has managed to survive to date, it has lost its smartphone glory and has begun pivoting to new growth areas. The company’s focus has turned to smart agriculture, health care, and electric cars.