China’s Huawei will spin off its intelligent automobile business unit into a Shenzhen Yinwang Intelligent Technology subsidiary by January 1, 2025.
As the Chinese economic media Caixin reported, Huawei’s automotive division, established in 2019, doesn’t manufacture vehicles. Instead, it provides automotive components, emphasizing autonomous driving systems through its Huawei Inside (HI) model.
Some see this move as Huawei positioning itself as a leading supplier of smart vehicle technology, especially as it forms more partnerships in the automotive industry.
Huawei’s entry into the automotive market comes as the industry experiences significant shifts. For decades, the car market has been dominated by American, European, and, more recently, Japanese and Korean companies, which also control the resources and technology used to make electric vehicles. Recent talks between Japanese automakers Nissan and Honda about a potential merger highlight how fast-growing Chinese manufacturers like Huawei pose a real challenge to these established players.
According to The Financial Times, Morningstar analyst Vincent Sun said, “Huawei’s telecom, chip design, and smartphone businesses align well with the increasingly advanced technologies driving the auto industry.” He also pointed out that traditional automakers may need to ramp up their R&D spending to stay competitive, warning that failing to adapt could leave them irrelevant, much like Finnish handset maker Nokia during the smartphone revolution. “Huawei is a different animal,” Sun added.
Huawei has invested at least $5.6 billion in research and development related to electric vehicles over the next five years as part of its search for new growth engines. Executives believe Huawei is ready to tap into dozens of Chinese technologies, from chips, radar, cameras, artificial intelligence (AI), data centers, autonomous driving, and infotainment systems.
The Huawei group posted sales of 4.7 billion yuan (about $640 million) from its new vehicle division last year, more than double the previous year but still less than 1% of the group’s total sales (704 billion yuan, about $96.3 billion).
Earlier this January, Huawei spun off its electric vehicle business to create a subsidiary, Yinwang, to market key electric vehicle-focused systems and components, including autonomous driving software. Since then, Huawei has sold 10% of its stake twice: once to EV startup AVATR Technology, owned by state-owned Changan Automobile and the world’s largest battery manufacturer CATL, and once to Chongqing-based automaker Seres Group.
Meanwhile, Yinwang is valued at $16 billion, far below the market capitalization of the listed division of Geely, one of China’s largest private automakers.
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