Huawei Finds Partner in Changan Auto’s Newly Renamed Smart Car Unit

Chongqing Changan Automobile Co. Ltd. (000625.SZ) has announced a new name for its unit that will work with telecoms and battery giants Huawei Technologies and CATL to develop smart cars, in the latest sign of Huawei’s aggressive movement into the space.

The newly renamed unit, which is 95.38% owned by Changan and 4.62% by New York-listed electric vehicle maker Nio Inc., will now be known by the Chinese name of Avatar Technology Co. Ltd., according to a Changan Auto stock exchange filing on Thursday.

Changan had announced in November it would make high-end smart cars in a new partnership with Huawei, a leading specialist in wireless telecoms technology, and Contemporary Amperex Technology Co. Ltd. (CATL), the world’s largest maker of electric vehicle batteries. The name change of the jointly owned by Changan-Nio unit marks the latest wrinkle in that partnership.

Many have been closely watching Huawei recently for signals of where it sees its future, following U.S. sanctions that have crippled its core businesses selling telecoms networking equipment and smartphones. Some have speculated the company could even directly engage in smart car production, though the company has been low-key on its ultimate roadmap into the space.

A Huawei representative told Caixin the Changan tie-up is technology-related with Huawei as a supplier of car components and technology. A decision on when to announce any Huawei-branded car will come from Changan, which is based in the interior city of Chongqing, the person said. Furthermore, Avatar hasn’t finalized details of its Huawei collaboration or whether it will ultimately produce models under the “HI” nameplate that Huawei has designated for its own-branded smart cars, the person added.

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Huawei’s move into auto-related technology dates back to 2013 when it quietly started a unit to develop internet-based auto applications. In April 2019, it made an inaugural appearance at Shanghai’s international auto show, declaring a plan to become an auto parts supplier. One month later, Huawei officially set up an auto business unit focusing on smart car solutions.

Under the weight of U.S. sanctions, Huawei has slowly been exiting the smartphone business that was once its primary growth driver. Last year it sold its lower-end Honor brand, and sales for its remaining core Huawei brand smartphones have plunged this year as its supply of 5G chips to power its most advanced models runs low without any near-term hope for replenishment. 

In another signal of its future direction, Huawei announced internally this week that Yu Chengdong, the man behind the meteoric rise of the company’s smartphone division, will take over running its smart vehicle business solutions unit instead. 

Huawei’s two major smart car initiatives are known as Huawei Inside, or “HI” and “Huawei

Zhixuan,” which translates to “Huawei Smart Choice.” HI is intended for cars that use a complete Huawei smart car system package, including its autonomous driving system, a knowledgeable source told Caixin.

In addition to the Changan tie-up, Huawei has announced similar partnerships with BAIC BluePark New Energy Technology Co. Ltd., a unit of Beijing-based auto giant BAIC, whose joint venture partners include Germany’s Daimler AG; and Guangzhou Automobile Group Co. Ltd., whose joint venture partners include Japan’s Honda.

The BAIC BluePark tie-up has already announced a model that will include Huawei’s autonomous driving system and carry a starting price of about 390,000 yuan ($60,000). Earlier this week the company said the model, which is aiming to ship at the end of this year, had already received more than 1,000 orders.

Huawei’s Guangzhou Auto tie-up is primarily with that company’s Aion new-energy vehicle unit. Also earlier this week, that unit announced a separate strategic tie-up with the autonomous driving unit of Didi Chuxing, China’s equivalent of Uber, which will see the pair explore a potential joint venture and other forms of cooperation in autonomous new-energy vehicles.

The only announced partner so far for “Huawei Smart Choice” is small auto maker Chongqing Sokon Industry Group Stock Co. Ltd., which said last month that it would use Huawei components in one of its models.

Contact reporter Yang Ge (geyang@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)

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