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Huawei Technologies Co. will spend $1 billion on research into self-driving and electric car technologies. This will speed up plans to compete with Tesla Inc. and Xiaomi Corp. in the world’s largest vehicle market.
Rotating Chairman Eric Xu told analysts in Shenzhen on Monday that Huawei’s self-driving technology has already surpassed Tesla’s in some ways. For example, Huawei’s technology lets cars drive for more than 1,000 kilometers (621 miles) without human intervention.
The Chinese telecom giant will work with three automakers to make self-driving cars with the Huawei name as a sub-brand, said Xu, one of three executives who take turns filling the post. It will only work with a small number of partners and put its logo on cars that use its self-driving technology, just like Intel does with PCs that use its microprocessors. So far, the mobile giant has agreed to work with BAIC Group, Chongqing Changan Automobile Co., and Guangzhou Automobile Group Co.
“One of the biggest investments Huawei makes is in its smart car business.” We will invest more than $1 billion in car parts development this year, according to Xu.”Every year, China adds 30 million cars, and the number keeps going up.” “Even if we don’t sell outside of China, if we can make an average of 10,000 yuan from each car sold in China, that’s already a very big business for Huawei.”
Huawei is coming out of its hardest year ever when sanctions from the Trump administration killed its once-leading smartphone business and stopped it from making progress in chipmaking and 5G networking. The Biden White House doesn’t look like it’s going to stop, so Huawei’s billionaire founder Ren Zhengfei is pushing the company into new growth areas like smart farming, health care, and electric cars. It wants a place at the table with the big tech companies that are trying to set the rules for the quickly changing fields of connected cars, homes, and workplaces.
Huawei wants to join tech giants like Apple Inc. and Xiaomi in going after the auto industry. They are betting that cars of the future will become more green, self-driving, and connected. Canalys, a research firm, predicts that the number of EVs sold in China could grow by more than 50% this year alone.
This is because consumers are buying cleaner cars, and prices are going down. Information and entertainment features made by Huawei are already in Mercedes-Benz sedans, and the company is working on smart car systems with companies like BAIC BluePark New Energy Technology Co. The Arcfox S HBT will be the first model made in partnership with the Chinese EV maker. It will be shown for the first time at Auto Shanghai in April.
“I don’t know if they were bragging or not, but my team said they can make cars drive themselves for 1,000 kilometers without any help from people. “That’s a lot better than Tesla,” Xu said Monday.
But Huawei is entering a market that is already very crowded. Many automakers, from Tesla to local startups Nio Inc. and Xpeng Inc., are fighting for a piece of the world’s biggest EV market. Xiaomi is known for making affordable gadgets and home appliances like rice cookers and robot vacuums. Last month, the company announced plans to spend about $10 billion over the next 10 years to make electric cars. Baidu Inc., a big search engine, and Geely Automobile Holdings Ltd., a car company, are also said to be building cars together.
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