Huawei to Devote $1 Billion to Smart-Vehicle Sector in Bid to Weather US Sanctions

Chinese telecom giant Huawei announced on Monday that it will invest more than $1 billion in researching and developing self-driving and electric vehicles this year, joining the likes of Tesla, Xiaomi and Baidu to angle for a piece of the world’s largest automotive market.

“The smart car business unit receives one of the highest investments from Huawei. We will invest more than $1 billion in car component development this year,” Huawei’s rotating chairman Eric Xu told analysts in Shenzhen at the company’s annual Analyst Summit.

Huawei has entered into partnerships with three automakers to establish sub-brands for intelligent cars – including with BAIC Group, Chongqing Changan Automobile Co. and Guangzhou Automobile Group. The first model jointly developed by Huawei and BAIC, the Arcfox αS HBT, will go on display at Auto Shanghai, a biennial international automobile show that will open on April 21.

Huawei’s logo will be seen on vehicles equipped with its autonomous-driving technology in the same way Intel puts its logo on some computers to draw attention to its microprocessors, Xu added.

Xu also said that Huawei’s self-driving technology has already surpassed Tesla’s as it allows cars to cruise for more than 1,000 kilometers without human intervention, while Tesla’s vehicles can only do 200 kilometers and drivers are required to keep their hands on the steering wheel for safety purposes even if they are using the Autopilot feature.

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“Once self-driving is achieved, we’re able to disrupt all of the related industries, and we think that in the foreseeable future, namely in the next decade, the biggest opportunity and breakthrough will be from the automobile industry,” said Xu, one of Huawei’s three executives who take turns to serve as the tech giant’s chairman, CNBC reported.

Former US President Donald Trump cut off Huawei’s access to processor chips and other technology needed to make smartphones, claiming that its telecom networking equipment could be used by the Chinese government for spying, an accusation both the Chinese authorities and the company strongly denied. As a result, Huawei’s smartphone sales plummeted 42% in the last quarter of 2020.

Xu said he does not expect the Biden administration to call a halt to the sanctions any time soon and the company is turning to other areas such as health care, smart agriculture and electric vehicles to cushion the impact of being blacklisted by the US.

Other strategic moves would include developing fifth-generation networking technology, creating an all-scenario intelligent experience for users, reducing energy consumption through technological innovations and fixing the supply problem, Xu mentioned at the conference.