Exploring New Alliances with Audi and Mercedes
Huawei Technologies, a leading Chinese tech giant, is actively seeking to expand its influence in the smart car industry by approaching global automobile heavyweights, Mercedes Benz and Volkswagen’s Audi.
According to insider sources, Huawei has proposed the sale of small stakes in its smart car software and components firm, marking a strategic move to broaden its partnerships beyond Chinese borders.
Bridging the Geopolitical Divide
Facing U.S. sanctions since 2019, Huawei’s initiative is not just a business expansion but also a tactical step to shield its ventures from potential geopolitical conflicts.
By reportedly inviting foreign investors like Mercedes and Audi, Huawei aims to fortify its position against the backdrop of international tensions. This approach underscores the company’s persistence in navigating through the challenging landscape of global tech politics.
Intelligent Automotive Solutions Business Spin-off
Huawei announced last month its plans to spin off its Intelligent Automotive Solution (IAS) business unit, a four-year-old division focusing on becoming a dominant player in the smart electric vehicle (EV) market. The unit, valued between $28 billion and $35 billion, underscores Huawei’s ambition in the EV domain.
Negotiations and Partnerships
Recent weeks saw Huawei in preliminary talks with Mercedes, offering a 3% to 5% stake, though the valuation is still under negotiation. However, Mercedes appears cautious, prioritizing its software autonomy to maintain its premium brand image.
The level of interest from Audi remains unclear, but partnerships between Audi and Huawei are on the horizon, particularly in developing autonomous driving technologies for the Chinese market from 2025.
With the discussions being confidential, Mercedes and Audi have refrained from commenting on what they term as speculation. Huawei has not responded to requests for comment on the matter.
This silence reflects the sensitive and speculative nature of such high-stake negotiations in the tech and automotive industries.
Huawei’s Global Automotive Strategy
This move is a part of Huawei’s broader strategy to align with global automakers in China, who are increasingly partnering with Chinese firms to cater to the tech-savvy local market.
Companies like Volkswagen are collaborating with Chinese EV and autonomous driving technology firms, indicating a growing trend of cross-industry and cross-border alliances.
Challenges Amidst U.S. Sanctions
Richard Yu, head of Huawei’s smart car business, highlighted the challenges faced by the company in becoming a main supplier for European, U.S., and Japanese companies due to U.S. sanctions.
Despite these obstacles, Huawei has managed to forge partnerships with smaller electric car makers and some established automakers in China.
Future Prospects and Investments
Huawei’s outreach for investments includes inviting companies like Seres Group and Chery Automobile to invest in the smart car firm. Changan Auto has already expressed interest in owning a significant share post-spinoff.
Huawei’s proactive approach in seeking diverse investors reflects its commitment to securing a firm footing in the rapidly evolving smart car industry, despite geopolitical headwinds and market challenges.
In summary, Huawei’s recent overtures to global automotive giants signify its ambitious plans to solidify its position in the smart car sector.
While navigating through the complexities of international sanctions and market competition, Huawei’s strategy of forming strategic alliances could redefine the landscape of the smart car industry in the years to come.