Huawei and Changan Auto Establish a New Joint Venture

On November 26th, Huawei announced that it had signed a “Memorandum of Investment Cooperation” with Chinese auto maker Changan Automobile in Shenzhen on November 25th. Huawei plans to establish a new company focusing on the research and development, production, sales, and service of intelligent driving systems and incremental components for smart connected vehicles.

According to the memo, Huawei will integrate the core technology and resources of its Intelligent Vehicle Solution business into the new company, and Changan Automobile has expressed its intention to invest in this company. It is learned that Changan Automobile and its affiliates plan to acquire equity in the target company, with a proportion not exceeding 40%. The specific equity ratio, investment amount, and duration will be further discussed by both parties.

The announcement further stated that the new company’s business scope includes automotive intelligent driving solutions, intelligent car cabins, smart car digital platforms, intelligent vehicle clouds, AR-HUD and smart car lights. Huawei will inject relevant technologies, assets, and personnel into the newly established company specifically for these areas.

Citing an insider from Huawei’s Intelligent Vehicle Solusion Business told, Chinese media outlet Jiemian News reported that the joint venture could be understood as “the independence of the smart car unit in another sense”. He believes that the establishment of the new company is related to the profitability pressure of Huawei’s smart car unit, which still requires high-intensity investment. “Opening up equity, attracting investment, and partnering with the automotive industry is a good thing for the development of the unit”.

At the moment, Huawei is cooperating with a number of Chinese auto makers including Seres, Chery, JAC, BAIC, and Changan Automobile. Among them, Changan is one of Huawei’s closest cooperaters. In November, 2023, Huawei, Changan Automobile, and CATL jointly launched the EV brand Avita. Currently, there are two models of Avita 11 and Avita 12 on the market, both equipped with Huawei’s full set of intelligent vehicle solutions.

It is still uncertain whether the new company will be the only operator of Huawei’s intelligent vehicle business.

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