Huawei's automotive business is expected to turn a profit this year, bolstered by mid-to-high-end models built in partnership with automakers, the unit's chairman said.
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Huawei's Intelligent Automotive Solutions (IAS) business unit is expected to turn a profit this year, supported by mid-to-high-end models built in partnership with automakers, the business unit's chairman, Richard Yu, said in a speech at the China EV 100 Forum in Beijing yesterday.
Huawei's automotive business once posted annual losses of up to RMB 10 billion ($1.4 billion), but last year losses were reduced to RMB 6 billion, Yu said.
(Richard Yu, chairman of Huawei's Intelligent Automotive Solutions business unit, speaks at the China EV 100 Forum on March 16, 2024 in Beijing. Image credit: China EV 100 Forum)
Yu went on in his presentation to explain Huawei's model for working with automakers, which consists of three main models:
The standard parts supply model, under which Huawei works with many car companies.
The HI (Huawei Inside) model, in which Huawei provides full-stack solutions.
Zhixuan model, in which Huawei helps automakers with product definition and design, and provides a complete system including retail, marketing, and quality management.
Currently, the HI model is mainly adopted by Changan Automobile, whose Avatr sub-brand is using this model, and another sub-brand Deepal will also adopt the model in the future, Yu said, adding that Dongfeng Motor's Voyah and M Hero brands may also adopt a similar cooperation approach.
The four main car companies that are currently working with Huawei under the Zhixuan model are Seres Group, Chery, Beijing Automotive Group (BAIC), and Anhui Jianghuai Automobile Group (JAC), Yu said.
The S9, a joint Huawei-BAIC creation, has recently made it into China's Ministry of Industry and Information Technology's announcement, and next year the company will work with JAC to launch cars priced up to 1 million yuan, Yu said.
He also touched on slow deliveries of the Luxeed S7 from Luxeed, a new EV brand jointly built by Huawei and Chery, saying that a chip shortage and factory relocation had delayed the model's launch and mass production.
Starting in April, the Luxeed S7 is expected to return to normal, Yu said.
Huawei's automotive business was established in May 2019. On November 25, 2023, Changan said it signed an investment cooperation memorandum with Huawei to jointly support a company established by the latter to provide automotive intelligent system and component solutions.
Huawei plans to integrate the core technologies and resources of its IAS business into the new company, which will aim to become a world-class industry leader in automotive intelligent driving systems and components, according to Changan's announcement at the time.
The joint venture is tentatively named Newcool, and Huawei has pledged not to engage in the automotive manufacturing business and not to conduct businesses of the new company, Changan chairman Zhu Huarong said at its global partners' conference on January 16.
($1 = RMB 7.1960)
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