Huawei’s carmaker move signals major EV gear shift  

The troubled Chinese tech giant is poised to take control of small automaker Chongqing Sokon’s electric car unit as it bids to become more than just an auto software provider and instead a vehicle producer in its own right 

by Sean OMeara
Huawei’s carmaker move signals major EV gear shift  
A Seres Huawei Smart Selection SF5 electric vehicle at the Auto Shanghai show on April 19. Photo: Reuters

China's Huawei Technologies is close to finalising a deal that could see it evolve into an end-to-end electric vehicle producer.

The tech firm is in talks to take control of Chongqing Sokon's electric vehicle unit, sources have revealed, in what will be a significant strategic shift for the world's largest telecom equipment maker.

Huawei, which has been battered by US sanctions, is set to acquire a controlling stake in Chongqing Jinkang New Energy Automobile, in a move that will allow it to make intelligent cars bearing its own nameplate. Jinkang counts US EV brand Seres, formerly known as SF Motors, as its main asset.

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The push into smart cars, if confirmed, would signal a major shift in business focus for Huawei after two years of US sanctions that have cut its access to key supply chains, forcing it to sell a part of its smartphone business.

Underscoring the shift, the company's rotating chairman Eric Xu also announced pacts with three state-owned Chinese carmakers, including BAIC Group, to supply "Huawei Inside", a smart vehicle operating system, at the Shanghai Auto Show earlier this month.

Huawei's foray into EVs comes as technology firms such as Xiaomi Corp have been stepping up efforts in the world's biggest market for electric vehicles, with Beijing heavily promoting greener vehicles to reduce carbon emissions.

"As individual consumer demand for smart EVs has been picking up notably since mid-last year, the track is now clear and solid in front of the tech giants," said Yale Zhang, managing director of Automotive Foresight. 

EV BRAND

“But despite of their years of success and experience in smartphone markets, it will still take a few years for them to build a car brand acceptable in the EV sector."

It’s reported the telecom giant hopes to finalise the deal by as soon as July.

Huawei is also said to be seeking control of the BAIC's EV brand ArcFox, which recently launched its Alpha S model equipped with the "Huawei Inside" system.

Sales of new energy vehicles, including pure battery electric vehicles as well as plug-in hybrid and hydrogen fuel cell vehicles, are expected to make up 20% of China's overall annual auto sales by 2025.

SERES INVOLVEMENT

For months, Huawei has been deeply involved in the operation and manufacturing of the little-known Sokon and its loss-making Seres unit.

Under the tie-up, Seres's first model, "Huawei Smart Selection" SF5, debuted at the Shanghai Auto Show and received over 3,000 orders within two days. 

The company aims to launch the first intelligent car under its own brand for mass production at the earliest by the end of this year.

  • Reporting by Reuters

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Huawei Sokon Seres Chongqing BAIC SF5