OPPO, Qihoo 360 the latest in China EV race

OPPO founder Tony Chen is researching the EV value chain and his team has visited the China Automotive Technology and Research Centre; meanwhile, Qihoo 360 will lead the series D financing of Hozon Auto and become its 3rd largest shareholder

OPPO, Qihoo 360 the latest in China EV race
China's electric vehicle market is attracting companies from all across the corporate sector, particularly companies that see a valuable spinoff from their manufacture of mobile phones. File photo by Reuters.

(ATF) Chinese smartphone maker OPPO and anti-virus software provider Qihoo 360 are said to be joining a long list of Chinese technology firms jumping into China’s incredibly competitive electric vehicle (EV) industry. 

The two firms will be joining a race with e-commerce mammoth Alibaba, search engine leader Baidu, telecom giant Huawei, and popular gadget maker Xiaomi to tap the fast-growing EV space. Not only will they be competing with established automakers in the country, such as Geely and Warren Buffett-backed BYD Auto, but also upstarts such as Nio, Li Auto, and Xpeng Motors.

OPPO’s founder Tony Chen is researching the EV value chain and has opened positions for autonomous-driving technical experts, 36kr said on Thursday, citing sources familiar with the matter.

In the last two weeks, Chen met with Zhu Wei, president of the domestic passenger vehicle division of Tesla’s battery supplier Contemporary Amperex Technology Co Ltd. Chen and his team also visited organisations such as the China Automotive Technology and Research Centre, the report said.

Wu Henggang, OPPO's vice president of software engineering, as well as chief scientist Guo Yandong, who joined OPPO last year from XPeng Motors, have reportedly been involved in the preparation of a self-driving team. The related cockpit positions have been opened, the report said.

OPPO will likely become another smartphone maker to tap China’s burgeoning EV market after Xiaomi announced late last month to invest $10 billion over the next 10 years in the EV business. Xiaomi and OPPO ranked the fourth and fifth by global smartphone shipments in 2020 and had market shares of 12% and 9%, respectively, according to Canalys data. 

Huawei, which ranked the third by global smartphone shipments last year but started to record declines in the fourth quarter because of US sanctions, created a sensation last week at the Auto Shanghai show by launching its first self-driving car in partnership with Beijing Automotive Group Co. Companies in EV and battery sectors and Huawei’s supply chain soared at the news.

Patents related to cars

There had been signs OPPO would make a foray into the EV sector. Founder Chen said in 2019 that OPPO would focus on its areas of strength if it ever chose to make cars. OPPO has reportedly applied for about 60 patents related to cars, in areas such as vehicle positioning, distance measuring, anti-tracking and cameras.

Last month, OPPO announced a partnership with Li Auto in which its new Find X3 series smartphones can be used as the Bluetooth car 'key' of Li Auto cars.

Besides smartphones, OPPO also makes a host of internet-connected devices such as TVs, wristbands, smart watches and headphones. 

In the meantime, Qihoo 360 will be leading the series D financing of Hozon Auto and become the latter’s third largest shareholder, Sina reported on Monday evening. 

Hozon Auto, which ranks fifth amongst Chinese EV startups, has received a letter of intent to invest from Qihoo 360, the report said, citing a source with knowledge of the matter. 

The Chinese EV maker expects to raise 3 billion yuan ($464 million) from this financing round, according to another report from Tfcaijing.com.

Zhang Yong, Hozon’s co-founder and chief executive, told local media that Hozon values Qihoo 360’s strength in software technology, artificial intelligence, marketing, as well as financing. 

Market observers said Hozon, whose cars are sold for 100,000-150,000 yuan ($15,500-$23,200), is a good match for Qihoo 360 as the security software provider also targets the mass market. 

However, Qihoo 360 poured cold water on the deal just a few hours later.

It shared a statement with local media that its letter of intent was “not legally binding”, and that the partnership with Hozon was just one of its explorations in the “smart” car sector.

“Qihoo 360 is still studying the 'intelligent' electric vehicle field. We’re open to actively pursue all kinds of partnerships,” the statement, quoted by Sina, said.

Qihoo in talks

Qihoo 360 was reportedly also in talks with other EV startups, such as HiPhi, Enovate, Leap Motor, and Singulato, for EV partnerships.

By offering free anti-virus software for computers and smartphones, Qihoo 360 has achieved high penetration in China - over 90% for computer users and about 70% for smartphone users. Its security solutions has reportedly also been installed on 1 million cars in China. The Beijing-based company makes money from advertising, gaming and value-added services, and also sells devices such as routers, smartphones and smart watches.

Before this, Qihoo 360’s founder, Zhou Hongyi, had led a team to visit Hozon's plant that develops its Neta-branded electric cars. Last Monday, shares of Qihoo 360 jumped as much as 5.1% after Zhou was seen at Hozon's booth at Auto Shanghai 2021.

Hozon sold about 15,000 cars in 2020, up by 51% from 2019. As of last November, three Neta models had been unveiled after the first one started selling in November 2018.

Everyone’s doing it

Cheered by Tesla's success in the commercialisation of EVs, internet giants including Tencent Holdings, Amazon.com and Alphabet, have also developed auto-related technology or invested in 'smart-car' startups.

Baidu announced a tie-up with Chinese automaker Geely in January to make EVs. The two companies plan to invest 50 billion yuan ($7.7 billion) in the next five years in the EV joint-venture, according to a report by Sina last week.

Alibaba has formed an EV joint venture with SAIC Motor, while China's Uber equivalent Didi Chuxing is making EVs designed for ride hailing services with BYD. 

Huawei announced earlier this month it would supply autonomous-driving solutions to automakers such as Beijing Automotive Group Co (BAIC Group), Chongqing Changan Automobile Co and Guangzhou Automobile Group Co, and has designed a logo for sub-brand “HI”, which stands for “Huawei Inside”, to be attached to their vehicles.

Reuters reported in December that Apple is pushing to design an electric vehicle and batteries, aiming at a possible 2024 launch. A report from the Korea Times said this month that the the giant is close to signing a partnership with South Korea's LG and Canadian manufacturing giant Magna International to bring its long-rumoured EV to life. 

Electric cars have taken off in China thanks to strong policy support from Beijing, including subsidies. The government has announced a target for new energy vehicles (battery EVs and plug-in hybrid EVs) to account for 20% of all new car sales by 2025.

Even though some of these measures have been reduced, research firm Canalys forecasts that 1.9 million electric vehicles will be sold in China in 2021, representing year-on-year growth of 51%. 

ALSO SEE:

Who is really winning in the great electric vehicle disconnect war?

VW expects EVs to account for half of China sales by 2030

Who killed the gasoline car? The future of electric vehicles