Huawei intends to release electric vehicles (EVs) under its brand name, and could launch its first models later this year, reports Reuters. The firm is negotiating with BIAC Changan Automobile and BluePark New Energy Technology to secure production support.
The Chinese conglomerate has previously supplied several automotive companies with connected car components and advanced self-driving systems. In January, Bloomberg indicated it had begun testing a vehicle-to-infrastructure transportation solution in its home country.
Formerly the world’s top smartphone manufacturer, the core business has been challenged by sanctions made by the U.S. government.
Huawei, the EV Company?
According to Reuters, Huawei intends to make developing EVs the main focus of its business in the future.
The conglomerate tapped Richard Yu, its consumer products head, to spearhead the new initiative. Previously, the executive played a key role in building its handset segment into a globally dominant enterprise.
Huawei has an aggressive product introduction roadmap prepared, which involves launching its first EVs in 2021. Since the corporation lacks its own car factories, it is attempting to strike a deal with Changan to use its facilities. It is also in talks with BAIC BluePark to have it make passenger vehicles under its brand name.
The technology giant publicly refuted claims that it plans on becoming a battery-powered transport vendor. However, it did affirm its commitment to helping manufacturers make better automobiles using its information and communications technologies. Neither Changan nor BAIC BluePark has publicly responded to media inquiries regarding its negotiations with the telecom.
A Surprising But Sensible Pivot
If Huawei initiates a pivot to becoming an EV company, the move would be surprising but sensible given the circumstances.
Over the last few years, Washington has effectively cut off its access to cutting-edge mobile device semiconductors and software. Without those components and programs, it has lost the ability to compete in the domestic or international smartphone markets. Last month, reports emerged that it would reduce its handset output by around 60 percent in 2021.
As things stand, Huawei cannot continue being a thriving global conglomerate using its traditional business model.
While not the most obvious strategic repositioning, it could have a future as an EV vendor. The corporation developed automotive technologies with General Motors, Daimler, and BIAC BluePark in the past. It could apply its know-how to its new venture, like how Apple used its experience as a computer manufacturer to reinvent the cell phone.
After all, Huawei established itself as China’s number one mobile device vendor. It could leverage its reputation among consumers to become a disruptor within its domestic EV marketplace. But it has to make a big move before Xiaomi, Oppo, and its other rivals assume their place in the popular consciousness.
In addition, market experts predict non-gasoline-powered vehicles will make up to 20 percent of China’s auto market by 2025. Jumping into a rapidly emerging sector would be a smart maneuver for a company known for its technological innovations.
No matter what strategic pivot Huawei makes, it will be a gamble. The conglomerate risks embarrassing itself by putting out new products it does not specialize in. But being bold in the face of unprecedented challenges is infinitely better than sliding into obsolescence.