Audi, Mercedes to invest in Huawei? Chinese tech giant held meetings exploring potential EV partnership

In what could turn out to be a major development for the global EV industry if it becomes true. Huawei apparently met Audi and Mercedes, exploring a possible joint venture or partnership for its EVs, as per a Reuters report.

The meeting was held behind closed doors and was set up to explore the possibility of the German automakers acquiring small stakes in Huawei’s smart car software and components firm.

The move by Huawei aims to expand its partnerships beyond Chinese brands and, in part, mitigate the impact of US sanctions imposed since 2019. The company hopes that having foreign investors will help safeguard its business against potential geopolitical tensions.

Huawei recently announced its intention to spin off its Intelligent Automotive Solution (IAS) business unit, which focuses on becoming a leading supplier of software and components for smart electric vehicles (EVs).

Reuters quotes industry sources, estimating the unit’s value to be between $28 billion and $35 billion, if it goes through in the next year and a half.

During Huawei’s preliminary talks Mercedes, the German automaker reportedly offered to buy a 3% to 5% stake. However, Mercedes may not be that keen and has been showing little interest, and plans to to retain control over its own software and to uphold its premium brand positioning, Reuters reported, quoting internal sources.

Audi’s level of interest in Huawei’s offer is yet to be determined, but sources suggest a potential partnership between Audi and Huawei to develop autonomous driving technologies for Audi vehicles in the Chinese market from 2025.

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As global automakers increasingly seek partnerships in China, Huawei’s move aligns with the trend of collaboration between international car manufacturers and Chinese companies to develop advanced features for the tech-savvy Chinese consumer base.

While several Chinese EV manufacturers have relied on their proprietary software, Huawei has engaged in partnerships with both smaller electric car makers and established automakers. Changan Automobile has already expressed its intention to invest in Huawei’s smart car business, potentially owning up to 40% after the spin-off.

Huawei’s efforts to secure investments and partnerships in the automotive sector reflect the challenges posed by US sanctions, hindering its position as a primary supplier of intelligent solutions for European, US, and Japanese companies.

(With inputs from agencies)