Huawei Explores Partnerships with Mercedes and Audi for Smart Car Software Unit Amid Global Expansion

In an effort to expand its global partnerships, Chinese company Huawei has engaged in talks with Mercedes and Audi to explore their interest in acquiring stakes in its smart car software and components unit, as reported by Reuters.

Objectives and Challenges of Huawei’s Move

Huawei aims to strengthen its relationships outside the Chinese market and safeguard against potential geopolitical tensions, the company seeks to become the dominant supplier of smart electric vehicle software and components. Recently, it transformed its smart car business unit into an independent company.

Valuation and Negotiations

Huawei’s smart car unit is valued between $28 and $35 billion. The company held discussions with Mercedes to sell a stake ranging from 3% to 5%, however, Mercedes showed limited interest in the offer, preferring to maintain control over its software.

Potential Collaboration between Audi and Huawei

Audi plans to develop autonomous driving technologies in collaboration with Huawei, these technologies are expected to be used in vehicles for the Chinese market starting from 2025, as part of a joint venture with the FAW Group.

Current Trends in the Chinese Auto Industry

Partnerships between Chinese and global companies are a growing trend in the automotive industry, Volkswagen is working with Xpeng and Horizon Robotics to develop smart electric vehicles in China, while Audi collaborates with SAIC Motor to develop electric vehicles tailored for the Chinese market.

Huawei’s Challenges and Opportunities

Huawei faces challenges due to U.S. sanctions, as noted by Richard Yu, who oversees the company’s smart car business, nevertheless, Huawei has managed to form partnerships with companies like Seres Group and Changan, strengthening its position in the Chinese smart car market.