Huawei Enters Automobile Market: Selling Cars, Supplying Technology and Parts

Huawei Technologies, a major Chinese telecommunications equipment company, is accelerating its automobile-related business. Huawei, whose smartphone business has been severely damaged by sanctions by the United States, has newly entered the automobile sales business in order to mitigate the effects of the slowdown in the smartphone business. Chief Executive Officer of Huawei Consumer Business Group, Mr. Chengdong (Richard) Yu said, “Electric vehicles have high selling prices, so they are good products that can compensate for the decrease in sales of the smartphones and smart home devices,” and expressed expectations for the company’s automobile business.

The first model sold by Huawei is Chongqing Jinkang’s Seres SF5 range extender electric vehicle. It is equipped with Huawei’s electric drive system “HUAWEI Drive ONE” (combines a motor, reducer and motor control unit), connected technology “HUAWEI HiCar” and audio system “HUAWEI Sound.” The factory shipment volume for 2020 of the Seres SF5, whose delivery began in July 2020, was only 1,051 units. However, within a month of starting sales at Huawei stores (online shops and physical stores) in late April 2021, the number of sales contracts reached 10,000 (based on news reports). Most of them were orders via Huawei. The company plans to increase the number of stores selling cars to 200 by July 2021 and more than 1,000 by the end of the year. The sales target for 2022 is 300,000 units (including vehicles other than the Seres brand).

According to Chinese media reports, Huawei’s margin for sales of the Seres SF5 is about 10%. The price of the SF5 sold at Huawei stores is 216,800 CNY (two-wheel drive) / 246,800 CNY (four-wheel drive), so the margin per unit is about 22,000-25,000 CNY.