Huawei seeks foreign investors for smart car unit: Here's why
Huawei has reached out to Mercedes-Benz and Audi, to explore their interest in acquiring stakes in its smart car software and components company, Reuters has reported. This move aims to broaden Huawei's partnerships beyond Chinese brands and safeguard the business from potential geopolitical issues. The company reportedly held initial talks with Mercedes, offering a 3-5% stake at a negotiable valuation.
Mercedes' reluctance and Audi's interest
Mercedes-Benz, however, showed little interest in Huawei's proposal. This is because it prefers to maintain control of its software to preserve its premium brand image rather than outsourcing it to a supplier. Audi's interest in Huawei's offer remains unclear. Nevertheless, Audi and Huawei plan to collaborate on developing autonomous driving technologies for Audi vehicles intended for the Chinese market from 2025.
Valuation of Huawei's smart car unit
Huawei will also spin off its four-year Intelligent Automotive Solution (IAS) business unit. It aims to become the leading supplier of software as well as components for smart electric vehicles (EVs). The unit's valuation is estimated to be between $28 billion and $35 billion. Changan Auto has confirmed that it will invest in Huawei's smart car business once it is spun off, owning up to 40% along with relevant parties.
What about other investors?
Richard Yu, who oversees Huawei's smart car business, stated in November that the company had invited Seres, BAIC Motor, Chery Automobile, and Jianghuai Automobile Group to invest in the smart car firm. He hoped FAW Group would join as well. Dongfeng Motor is another potential investor. While major Chinese EV makers like Nio and BYD rely on their own software, Huawei has partnered with brands like Seres Group and Chongqing Changan Automobile.
