Big Tech In China Is Eyeing EVs For A Reason

Huawei And Other Tech Giants Like Baidu And Xiaomi Into EVs Comes Just At Right Time, When Traditional Automakers Are Trying To Gain An Edge.

  • VW becomes latest to warn chip shortage will curb vehicle output
  • Tesla’s Berlin factory might not start production until January 2022
  • The EV charging business isn’t that profitable

Big Tech Is Mad for EVs

Why are so many of China’s big tech companies falling in love with electric cars? It’s a question friends outside of the auto industry ask quite frequently. A look into Huawei Technologies’ presence at last month’s Shanghai Auto Show may help provide some answers.

HI, or Huawei Inside, is the name the smartphone giant came up with for its intelligent automotive solution. During the car show, Huawei employees in red T-shirts emblazoned with the red and white HI logo were among the busiest of staff as media thronged the company’s displays. The logo is also embedded on the gleaming exterior of BAIC’s Arcfox Alpha-S sedan, the first mass produced vehicle that uses Huawei’s solution. According to Huawei executive Eric Xu, the car can cruise for more than 1,000 kilometers (620 miles) without human intervention, navigating both high-speed roads and city streets, even parking lots. Delivery is slated to start in the fourth quarter.

Huawei provides the digital architecture for the vehicle, allowing over 30 intelligent functions from cockpit connectivity to driver-assist technology. The idea is that Huawei sets up a vehicle’s brain and central nervous system, allowing metal benders like BAIC to focus on things as fundamental as design and mechanics. And The Foray Of Huawei And Other Tech Giants Like Baidu And Xiaomi Into Evs Comes Just At The Right Time, When Traditional Automakers Are Trying To Gain An Edge On Fast-Moving Upstarts Like Nio, Li Auto And Xpeng.

After checking out Huawei’s impressive presence, people may wonder does Huawei want to make its own cars? Is it the next step? For tech rival Xiaomi, that seems to be the end game – the Beijing-based mobile phone seller has committed $10 billion over the next decade to make its own-branded EVs. But whether we see a Huawei-branded car or not, it makes sense that the Shenzhen-based firm is serious about EVs. As Xu laid out, China is adding about 30 million cars each year and that number is growing. Even if Huawei contains its focus to just China and “we can earn an average 10,000 yuan from each car sold, and that’s already a very big business,” he said.

Perhaps even more importantly, the harvest of revenue doesn’t stop once a car is delivered to a customer. Quite the contrary. For a tech company, that’s just the beginning. Real-time insight into where a person is going, the route they’re taking to get there, what they’re searching for online while they’re in transit, what their passengers may be watching in the back seat – that’s all hugely valuable data. With their glowing screens having captured our attention for almost all our waking hours, the car and the time we’re in it has become tech giants’ last bastion. Snare that, and the picture is complete. As Baidu founder Robin Li told me back in 2016, autonomous driving releases an absolute gold mine. Yes, Huawei with its big HI there may have crashed the party but they’re here to stay.

This news was originally published at Bloomberg.

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