Chinese multinational telecom company, Huawei Technologies Co., is all set to take on Tesla in the global electric car market. Eric Xu, Huawei’s deputy chairman, reportedly said that the company will invest over $1 billion in car component development this year.
“China adds 30 million cars each year and the number is growing. Even if we don’t tap the market outside of China, if we can earn an average 10,000 yuan from each car sold in China, that’s already a very big business for Huawei,” he added.
The investment of over $1 billion will cover the technologies for both self-driving and electric cars. According to Bloomberg, Huawei’s technology already outstrips Tesla’s in terms of coverage. It can allow cars to go over 620 miles without any human intervention.
As a part of its move of entering the electric car market, the Chinese telecom giant will initially partner with three automakers for the manufacture of self-driving cars and also get its logo on them. So far, Huawei has agreed to join hands with BAIC Group, Chongqing Changan Automobile Co. and Guangzhou Automobile Group Co.
Last year, the Trump administration sanctioned the sales of Huawei’s products including smartphones and 5G telecom equipment, which has hindered the company’s advancement into chip-making and fifth-generation networking. Thus, the endeavour of branching out into the electric car sector can possibly be a part of the telecom company’s attempts in making up for the losses and spurring its growth.
While Tesla leads the global electric car market, local upstarts such as Nio Inc. and Xpeng Inc. are also not far behind. Search giants Baidu Inc. and Geely Automobile Holdings Ltd. are also said to be collaborating to build e-vehicles. Furthermore, Xiaomi, popularly known for its affordable gadgets and home appliances, also unveiled plans in March to invest around $10 billion over the next decade in manufacturing electric cars.