Chinese smartphone maker Xiaomi Corp’s pivot into cars has become a high-profile success story. Its SU7 is a hit, forecast to sell 350,000 units this year and even Ford Motor Co CEO Jim Farley has heaped praise on the model.
Less well-known is how rival smartphone maker Huawei Technologies Co has also cemented a dominant position in China’s intensely competitive electric vehicle market – not by making cars of its own, but by creating the intelligent driving software that’s found its way into the cockpits of marques from BYD Co to BMW AG.
Its smart driving solutions unit turned profitable last year, after revenue more than quintupled. Huawei’s software doesn’t just help sell cars to Chinese drivers who are highly attuned to intelligent driving features, it also collects vast amounts of data that may ultimately help the company crack the holy grail of autonomous driving.
Huawei’s "background in hardware and software definitely shows,” Tu Le, founder of Detroit-based automotive advisory firm Sino Auto Insights, said. "People I trust tell me it’s one of the best systems in China. Their aggressiveness points to how important being a player in the space is for them.”
In the EV era, companies are reconfiguring how cars are designed and function. The "brains” of a vehicle have a power that extends way beyond cruise control, emergency braking or parking sensors. And who gets to be in control of that is a topic sure to be high on rotation at this year’s Shanghai auto show, which kicks off Wednesday in China’s financial capital.
But Huawei and other intelligent driving software providers are under pressure after a fatal crash involving a Xiaomi EV late last month. That’s sparked a renewed focus on the claims around assisted driving technology and how such features are marketed to consumers.
Officials have laid out rules to avoid describing advanced driver assistance systems as "self-driving” and to encourage drivers to keep their hands on the steering wheel while using such features, people familiar with the matter said. The new rules could mean the roll out of upcoming smart cockpit and driver assistance systems are delayed for months.
Huawei’s insistence on maintaining control over its intelligent driving ecosystem also means that it’s unlikely to be able to sign up customers overseas.
Intelligent driving technology overlaps with issues of national security and data privacy. Western governments, especially the US, are already wary of Huawei due to its alleged ties to the Chinese government.
Fears that autonomous driving software, which processes real-time data from public roads, could be accessed or exploited may see countries block or restrict Huawei’s technology in foreign-made cars, clouding the company’s growth ambitions just as it’s getting started.
"As long as Huawei’s solution continues to improve, they can continue to be a leader,” Tu said. "The wild card is, can they convince a foreign manufacturer to use their system outside of China?”
At the heart of Huawei’s strategy is the Harmony Intelligent Mobility Alliance (HIMA). It’s a factory floor to showroom approach whereby end-user consumers can order vehicles with Huawei’s software through its online stores or authorised distributors. At its most basic, Huawei just provides the hardware to automakers that facilitates smart cars.
At the auto show, several of the brands on display will be part of Huawei’s alliance.
There’s Aito (a partnership with Seres Group Co), Luxeed (in collaboration with Chery Automobile Co), Stelato (with BAIC Motor Corp) and Maextro (with Anhui Jianghuai Automobile Group Corp). Deliveries under the HIMA framework approached 445,000 units in 2024 and Huawei has set an ambitious target of 1 million units across more than a dozen models in 2025.
Beyond HIMA, Huawei Inside has found its way into the cockpits of Audi’s Q6 e-tron and A8 L models, Chongqing Changan Automobile Co’s Deepal and Avatr ranges and even BYD’s Fang Cheng Bao 8 and 5 models, even though BYD has its own suite of advanced driver-assistance systems that it calls God’s Eye.
BMW and Huawei meanwhile are collaborating to develop smart applications based on the Harmony operating system while Huawei’s HiCar system (the company’s mobile app that connects devices with vehicles) should go into made-in-China BMW models in 2026, the German automaker said last month. It noted that approximately a quarter of BMW’s app users in China use Huawei smartphones.
Some in the industry have chafed at Huawei’s dominance. Chen Hong, the former chairman of SAIC Motor Corp, famously stated in 2021 his unwillingness to cede the "soul” of the vehicle to companies like Huawei. "It’s unacceptable,” Chen said during that year’s shareholder’s meeting. "We have to grasp the soul in our own hands.”
But with the winner-takes-all nature of artificial intelligence and the high barriers of entry to producing a system that can rival Huawei’s, resistance seems to be fading away.
In February, SAIC announced a strategic partnership with the Shenzhen-headquartered tech giant, completing Huawei’s client list so that it now covers every one of China’s state-owned auto manufacturers.
Representatives for Huawei declined to elaborate about the company’s smart driving solutions and philosophy.
However Eric Xu, Huawei’s deputy chairman, told Chinese media in September that considering not all automakers can afford the investment in smart car technology, "we’ll make the systems and make them well, and carmakers can use them directly.”
"We hope to build an open platform that all carmakers can participate in,” Xu said. "Under these new cooperation models, carmakers and component providers are more than just in a simple buy-and-sell relationship. Instead, it’s an in-depth partnership where all parties share the risks and benefits, and get things done together.” – Bloomberg
