With its smartphone and 5G business in shambles, Huawei is preparing to challenge car maker Tesla

With its smartphone and 5G business in shambles, Huawei is preparing to challenge car maker Tesla
Huawei has lost access to integral smartphone components, thanks to the US. The company, which became the world's largest smartphone vendor in the second quarter, saw its market share decline sharply over the summer, and things are expected to get worse with time. Reports suggest its smartphone shipments could drop as much as 75 percent next year.

The company is also apparently contemplating the sale of its sub-brand Honor and if things get uglier, it might exit the smartphone business altogether. Of course, the Chinese company doesn't just make phones, but given that its other cash cow, the networking gear business, is also under threat, it might focus its attention on an entirely new sector. And what might that be? Per a new Nikkei Asia report, the company is planning to enter the auto industry.

Huawei's smart car ambitions date back to 2013

Huawei first set up a unit to create internet-based auto applications in 2013. It made its Shanghai international auto show debut in 2019, where it also announced plans to become an auto parts supplier. A month later it started a unit to develop smart car solutions.

The company's auto wing consists of five categories - smart driving, intelligent network, smart cockpit platform, smart electric, and cloud services. 

Huawei's electric car prototype is ready

The manufacturer has reportedly been building up the capacity to make nearly everything required for smart cars. 

Xu Zhijun, a rotating chairman of the company has been quoted saying:

The company's autonomous driving system is said to be better than Tesla's Model 3's.

A person who is apparently privy to Huawei's plan has said that it wants to become a dominant supplier of all hardware and software for smart cars. The company has reportedly been poaching employees from major auto suppliers and is prepared to set up a team with thousands of professionals.

It also edited its business registration in August to include production and sales of auto parts and smart driving systems in its business scope . 

The company had previously confirmed that HarmonyOS, its cross-platform operating system, will also be installed in in-car entertainment systems. Over 150 car models made by 20 manufacturers currently feature Huawei's HiCar smart cockpit platform, which is similar to Google's Android Auto and Apple's CarPlay. 

Huawei is particularly serious about making chips and OS for cars and is moving forward with its plans aggressively. 

Auto industry players are monitoring the Chinese company's expansion closely and they are apparently concerned that Huawei will eventually start manufacturing its own cars. 

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The company has already co-developed a prototype with a Chinese manufacturer that will start road tests towards the end of 2020 and go on sale in Q4 2021.

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