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Huawei’s EV Venture: Dissolving Boundaries or Risky Gamble?

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In a strategic move, Chinese tech heavyweight, Huawei, is making strides to strengthen its partnerships beyond its domestic borders, particularly after facing US sanctions over the past couple of years. To this end, Huawei’s Intelligent Automotive Solution (IAS) is positioning itself to become the leading provider of software and parts for smart electric vehicles (EVs). As per the company, the IAS unit holds a value of approximately $34.67 billion.

Interestingly, a proposal was made to Mercedes Benz to take a 3–5% stake in the IAS unit. Mercedes Benz, however, opted to retain its software autonomy rather than sourcing it externally. Meanwhile, reliable sources reveal that the possibility of a collaboration between Huawei and Audi to further enhance Audi’s autonomous drive technology, designed for the Chinese market from 2025 onwards, is on the table.

In 2019, US sanctions were imposed on Huawei, subsequent to an executive order issued by President Donald Trump, causing the company substantial setbacks. This also led to the firm receiving similar sanctions from European countries including Germany, UK, France, and Italy. As a result, Huawei was motivated to diversify its ventures into a range of arenas from advanced vehicle software to AI infused pig farming solutions.

It is suggested by a reliable source cited by Reuters, that securing investments from significant German motor industry players may mitigate further geopolitical tensions. It’s worth noting that a sizeable percent of Huawei’s revenue, totalling to around $560 million last year, is garnered from patents via almost 200 bilateral patent licences. Both Mercedes-Benz and Audi are engaged in patent agreements with Huawei as it stands. On being asked to comment, representatives from both Mercedes and Audi chose to remain silent.

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