Huawei Is Causing Damage to the Chinese EV Industry

According to the report, Changan Auto and Chery Auto have both raised concerns and are engaged in discussions to address the issue, with Seres, a smaller car manufacturer, also feeling the impact.

Changan and Chery had previously formed partnerships with Huawei to develop their premium EV brands. The MDC 810 unit, crucial for advanced driver assistance systems, is central to Huawei’s ambitions of becoming a leading supplier of smart Electric Vehicle (EV) software and components. The production snag is linked to the absence of a key component in the MDC 810.

These challenges come at a pivotal moment for Huawei, which is actively seeking additional investors for its Intelligent Automotive Solutions (IAS) business unit, intending to spin it off as a standalone entity. Changan Auto has expressed intentions to acquire up to 40% ownership in the new company.

Reuters notes that the affected companies launched three models in the last quarter of 2023. Changan recently cited component supply issues as a factor contributing to a two-week delay in deliveries, without explicitly mentioning Huawei. The company has received over 20,000 purchase orders for its Sedan Avatr 12, priced from $41,880, and plans to compensate buyers $2,100 for the delays. Similarly, Chery has received over 20,000 orders for its Sedan Luxeed S7, priced at $35,150, and plans to compensate buyers $1,400 for late deliveries.

Huawei has been actively promoting the Luxeed brand, with Executive Director Richard Yu claiming superior performance compared to Tesla’s Tesla S and a better price-performance ratio than the Model 3.

Meanwhile, Seres aimed to deliver the initial batch of 2,000 Aito vehicles to buyers by January 26 but failed to meet the deadline. The Alpha S car from Arcfox, which relies on Huawei’s MDC 810 computing unit, also faced production delays due to component shortages.

Huawei’s MDC 810 enables automakers to offer smart driving features, including highway autonomous driving and traffic assistance, akin to Tesla’s Autopilot feature. These features are highly sought after in China, the world’s largest automaker market, where numerous electric and hybrid cars vie for consumer attention.

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