Huawei Sells Stake in Smart Car Unit to Auto Partner as Profits Surge

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A customer checks out an Aito M7 at a Huawei experience store in Nanjing, Jiangsu province, on July 6. Photo: VCG

Huawei Technologies Co. Ltd. has inked a deal to sell a 10% stake in its car unit to Seres Group Co. Ltd. (601127.SH) for 11.5 billion yuan ($1.6 billion), as the Chinese tech giant’s smart car business moved out of the red.

The agreement, signed Friday, is the second such investment made this month. As with that deal, Seres also agreed to pay for the stake via three cash installments, the Chongqing-based automaker said in a Shanghai Stock Exchange filing dated Monday.

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Huawei sold a 10% stake in its car unit to Seres Group for 11.5 billion yuan ($1.6 billion) to enhance Aito brand competitiveness.
Yinwang, a Huawei subsidiary, focuses on intelligent car systems, and it turned a 2.23 billion yuan profit in the first half of 2024.
Chinese automakers are investing in smart car technology to compete with foreign brands like Tesla and XPeng in the growing EV market.

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Who’s Who

Huawei Technologies Co. Ltd.: Huawei Technologies Co. Ltd. has sold a 10% stake in its car unit to Seres Group Co. Ltd. for 11.5 billion yuan ($1.6 billion) to enhance their smart car business. The unit, Yinwang Intelligent Technology Co. Ltd., focuses on intelligent driving solutions and turned a profit in the first half of 2024. Huawei's chairman, Xu Zhijun, also leads Yinwang. The deal aims to strengthen the Aito brand and collaboration between Huawei and Seres.

NIO Inc.: The article does not provide any information about NIO Inc. It primarily discusses Huawei's deal to sell a 10% stake in its car unit to Seres Group Co. Ltd. and details about Huawei’s smart car business and other related investments.

XPeng Inc.: XPeng Inc. is a Chinese electric vehicle manufacturer known for its AI-powered in-car operating system. It is a competitor in the smart car technology market, which is focused on features like self-driving software and connectivity. XPeng rolled out its AI-powered system in May, positioning itself against rivals such as Tesla in the rapidly evolving automotive industry.

Tesla Inc.: Tesla Inc. is mentioned in the context of Chinese automakers ramping up their smart driving development to fend off competition. Tesla has been inching closer to launching its Full-Self Driving system in China, highlighting the competitive landscape in the world's largest auto market.

NavInfo Co. Ltd.: The article content does not provide information about NavInfo Co. Ltd. It focuses on Huawei selling a 10% stake in its car unit to Seres Group for $1.6 billion and its broader strategic moves in the smart car sector.

Chongqing Changan Automobile Co. Ltd.: Chongqing Changan Automobile Co. Ltd. (000625.SZ) is a state-owned automaker backing EV startup Avatr Technology Inc. Avatr made a similar deal with Huawei, agreeing to pay 11.5 billion yuan for a 10% stake in Yinwang, Huawei’s smart car unit.

Aiways Automobiles Co. Ltd.: The article does not mention Aiways Automobiles Co. Ltd. It primarily discusses Huawei's deal to sell a 10% stake in its car unit to Seres Group, the company's smart electric vehicle ventures via its subsidiary Yinwang Intelligent Technology, and similar investments made by Avatr Technology and the significance of smart car tech in the Chinese auto market.

WM Motor Technology Co. Ltd.: The article does not mention WM Motor Technology Co. Ltd. However, it focuses on Huawei's deal to sell a 10% stake in its smart car unit to Seres Group for 11.5 billion yuan, its automotive developments through Yinwang Intelligent Technology Co. Ltd., and the competitive landscape in China's smart car market.

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What Happened When

January 2024：: Yinwang Intelligent Technology Co. Ltd. was established as Huawei’s wholly owned subsidiary.

May 2024：: XPeng Inc. rolled out its AI-powered in-car operating system.

First half of 2024：: Huawei's car unit turned a 2.23 billion yuan profit.

Previous week before August 23, 2024：: Avatr Technology Inc. made a similar deal with Huawei to purchase a 10% stake in Yinwang for 11.5 billion yuan.