Huawei enters China’s electric car race in competition with Tesla

Huawei Consumer Business Group CEO Richard Yu announced on Dec. 23, 2021, the first car with HarmonyOS will begin deliveries in February 2022.
Evelyn Cheng | CNBC

BEIJING — Less than a week after Chinese electric car start-up Nio announced its latest competitor to Tesla, Huawei released details on a vehicle with specs it claims beat the Model Y.

Chinese tech giant Huawei is best known for its telecommunications products and smartphones, and says it will not make cars on its own. But it has been working with automakers on car technology such as autonomous driving.

The first car with Huawei’s HarmonyOS operating system will be the Aito M5, a car that runs on both electricity and fuel, Richard Yu, executive director and CEO of Huawei’s consumer business group, said Thursday at the company’s winter product launch event.

Deliveries are set to begin around Feb. 20 after the Lunar New Year, said Yu, who is also CEO of Huawei’s intelligent automotive business solution unit.

Post-subsidy prices for the Aito M5 start at 250,000 yuan ($39,063). That’s lower than Tesla’s Model Y, which starts at starts at 280,752 yuan after subsidies.

On Saturday, Nio revealed deliveries of its ET5 electric sedan would in September with a starting price of 328,000 yuan ($51,250) pre-subsidy. Nio’s ET7 sedan, set for delivery in March, starts at 448,000 yuan.

Yu claimed in his one-hour presentation that the Aito M5 offers peak power and driving range that are better than the Model Y. However, unlike Tesla’s cars the Aito M5 is not purely powered by electricity as it has a fuel tank for extending driving range when the battery has run out of power.

Start-up Li Auto features a similar fuel-powered range extension feature for its Li One, the latest model of which lists a price of 338,000 yuan, without subsidies.

Some of the numerous other features Yu described included double-layered sound-proof glass.

“You will know whether it is premium or not by the sound,” Yu said via the company’s English translation of his Mandarin-language remarks. “We are able to offer the ‘library grade’ quality experience.”

Huawei’s own operating system

The Aito M5 is the first model under the Aito brand, which stands for “adding intelligence to auto.” It’s part of automaker Seres, whose cars have previously incorporated Huawei components, but not design, Yu said.

Seres, also known as SF Motors, is a Silicon Valley-based subsidiary of Chongqing-based automobile manufacturer Sokon, according to the parent company’s website. Seres says on its website it is “positioned to independently build and sell in two of the world’s largest markets, the U.S. and China.”

The HarmonyOS integration with the new Seres car in China is significant as many electric car start-ups have been trying to sell the idea that automobiles will come to resemble the role of smartphones in consumers’ lives. The electric cars each come with a touchscreen for adjusting car functions and listening to music or watching movies.

One of Huawei’s smart watches can also be used as a car key for the Aito M5.

Huawei launched HarmonyOS in 2019 after former President Donald Trump’s administration put the company on a blacklist that restricted American companies from selling technology to the Chinese company, citing national security concerns. Huawei has denied it poses such a threat.

But the blacklist cut off Huawei from Google’s Android operating system. Huawei had begun working on HarmonyOS in 2016.

Yu opened and closed Thursday’s event with the same depiction of the company as a survivor. The presentation on the car took up the last hour of a 2.5-hour event that announced a foldable smartphone, a new laptop and prescription smart glasses.

“Many rounds of sanctions of the past three years have plunged us into the longest winter, because no winter is as long as three years,” he said. “In spite of the great difficulties we have received strong support from consumers and partners across the globe.”

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