Huawei Seeks Investment from Audi and Mercedes for Smart Car Software

Dec 13, 2023 07:18 PM EST

AUDI CAR INTERIOR — (Photo : PEXELS/PIXABAY)

Huawei, the well-known Chinese smartphone giant, is actively looking for ways to grow its impact outside of China. Audi and Mercedes are two of the biggest car companies in Germany. Reports say that Huawei is in talks with them to see if they can work together on smart car software.

Huawei Taking Bigger Steps

In order to break away from its current ties with only Chinese automakers, the company is taking this step. Huawei is a big name in the smartphone business and also makes items for telecommunications. It is now moving into the market for software for cars.

As shared in Electrek's report, Huawei's ambition to extend its footprint in the automotive sector is evident as it already provides vehicle software to several prominent Chinese OEMs, including Seres Group, Changan Automobile, Arcfox, and even its own joint ventures like Luxeed and Avatr.

Electreck alsp cited Automotive News Europe report, Huawei is inviting Mercedes and Audi to consider investing in its automotive technology division, potentially setting the stage for collaborations in the realm of software. As part of these agreements, Huawei's in-vehicle operating system and possibly its artificial intelligence suite could be used by Audi and Mercedes.

There were earlier rumors that Huawei was thinking about selling off its full automotive business unit. This is likely because the company is trying to keep the division separate from Huawei itself because of the harsh US sanctions that are still in place against the company.

Electrek shared its two cents about this latest venture of Huawei. Electrek stated its familiarity with the company's struggles in the international market. Furthermore, it believes after sever sanctions Huawei' s global presence seems to instantly vanish.

For Electrek Huawei has a lot on its plate considering the many businesses it operates. Therefore, the effectiveness of its in-vehicle software is another question. Furthermore, it suspects that the brand does not expect Western manufacturers to adopt this software in cars they sell in their home market, but for the cars they sell and co - manufacture in China.

Nonetheless, as this offer is still on the table, everyone are still waiting whether such partnerships will be possible in the near future.

How Audi and Mercedes Answer

According to information reported by The Truth About Cars via Reuters, the firm, which has been under American sanctions for approximately the past five years, has initiated initial discussions with Mercedes with the aim of granting them control of a stake ranging from 3 to 5 percent in Huawei's Intelligent Automotive Solution (IAS) business division.

Analysts estimate the total value of this collaboration at approximately $30 billion, which would make even a five percent ownership share worth over a billion dollars. However, it appears that the German company has declined the offer, expressing a preference to maintain control over its own software development rather than entrusting it to an external supplier.

No one has said anything public about this possible collaboration, which is to be expected. Neither Merc nor Audi, nor even Huawei, have said anything.