Chinese EV firm AVATR Technology — backed by state-run automaker Chongqing Changan Automobile — is buying a 10% stake in Huawei’s new auto parts firm for 11.5 billion yuan ($1.6 billion).
The new firm, Shenzhen Yinwang Smart Technologies, which engages in the R&D, production, and sales of intelligent automotive components, signifies Huawei Technologies’s further push towards the competitive EV sector. Huawei will hold the remaining 90% stake upon completion of the financing, according to an exchange filing on Tuesday.
AVATR Technology, which also counts EV battery giant Contemporary Amperex Technology (CATL) as one of its backers, will work with Yinwang in the areas of branding, ecosystem building, cloud & artificial intelligence (AI) technology, among others, alongside the investment.
Set up by Huawei Technologies in January, the seven-month old firm was intended to be the spin-off of the tech giant’s Intelligent Automotive Solutions (IAS) business unit, according to an investment memorandum signed with Chongqing Changan Automobile in November 2023.
As of Tuesday, the assets have not yet been transferred to the Yinwang, per the filing. The transfer will take place after receiving the first tranche of investment from AVATR, the filing added.
The IAS unit was Huawei’s fastest-growing business segment by revenue growth in 2023, raking in revenue of around 4.7 billion yuan in 2023, up 128.1% year-over-year, according to Huawei’s 2023 annual report.
“In 2023, intelligent electric vehicles (EVs) continued to gain traction in China, with a penetration rate exceeding 35%. Intelligence and connectivity have gradually become differentiating factors for vehicle performance,” the company said in the annual report.
Most recently, Shanghai-listed automobile maker Seres Group also announced its interest to invest in Yinwang, according to a stock filing dated on July 29. However, the firm has not finalised the details of the investment.
