Huawei Technologies Co made a lukewarm foray into electric vehicle (EV) production in 2022, as the US sanctions-hit giant delivered a below target 76,180 cars with partner Aito, amid cutthroat competition and a weaker domestic economy.
Deliveries of the Aito series, which includes three models Huawei developed in partnership with Chinese electric carmaker Seres, amounted to 10,143 units in December, Aito said in a statement on January 1. The December figure, the second-largest monthly delivery in 2022, was up from 8,260 units in November.
Initially launched in December 2021, Aito started deliveries last March, and sold a total of 76,180 units by the end of 2022, according to Aito’s data.
The deliveries achieved compare with an ambitious goal of 300,000 deliveries for 2022, set out by the head of Huawei’s car unit Yu Chengdong in December 2021.
Just a few months later Yu admitted the goal was too difficult considering the unexpected severity of a global chip shortage for the automobile industry.
“It would be a miracle to achieve 100,000 to 200,000 units in the first year,” Yu said in a video interview with Chinese racer and auto influencer Wu Pei in April. “We were new to the industry … we did not know how bad the chip shortage was across the industry.”
The Shenzhen-based tech giant launched two Aito models in 2022, which Huawei helped to sell through its network of bricks-and-mortar stores across China.
The telecoms giant’s high-profile foray in the car business is part of efforts to look for new sales streams after Washington put Huawei on its Entity List over national security concerns in 2019, barring the company from doing business with US firms without a licence and effectively crippling its lucrative smartphone business.
Huawei is expected to report 636.9 billion yuan (US$91.5 billion) in revenue for 2022, flat when compared with last year’s figure of 636.8 billion yuan, according to a new year message by its rotating chairman Eric Xu last Friday.
Huawei’s other automobile efforts include developing and selling smart car systems and components for traditional automakers. Xu said the company will aim to achieve mass commercialisation of its smart car component business.
China’s broader automobile industry has been hit by weaker consumer demand under China’s zero-Covid policy, which resulted in lockdowns and standstill orders across the mainland in 2022. The lockdowns have also disrupted the supply chain for carmakers, including Seres’ manufacturing base in Chongqing.
Aito is also up against fierce competition in China, the world’s largest EV market, where Beijing’s push to encourage the use of EVs has attracted more than 200 companies, with tens of billions of dollars invested in developing, designing, and assembling electric vehicles.
For the full year of 2022, Aito ranked sixth among Chinese EV upstarts in terms of sales, led by Neta, a brand by Shanghai-based Hozon Auto, Beijing-based Li Auto and Shanghai-based Nio, according to delivery figures released by the companies.
However, the sheer size of BYD, the Shenzhen-based EV maker, trumped the crop of upstarts, as its 2022 sales tripled to 1.86 million units, making it the world’s largest seller of automobiles that run on non-fossil fuels.
Keyword: Huawei sees below-target sales for Aito in 2022 after high-profile foray into EV market amid pressure from US sanctions