Huawei auto solutions unit value surged to $16 billion, after Avatr cooperation

Huawei and Avatr signed a strategic cooperation agreement that ultimately surged the value of the former’s smart auto solutions unit by $16 billion. It’s a major achievement for the Chinese tech giant in its automobile solutions business this year.

On August 20th, Avatr and Huawei inked a strategic agreement. Under this deal, the former will purchase 10% stakes in the Huawei Newcool smart car solutions unit.

The value of these stakes is 11.5 billion yuan. As per a filing by Changan Auto, Avatr will pay this amount in three installments based on the OEM’s condition for the business. The auto brand can further elect a director to Newcool’s 7-member board.

Apart from the 10%, the rest of the 90% stakes will remain in Huawei’s hands. With new cooperation, the Huawei auto solutions unit value is touching heights in the market. Its valuation now increased to $16 billion which is a breakthrough for the firm.

Huawei is constantly teaming up with new partners to expand its legs into the Chinese automobile market. This effort will eventually contribute to the economic development of the native region. Plus, a strong EV solutions business will strengthen the company against other odds and challenges due to the U.S.-China war.

Regarding the smart car business, the company has stated multiple times that it won’t jump into the ‘car building’ lane. During the AITO transfer, the OEM again said that it would be a smart car solutions supplier rather than a car manufacturer.

With a new partnership in the Newcool smart car solutions unit, Huawei will likely develop more advanced techs and capabilities for its EV partners to pace ahead in the Chinese automobile market.

[Source – Bloomberg]