One thing is for sure; China has its eyes set on Europe as the second-in-command of the Western world. When it comes to technology, our continent excels in two industries: semiconductors and automobiles. The former is still far off for Xi Jinping’s nation, but in the latter, they are shaking things up, coming up from the bottom at a pace that no one, except Tesla, is keeping up with. As such, the next logical step is obvious: trying to invest in major car companies, specifically, Huawei is eyeing Mercedes and Audi.
The Chinese are no fools. Quietly and with millions of dollars on the table, they acquired Volvo and now they are aiming for two wounded wolves: Mercedes Benz, but especially Audi. While Mercedes Benz is getting back on track and moving fast, Audi’s situation smells like the downfall of a giant, and China knows it.
Huawei wants to enter Mercedes and Audi with its software and hardware
China is buying everything, and Europe is not protecting itself. However, we are catching up rapidly, and it may not be too late. The electric car has caught the EU and its companies off guard, while China, which moves faster and has a more long-term vision, is dismantling our industry. Brands that could compete with price/quality, such as SEAT, are being liquidated.
Even Dacia is not safe. Imagine the entry-level electric car market in Europe with traditional brand prices of just over 20,000 euros: it is nonexistent. In the high-end or premium range, Huawei wants to buy small stakes to get involved in the hardware and software segment of intelligent automobiles and expand its catalog outside China.
This comes after Huawei spun off its Intelligent Automotive Solutions (IAS) business a month ago, aiming to become the dominant player in global hardware and software for electric vehicles.
IAS (Huawei) is now worth between 28 billion and 35 billion
We must not see this Huawei subsidiary as something small but as a giant now walking more alone. Reportedly, the Chinese company recently approached Mercedes Benz, and two sources claim that a 3% and 5% stake was offered. However, the Germans are not interested, as they prefer to continue with their hardware and software instead of hiring a supplier – a logical decision since they dominate the global market above Tesla. But Audi…
Audi, and the VW group in general, but specifically this premium car subsidiary, are in a very difficult situation. Without their electric cars to present in 2024, they had to buy a Chinese model to have some launch. Unthinkable just a year ago. Two sources have remarked that Audi has listened to Huawei and plans a partnership to develop autonomous driving technologies for the Germans.
As there are no electric car projects, despite the pressing need in 2024, the technologies would not arrive in Europe but China, by 2025. German engineers would then learn from the Chinese and begin their journey.
In fact, the VW group as a whole had to do something similar with Xpeng.
China wants to be independent and invests heavily to capture the global market
In contrast, China’s largest EV brands, such as NIO and BYD, have their hardware and software, while Europe mostly relies on American companies like Google, Qualcomm, or MediaTek, to a lesser extent. Is the Volkswagen group doomed? Can Mercedes Benz, Audi, or BMW compete with the push from Chinese brands without Huawei or Google? And finally, can generalist European brands start manufacturing electric cars for 20,000 euros or less within a maximum of two years?
The industry is at stake at all levels, and time will tell whether Europe will sit back and die or emerge as the giant it once was.
This article first appeared in El Chapuzas Informático, titled “China wants to take over part of the European car industry: Huawei approaches Mercedes and Audi.”