Huawei and JAC developing ultra-luxury EV

01 August 2023

What do you get when one of the world's most innovative tech companies partners with a major player in the automobile manufacturing industry? The answer is shaping up to be a very intriguing and luxurious automobile - the Aito MPV.

Huawei and the Jianghuai Automobile Group Corp (JAC) are reported to be cooking up an ultra-luxury MPV, expected to carry a hefty price tag of around $140,000. According to Ming-Chi Kuo, an analyst with TF International Securities, this plush vehicle might roll out in mass production by the second quarter of 2024. It's no surprise that this high-roller has been compared to Huawei's P/Mate series in the Android smartphone market - the aim here is to appeal to those who appreciate the finer things in life.

This isn't just a collaboration to produce a luxury car. This is a long-term strategic partnership that is central to Huawei's automotive plans. The Aito MPV could serve as a powerful tool to enhance the brand's value, satisfy high-end user demands, and trigger technological innovation. Plus, let's not forget that it's going to be a significant source of revenue for JAC.

Even if we take a skeptical view and assume that the Aito MPV only hits 20-30% of the projected sales in 2024, it would still lead to a substantial revenue boost for JAC, as the analyst points out. So, it's a win-win situation for both companies.

Meanwhile, JAC is anticipated to witness growth in the third quarter and the second half of the year, courtesy of its existing product line. Nio, a primary customer of JAC, is also set to double its shipments in the second half of 2023 - so things are looking up for JAC.

Huawei and JAC's project site is nestled in the JAC Xingang industrial park in Hefei's Feixi county, a part of the Anhui region. This location places JAC within a four-hour traffic circle in the Yangtze River Delta, one of China's most efficient production centers. According to Kuo, this regional advantage is a long-term competitive edge for JAC, offering low transportation costs for EV parts.

But here's where it gets really interesting. In its partnership with Huawei, JAC is not just a silent partner providing factories and manufacturing qualifications, as it did with Nio. Instead, it's eager to learn from Huawei's engineering and development system, thus leading to more flexible cooperation. From developing vehicles to electrical architecture and core systems, Huawei is all set to make a mark.

With a total investment of about RMB 2.6 billion ($363 million), this project could very well change the game for the Chinese auto industry. If all goes according to plan, we could see a variety of models, from sedans, SUVs, MPVs, and crossovers to sports cars being produced, with an annual capacity of 300,000 vehicles.

This Huawei-JAC collaboration is a daring yet calculated gamble in the ultra-luxury EV market. Now, all that's left is to wait and see if this bold move pays off.

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