Chinese telecoms giant Huawei is planning to sell cars in 200 stores by the end of July, and will expand to more than 1,000 stores by the end of the year. Huawei has been looking at other sources of revenue since US sanctions and the global chip shortage decimated its smartphone business, leading to a recent announcement that it would stop making budget smartphones.
In the first quarter of 2021, Huawei's revenue was down a 16.5% year-on-year. Its network business had maintained steady growth, but consumer business revenue had declined, in part as a result of selling the Honor smartphone brand in November 2020.
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In April, Huawei announced that it would sell an extended range electric vehicle – the new SERES SF5 launched by China's automotive company SERES – in its flagship stores across China. These were the very stores that were originally designed to sell its own phones, watches and laptops.
Huawei has made it clear that it does not see itself as a car manufacturer, but aims to be a digital car-oriented components provider that would enable car companies "to build better vehicles".
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Huawei's foray into the automotive sector comes as its smartphone business faces further decline amid US sanctions (opens in new tab) and the global chip shortage (opens in new tab). As a result the company has been forced to look at other applications for its technology, including pig farming and coal mining (opens in new tab).
Despite being a major player in the smartphone arena, particularly with high-end phones such as the Huawei P40 Pro (opens in new tab), Huawei's fortunes have nosedived since falling foul of the Trump administration.
Since being blacklisted by the US as a threat to national security, Huawei found itself locked out of Google's ecosystem and barred from trading with American suppliers – leaving the once cutting-edge company unable to compete on the 5G frontier, as necessary components cannot be imported.