China's SAIC collaborates with Huawei to address competition from BYD.

      The logo of the Harmony Intelligent Mobility Alliance (HIMA) was showcased in Chinese at the Chengdu Auto Show, held on August 30, 2024, in Sichuan, a province in southwestern China. Credit: Huawei.

      On February 21, Chinese automaker SAIC announced a long-anticipated collaboration with Huawei aimed at jointly developing and marketing battery-powered electric vehicles under a new brand. The initial vehicle is expected to be the most affordable model equipped with the technology company's assisted driving system. Significance: This initiative comes as SAIC experiences a drop in car sales, losing its top position in the Chinese market for the first time in nearly twenty years, falling to second place in 2024, while BYD has taken the lead with sales exceeding 4.2 million units. SAIC’s partners, Volkswagen and General Motors, are grappling with significant challenges due to increasing competition, weak consumer demand, and a slow adaptation to the transition in in-car technology, resulting in a 5.5% drop in sales for their joint ventures with the state-owned automaker, with one of them experiencing a decline of over half last year. Details: According to a statement on the Chinese social media platform WeChat (our translation), SAIC has established a "deep partnership" with Huawei to create new smart electric vehicles that are "globally competitive." The signing ceremony of the agreement on February 21 in Shanghai, where SAIC is headquartered, was attended by SAIC Chairman Wang Xiaoqiu, President Jia Jianxu, and Richard Yu, chairman of Huawei’s Intelligent Automotive Solution business unit.

      While the companies did not disclose extensive information about the forthcoming EV lineup, named Shangjie in pinyin and already a registered trademark of SAIC, the first joint model is anticipated to be launched in the fourth quarter of this year, priced between RMB 150,000 and RMB 250,000 ($20,700 and $34,500), as reported by local financial media, Yicai, last week. This would position it as the most affordable model under the Harmony Intelligent Mobility Alliance (HIMA), under which vehicles typically incorporate Huawei’s mobile operating system, HarmonyOS, and Advanced Driving System (ADS), and are distributed through Huawei’s retail network, according to the report. Context: SAIC joins a growing number of Chinese automakers that are licensing smart in-car systems from Huawei, as these features have become key selling points, particularly among tech-savvy younger consumers. Huawei reported delivering nearly 450,000 EVs branded Aito, Luxeed, and Stelato last year, working with three automakers: Seres, Chery, and BAIC, making its partnership a formidable competitor to major EV players such as BYD and Li Auto. Additionally, the company held a press conference on February 20 for the Maextro S800, the first model from the fourth brand under the HIMA umbrella. It also partnered to create the Avatr brand with Changan Automobile and provides in-car systems to Audi, BYD, and Dongfeng.

      Jill Shen is a technology reporter based in Shanghai, focusing on Chinese mobility, autonomous vehicles, and electric cars. You can connect with her via e-mail at [email protected] or follow her on Twitter at @jill_shen_sh. More by Jill Shen.