The valuation of Huawei Technologies Co. Ltd’s smart car unit has surged to 115 billion yuan ($16 billion) only seven months after its launch, following a recent investment.
Yinwang Intelligent Technology Co. Ltd., a wholly-owned subsidiary of Huawei founded in January, has agreed to sell a 10% stake to Avatr Technology Inc., an electric vehicle (EV) startup backed by China’s state-owned automaker Chongqing Changan Automobile Co. Ltd. (000625.SZ) and battery giant Contemporary Amperex Technology Co. Ltd. (CATL)
Avatr agreed to pay 11.5 billion yuan for the stake, with the payment to be made in three installments, contingent on conditions such as the introduction of Huawei’s smart car technologies and talent to Yinwang, according to a filing by Shenzhen-listed Changan Auto. Avatr will also have the right to nominate one director to Yinwang’s seven-member board.
The investment will enable Avatr to directly engage with Yinwang at the business level, a person close to Changan Auto said. Avatr has been a close partner of Huawei, equipping its vehicles with Huawei’s smart car solutions.
Avatr is 41.4% owned by Changan Auto, followed by CATL with 15.56%. Its other investors include the Chongqing municipal government and Changan Auto’s sibling company South Industry Assets Management Co. Ltd.
Huawei established Yinwang, which is dedicated to developing intelligent car systems and components, with a registered capital of 1 billion yuan. Its business scope includes smart in-car equipment production, auto component development, artificial intelligence-powered application system integration services and algorithm software development, according to corporate database Tianyancha.
Yinwang is part of Huawei’s latest push to grow its fledgling smart EV business as a new revenue driver to offset the effect of U.S. sanctions on its other businesses.
Huawei in November unveiled plans to create the new company and said it will be open to investment from its auto partners and other carmakers.
Changan Auto had signed a memorandum of cooperation with Huawei to invest in up to a 40% stake in the company. The Chongqing-based automaker can be seen as an “angel investor” of Huawei’s new company, the person close to Changan Auto said. It has tied up with Huawei in the smart driving space, involving its two EV brands — Avatr and Deepal.
It is unclear whether Changan Auto and its other subsidiaries will invest in Yinwang.
Seres Group Co. Ltd., another close partner of Huawei’s EV business, in July said it also planned to invest in Yinwang. Details have yet to be finalized, including the size of the investment, Chongqing-based Seres at that time.
Contact reporter Han Wei (weihan@caixin.com)
