Huawei has lowered its forecast for its car deliveries in partnership with various automakers this year due to worsening supply chain issues impacting the country’s auto industry, according to senior executives.

Details: Speaking to analysts on Tuesday, Huawei’s rotating chairman Hu Houkun confirmed that the company has scaled back its expectations for car sales and is now seeking support and understanding from the auto industry as it “is susceptible to making mistakes” as a newcomer (our translation).

  • Hu also underscored plans to launch new vehicle models with several partners this year, without revealing any further details, and reiterated Huawei’s position to partner with automakers on vehicle technology rather than making its own cars, Chinese media outlet Caixin reported on Wednesday.
  • Hu made the comment a week after Huawei’s chief of consumer and auto business Richard Yu admitted for the first time that ongoing supply chain disruptions, such as microchip shortages and soaring prices, have impacted the firm’s sales targets for its auto business.
  • Speaking to a Chinese auto journalist on April 18, Yu talked about the Aito M5, the first premium electric SUV co-launched by Huawei and its partner Sokon in December, saying that sales of between 100,000 and 200,000 vehicles for the year would likely be a best case scenario.
  • That is a significant cut from its original goal of selling 300,000 Aito-branded vehicles annually, which was announced during a company meeting early this year, Caixin reported (in Chinese).

Context: Sales of the Aito M5 appear to have run into a brick wall, with just over 5,000 vehicles sold during the first quarter of 2022. The luxury crossover, powered by Huawei’s HarmonyOS operating system, was launched at a price of RMB 250,000 ($39,053), but the base model cost will be increased by RMB 10,000 starting from May 5. The companies behind the model blamed soaring raw material costs for the price hike.

  • Meanwhile, Sokon has ended production of the Seres SF5, its first EV model jointly developed with Huawei, after months of lackluster sales. The Seres SF5 sold around 8,000 units in 2021, while EV startups Nio, Xpeng Motors, and Li Auto each recorded deliveries of nearly 100,000 cars.
  • The Chinese telecommunication giant also has plans to launch new EV models with state-owned automakers Changan and GAC this year, although another partner BAIC has not yet delivered new Arcfox-branded vehicle editions beyond the initial standard model, which were set to be equipped with Huawei’s advanced driver assistance system and released last April.

Jill Shen

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: jill.shen@technode.com or Twitter: @yushan_shen