Huawei shifts up a gear with China’s EV sector

• Huawei unveils another bumper set of financials in its latest annual report 
• Of particular note is the significant growth of the Chinese vendor’s Intelligent Automotive Solutions unit 
• Huawei is now looking to ramp up its electric vehicle (EV) component investments

Huawei's detailed financial results for 2024, published in the vendor’s annual report, revealed a staggering increase in full year revenues of 862.1bn yuan ($118.2bn), a 22.4% year-on-year rise, its fastest rate of growth in five years. It also highlighted the traction that Huawei is gaining with its Intelligent Automotive Solutions unit.

The sales growth was expected: In February, the company’s chairman gave an indication of just how good 2024 had been for the company, but he only revealed the top-line number – see In spite of US sanctions, Huawei is thriving.

Now the details are available. While overall revenues were up sharply, operating profit dipped by 24% to 79.4bn yuan ($10.88bn) as operating expenses increased by 9.8%, driven by a 9.1% increase in research and development (R&D) investments to 179.7bn yuan ($24.72bn) and a 10.9% increase in selling and administrative expenses to 131.85bn yuan ($18.14bn). 

Huawei invested 20.8% of its revenues in R&D, much higher than the industry average. The vendor noted in its annual report that it “continued to increase investment in future-oriented basic research and innovation in domains such as AI, foundational technologies, and intelligent vehicles. We also continued to invest in the development of new business domains and ecosystem building, and our operating efficiency increased thanks to ongoing transformation.”

The investment in intelligent vehicles appears to be paying off. Its Intelligent Automotive Solutions business division reported revenues of 26.35bn yuan ($3.62bn), a 474.4% increase from the 4.7bn yuan ($647m) generated in 2023. 

All the business groups grew revenues in 2024. Its ICT Infrastructure division (networking technology) generated revenues of 369.9bn yuan ($50.9bn), up 4.9%, while its consumer business (including smartphones) reported revenues of 339bn yuan ($46.65bn), up 38.3%, despite tighter US export controls. 

But it’s the auto group that’s worth keeping a particular eye on. Huawei noted that during 2024 it launched “a series of solutions centered on intelligent driving. Huawei ADS and HarmonySpace Cockpit continued to bring more consumers a superior driving experience, and the Huawei Vehicle Control, Huawei Automotive Optics, and Huawei Vehicle Cloud businesses developed rapidly. Throughout the year, we shipped more than 23 million sets of intelligent automotive components. We also continued to work with more than 600 partners along the value chain to provide car OEMs with quality, intelligent automotive components that offer premium experiences.”

Huawei is not alone in targeting this sector. As we reported last month, contract design and assembly specialists, in particular Taiwan’s Foxconn, are also keen to become big players in the EV and connected car market where they can apply their expertise in contract manufacturing and chip knowhow to act as something akin to Google’s Android for cars – orchestrating the auto functions and performing the component integration. 

According to Nikkei Asia, Huawei maintains it’s not aiming to manufacture Huawei-branded cars – that ship probably sailed with the failure of Apple to follow through with an Apple car several years ago. Instead, it says it will continue on its current track of providing integrated solutions for Chinese auto-makers, such as BYD (which just surpassed Tesla as the leading global EV-maker), GAC Group and Dongfeng Motor. Huawei provides some of the high-value goodies, such as smart control systems, self-driving capabilities and smart cockpit features, for a good proportion of China’s highly successful EV industry.

Staying in this lane, rather than seriously tackling contract manufacturing, is probably the best position for Huawei for the time being (and an approach less likely to upset its important car customers). US action against Huawei, by targeting its telecom infrastructure business to starve it of advanced hardware and key software, certainly had a devastating effect initially, but Huawei has used the technology shock of US sanctions as an inflection point to regroup, develop its own silicon replacements and push on with refining its Harmony smartphone operating system. So not only has the US action not had the desired effect from the US point of view, but Huawei, happily touting 5G standards, is once again growing and has managed to maintain its position as the leading global telecom infrastructure vendor.

– Ian Scales, Contributing Editor, TelecomTV