BYD to use Huawei’s autonomous driving system on its EVs

• Collaboration with Huawei is a strategic response to the dual challenges of differentiating its product offerings and enhancing its technological capabilities.
• BYD’s dependence on third-party providers for essential intelligent functionalities emphasises BYD’s current challenges in building a comprehensive in-house solution.

In an era marked by rapid technological advancements and an unwavering commitment to sustainability, the electric vehicle (EV) market has emerged as a battleground for automotive giants across the globe.

The recent collaboration between BYD, a leading manufacturer of electric vehicles in China, and Huawei, a preeminent tech conglomerate, signifies a pivotal development.

The strategic partnership, involving the incorporation of Huawei’s advanced autonomous driving system into BYD’s off-road Fangchengbao EVs, is not merely a business arrangement; it represents a fundamental shift in the competitive dynamics of the Chinese electric vehicle sector.

BYD has established itself as a formidable player in the global EV market. The company has thrived through a vertical integration strategy, enabling it to manufacture critical components, such as batteries, in-house.

The approach has granted BYD a substantial cost advantage over its competitors, allowing it to maintain market leadership despite the burgeoning competition.

Facing pressure

However, as the industry increasingly prioritises autonomous technologies and smart driving features, BYD faces a pressing need to evolve. The collaboration with Huawei is a strategic response to the dual challenges of differentiating its product offerings and enhancing its technological capabilities.

The Bao 8 SUV, the first model from the Fangchengbao lineup to feature Huawei’s Qiankun intelligent driving system, is a testament to this evolving approach. Scheduled for release later this year, the Bao 8 exemplifies BYD’s intent to position itself within the premium segment of the market.

However, despite the ambitious goal of augmenting the sales of its premium brands—Denza, Fangchengbao, and Yangwang—these models collectively represented a mere  five per cent of BYD’s total sales in the first half of the year, as indicated by data from the China Association of Automobile Manufacturers.

This stark statistic underscores the urgency for BYD to elevate its product attractiveness to capture a larger share of the upscale market.

Competitive pressures

The partnership with Huawei also highlights the increasing pressures on BYD to enhance its technological competencies in response to a rapidly evolving competitive landscape. While BYD has made significant investments in developing its own advanced driver-assistance system (ADAS), the company has relied on external suppliers, such as Momenta, for critical features in its more luxurious models like the Denza.

The dependence on third-party providers for essential intelligent functionalities emphasises BYD’s current challenges in building a comprehensive in-house solution.

By adopting Huawei’s sophisticated technology, BYD not only gains access to cutting-edge smart driving capabilities but also fortifies its position against domestic and international competitors who are investing heavily in similar innovations.

Huawei’s burgeoning reputation as a key player in the EV sector, particularly in providing ADAS solutions, further complicates the competitive landscape. Notably, the decision by Volkswagen’s Audi to integrate Huawei’s ADAS into its EV offerings for the Chinese market illustrates the duality of the partnership.

While it serves as a critical lifeline for BYD’s technological ambitions, it also enshrines Huawei’s role as a dominant supplier within the automotive sphere, further intensifying the competitive rivalry within the EV industry.

A crucial differentiator

The integration of Huawei’s technologies into BYD vehicles may not only enhance the functionality and safety of its electric offerings but also instill greater consumer confidence in the brand’s ability to innovate.

As consumers increasingly prioritise advanced technological features—such as autonomous driving capabilities—the partnership with Huawei could serve as a crucial differentiator for BYD amid escalating competition.

Looking ahead, the implications of this collaboration transcend immediate product offerings; they signify a broader trend within the automotive industry. As traditional automotive manufacturers pivot towards electrification and smart technologies, strategic alliances—such as that between BYD and Huawei—will likely become commonplace.

These partnerships could reshape conventional paradigms, driving a wave of innovation while ensuring that companies remain competitive in a rapidly evolving market.

Moreover, as BYD seeks to bolster its presence in high-end segments, it will need to effectively communicate and articulate the value added by Huawei’s technology to potential consumers. Marketing strategies will play a crucial role in positioning the Bao 8 SUV and its successors as desirable options within the premium vehicle market, which is increasingly characterised by discerning buyers keen on technological prowess and sustainability.