Typically, Chinese technology conglomerate Huawei makes the news because of the robust sales of its handsets or controversial telecommunications equipment. However, the firm has a host of business interests, including laptop manufacturing and smart glasses. Now, the company’s taken steps to further its interests in the self-driving vehicle industry.
Last week, Huawei announced it would use Chinese cartography firm NavInfo Co. Ltd.’s high-definition map data in its autonomous cars.
Why Huawei is Partnering with NavInfo Co. Ltd
Primarily, Huawei has taken up with NavInfo to avoid a major regulatory hurdle.
In the United States, self-driving car companies usually only need to secure approval from state regulators to begin developing their products. Most often, autonomous vehicle firms are required to label their transports and employ safety drivers. However, in China, the laws governing the industry are more complicated.
The main issue is Beijing considers digital cartography of the country’s roads and infrastructure a threat to national security. Indeed, the Chinese Communist Party doesn’t want private firms collecting data on bridge heights and road gradients. As such, only a handful of companies backed by huge Sino conglomerates like Alibaba and Baidu have been granted licenses to create high-precision maps.
Notably, NavInfo has a digital cartography license and can provide local firms with map data. Since having detailed topographical information is essential to compiling a functional self-driving artificial intelligence, Hauwei needed a partner. Otherwise, it would need to endure a lengthy bureaucratic process to secure its a mapping license. In this instance, the Sino handset maker chose the path of least resistance.
Why Huawei’s Breaking into Self-Driving
Consulting firm McKinsey estimates the Chinese self-driving car market to be worth around $60 billion. With that kind of money on the table, the firm has a significant incentive to open a segment. Moreover, the firm has two advantages that might help it dominate the local autonomous vehicle sector.
In May, the U.S. Department of Commerce put Huawei on its Entity List, meaning most American firms could no longer trade with the Sino firm. The federal government took action because it believes the corporation’s ties with the Chinese government make it a threat to national security. Washington also pushed its international allies to adopt its blacklist.
Despite the U.S. government’s efforts, Huawei has generated record income since this summer.
The conglomerate found success despite international headwinds because of a rather ingenious advertising campaign. The firm used its U.S. blacklisting is a marketing hook. In China, Huawei’s handsets have been positioned as the patriotic citizen’s smartphone maker of choice.
Also, with the U.S. China trade war seemingly nearing its end, the firm might soon be able to use high-grade American software and components to get an edge on its domestic rivals. If nothing else, Huawei will definitely want more chips from its trade ban exempt partners Micron and Qualcomm.