The past few years have been pretty rough for Huawei. For quite a while, the Chinese telecommunications company had been at the top of the game alongside Samsung and Apple, but after former President Donald Trump began focusing on the company, things went downhill quickly. The Chinese tech giant has since faced a wide variety of U.S. sanctions that have almost crippled its operations and removed it from its lofty perch at the top of the telecommunications sector.
In a bid to diversify and keep the profits coming, Huawei has now pledged to invest $1 billion in partnership with major Chinese automakers to develop zero-emission electric vehicles (“EVs”) and smart cars. With several governments across the world looking to replace conventional internal combustion engine (“ICE”) vehicles with electric vehicles, Huawei’s massive investment in green energy and machine learning could pay off.
According to the company’s rotating chairman Erix Xu, Huawei is also looking to develop 5G compatible applications in the software and cloud-computing space to capitalize on the new but increasingly popular 5G technology. Speaking to a group of industry analysts at Huawei headquarters in Shenzhen, Xu said that these portfolio adjustments would help the company weather and ultimately survive the problems it has been facing.
Huawei’s woes began in 2018 when the U.S. government claimed that the massive telecommunications network the company had built around the globe could be co-opted by China’s communist party and used for espionage or sabotage. Although both China and Huawei denied these claims, the U.S. government went on the offensive, locking the Chinese tech giant from the immense American market, denying it access to the global supply chain of mobile phone components, and pressuring allied nations to ban Huawei’s telecommunication gear or outright remove it from their communications networks.
Denied access to the global components supply chain, the U.S. market, and banned from using Google’s Android OS or Apple’s IOS, Huawei sales plummeted in 2020. With its new green-energy plans, the Chinese company is hoping to rise out of the ashes stronger and more profitable than ever. The company will expedite efforts to develop its own mobile phone operating system now that it has been banned from using Android or IOS. Additionally, Huawei is reported to have provided operating components to a new EV model developed by Chinese automaker BAIC as part of its new ArcFox EV line.
However, analysts have argued that Huawei may have a hard time developing a successful mobile phone operating system because of Android and IOS’s stranglehold on the market. Only time will tell how Huawei’s investments in zero-emission vehicles and self-driving EVs will pan out.
It looks like the list of new entrants into the EV space isn’t about to end, not with Net Element (NASDAQ: NETE), a financial value-added solutions provider waiting for regulatory and shareholder approval before it merges with EV auto maker Mullen Technology Inc., also throwing its hat in the ring.
NOTE TO INVESTORS: The latest news and updates relating to Net Element (NASDAQ: NETE) are available in the company’s newsroom at http://ibn.fm/NETE
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