Huawei Joins Hands with 18 Car Companies to Create a ‘5G Automotive Ecosystem’

Technology, Automotive Author: Dixuan Lu Editor: Luke Sheehan May 12, 2020 02:27 PM (GMT+8)

With the rapid development of the Intelligent Connected Vehicle (ICV) market in China, large companies will capture advantages through their resources and networks.

Car. Image credit: Evgeny Tchebotarev/Unsplash

► The ecosystem will accelerate the commercialization of 5G technology in the automotive industry and jointly create impactful 5G vehicles.
► Looking into the penetration rate, the ICV is developing rapidly, and the market size has been predicted to exceed CNY 100 billion by the end of 2020.

According to Huawei, it has joined with a batch of 18 car companies, including FAW Group (Faw-hongqi, Faw-benteng, Fawjiefang), CHANGAN, Dongfeng Motor Corporation (Dongfeng Passenger Car, Dongfeng Sokon), SAIC Motors (SAIC Passenger Cars, SAIC-GM-Wuling) and other up-and-coming brands. They officially announced the establishment of a ‘5G automotive ecosystem’ to accelerate the commercialization of 5G technology in the automotive industry and jointly create exciting new 5G vehicles.

5G vehicle development has become a strategic hotspot for innovation in the automotive industry. The high speed, low latency and high reliability of 5G technology will open up new imagination spaces for scenarios such as:
1)    Information and entertainment. With the improvement of cellular network performance and the increase of coverage, user acceptance has improved, and multimedia, games, and other interactive content have become more and more diverse.
2)    Navigation and journey. Use a combination of emerging technologies, and through a large number of instant messaging updates, generate high-definition 3D map information and also Networked danger map system, improve the function of car navigation.
3)    Traffic control. It can bring many benefits to the driver, including receiving the latest traffic information, providing traffic status advice or danger warnings.
4)    Autonomous driving. Vehicles will interact with each other and the environment to assist the driver. 5G is necessary for L4 and L5 self-driving.
The new driving experience and entertainment experience, as well as the entire environmental experience of connected cars and homes, are the key points of future innovation of 5G vehicles and the direction that many car companies and Huawei are working towards together.

In recent years, the Chinese ICV industry has been developing rapidly, and the next two years will be essential for 5G vehicle's eruption. On the one hand, the penetration rate. Data from the 'Report on the Fusion Development of Chinese Automobile Enterprises and New Generation Information Technology (2019)' by and National Industrial Information Security Development Research Center shows that, in 2018, the penetration rate of new ICVs reached 31.1%, an increase nearly five times the rate of 2016.

Among them, the penetration rate of new models of Chinese brands accounted for 35.3%, a 15-fold increase from 2016. It is worth mentioning that the function of ICVs is penetrating from high-end and luxury models to ordinary models. It is expected that the penetration rate of orders from potential customers of ICVs in 2019 will reach 36.4%. The report predicts that, with the acceleration of the launch of new models of ICVs and the increase in recognition by potential consumers, the penetration rate of ICVs will further increase, which will reach 51.6% in 2020. On the other hand, the ICV market is scaling. 

According to data from Bain & Company, in 2016, the global autonomous car market size reached around USD 8 billion, expected to reach between USD 22 and 25 billion by 2025 with low and high performance respectively. 

In terms of ICVs, Miao Wei, Minister of the Ministry of Industry and Information Technology of China, said: "by 2020, the market size may reach more than CNY 100 billion."

Besides, Banma, jointly established by Alibaba and SAIC, is a powerful competitor for Huawei in this field. In related news published by EqualOcean, the firm is described as having covered 400,000 ICVs by December 28th, 2017. Banma has been embedded in cars, such as SAIC Skoda, RX5 and so on, and also signed strategic agreements with car companies like Chinese Dongfeng Peugeot Citroen Automobile Company LTD.

At this stage, Huawei has established an ecosystem with 18 car companies and Banma's VENUS system has been carried in more than 400,000 vehicles. It may cost a lot and be difficult for Huawei's system to adapt to various cars, but in the long term, it will be beneficial to the firm to achieve advantages in the ICV field. For Banma, it established the Automobile  Ecosystem gradually and still needs to quickly expand its vehicle network to catch more market share in the future. Other than that, other large companies are powerful competitors, such as Tencent, which launched its TAI 3.0 in-car intelligent system on January 7, 2020 and cooperated with 16 car companies by data in 2018.