The two will build luxury smart connected EVs based on Huawei's smart car solutions, with product development under the overall responsibility of JAC.

(Image credit: CnEVPost)

Nio's (NYSE: NIO) automotive manufacturing partner, Anhui Jianghuai Automobile Group (JAC), has signed a deal with the Chinese tech giant Huawei to jointly build electric vehicles (EVs).

JAC and Huawei signed the deal today in Hefei, Anhui province, where the automaker is headquartered, and will collaborate on product development, manufacturing, sales, and service based on Huawei's smart car solutions, according to a stock exchange announcement by JAC.

The goal of the two is to create luxury, smart, internet-connected EVs and to meet the higher needs and expectations of users through continuous upgrades of the joint models, JAC said.

The product development of the models will be under the overall responsibility of JAC, and the carmaker will create an advanced production base to utilize its capabilities in the manufacturing sector, according to the announcement.

JAC agreed that Huawei or a third party designated by it will exclusively provide sales services for the joint models globally, and the export business for the models is subject to agreement between the two parties.

The agreement is valid for 10 years from the date of signing, and it will not affect JAC's operating results and financial position in 2023, according to the announcement.

JAC did not mention further details, including whether it and Huawei will set up a joint venture or the timeline for product development.

In the automotive sector, Huawei has already partnered with car companies including Seres Group and Chery to produce cars.

In April, a report by local media outlet 36kr said Huawei and JAC would jointly build models aimed at the ultra-high-end luxury EV market, with a price range of around 800,000 yuan ($112,040) - 1 million yuan.

In the EV era, JAC's more familiar identity is as Nio's vehicle producing partner. However, in its cooperation with Nio, JAC only provided factories and car-making qualifications, and did not participate in the development of vehicles, 36kr's report noted.

In its cooperation with Huawei, JAC was interested in learning from the tech giant's engineering and development system, and thus opened up more flexible cooperation space to it, according to the report.

On August 1, Ming-Chi Kuo, an analyst at TF International Securities, a well-known tracker of Apple's supply chain, said in an article posted on Medium that Huawei was working with JAC to develop an MPV model priced at nearly RMB 1 million.

The model is expected to be mass-produced in the second quarter of 2024, with a shipment target of about 50,000 units a year after launch, Kuo said at the time.

($1 = RMB 7.1405)

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