Tesla faces yet another EV rival in China as partner of Ford and Mazda teams up with Huawei and CATL to launch the Avatar brand

Avatar will operate as an independent entity, assembling EVs based on the new CHN architecture, according to a statement by Changan Automobile
The smart EV will use Huawei’s Harmony OS and battery packs made by Contemporary Amperex Technology (CATL)

Electric & new energy vehicles

Daniel Renin Shanghai

Published: 4:30pm, 21 May 2021

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Corrected [6:25pm, 21 May, 2021]

[6:25pm, 21 May, 2021]
Corrects venture name throughout story to Avatar Technology from Avita, based on company's statement

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Chongqing Changan Automobile, the state-owned Chinese partner of Ford and Mazda, has added a fourth electric car brand to its portfolio as it joins China’s dominant 5G technology company and battery maker in taking on Tesla in the world’s largest market for vehicles running on non-fossil fuels.

Changan has set up a new unit called Avatar Technology, with stakes owned by Huawei Technologies and Contemporary Amperex Technology (CATL), according to a statement to the Shenzhen Stock Exchange. Avatar will operate as an independent entity, assembling EVs based on its new CHN architecture, using automotive chips designed by Huawei, according to the statement.

“The smart EVs to be fitted with Huawei’s intelligent vehicle technologies and CATL’s batteries will draw rave reviews among Chinese car buyers,” said Peter Chen, an engineer with the car component company ZF TRW in Shanghai. “The two powerful partners are set to help Changan churn out high-performance smart EVs. Competition in China’s premium EV segment will escalate.”

Changan, a laggard behind bigger state-owned carmakers like SAIC Motor or FAW in selling vehicles powered by internal combustion engines (ICEs), is a late comer to an industry where three in five new cars are expected to run on electricity by 2030. Hundreds of assemblers are already vying for market share, a boom that prompted US President Joe Biden to include electric cars in his US$2.3 trillion infrastructure package to bolster the US economy.

Changan’s smart EVs in the pipeline would be launched with a series of car-related products to create a smart lifestyle and clean-energy ecosystem, the company said.

Based in Chongqing municipality, Changan is one of China’s largest carmakers, producing sedans, crossovers and minibuses under its own brands. Last month, it surpassed Geely Automobile Holdings to become China’s largest assembler of light vehicles, with sales of its own brands more than doubling to nearly 474,000 units, according to the China Automobile Dealers Association.

Sales to capacity among China's carmakers, 2019. SCMP Graphics

Changan plans to roll out as many as 26 smart EV models over the next five years, with the first two scheduled to be unveiled this year, the carmaker’s chairman Zhu Huarong said at the Shanghai Auto Show 2021 trade fair last month. Changan already has three EV brands. Avatar would augment Changan’s BenBen E-Star, which replaced the carmaker’s BenBen minicar starting in 2020. Changan also has the Eado EV, an electrified update of its Eado compact car, first introduced in 2012.

Huawei, the world’s largest provider of 5G telecommunications equipment, is also getting into the business of electric cars, provided the connectivity and infrastructure necessary for vehicles to link to the internet, and to each other.

The company last month shed light on its HI intelligent automotive solution, comprising a computing system, a so-called 4D imaging radar, an autonomous driving platform an intelligent thermal management, all powered by Huawei’s Harmony operating system (OS) with 5G connectivity.

CATL, based in Fujian province, is one of the world’s largest makers of EV battery packs, and a supplier to a wide range of big-name car brands from BMW to Tesla.

China’s EV deliveries rose 12 per cent last year to 1.17 million vehicles, as the industry grew from a raft of incentives and government policies aimed at prodding the driving population to replace their petrol guzzlers with vehicles running on batteries.

EV sales could soar to 6.6 million units in China by 2025, or one in four new cars, rising dramatically to 18 million units or 60 per cent share by 2030, according to a March forecast by UBS.

Global EV leader Tesla suffered a setback in China last month as the company faced protests by customers angry over safety and quality of its Shanghai-made vehicles. Its delivered fell 27.2 per cent to 25,845 units in April, down from a record sales of 35,478 vehicles a month earlier.

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