BEIJING (Reuters) -Chinese electric vehicle (EV) giant BYD (SZ:002594) has signed an agreement with Huawei to use the Chinese tech conglomerate's advanced autonomous driving system in its off-road Fangchengbao EVs, Huawei said on Tuesday.
The Bao 8 SUV under the Fangchengbao lineup will be the first BYD model to sport Huawei's Qiankun intelligent driving system and go on sale later this year.
The tie-up follows BYD's efforts to move upscale as it aims to increase the sales of its premium brands of Denza, Fangchengbao and Yangwang to improve profitability. The three brands accounted for just 5% of its total sales in the first half, according to data from China Association of Automobile Manufacturers.
The use of Huawei technology also highlights pressure on the Chinese EV champion to play catch-up against rivals in beefing up smart driving configuration with in-house development.
BYD has dominated the EV market with a significant cost advantage thanks to its so-called vertical integration strategy by making the key components such as batteries on its own.
The company has been investing heavily in developing its own advanced driver-assistance system (ADAS) by hiring thousands of engineers since last year. It still relies on external suppliers for such intelligent features in upmarket models, including using Momenta ADAS in its Denza cars.
The partnership with Huawei also reflected the growing presence of the Chinese tech company in the EV sector as a major supplier of ADAS. Volkswgen's Audi will also use Huawei's ADAS in its EVs for the China market.