In some parts of China, local governments are offering cash subsidies to people who buy electric or plug-in hybrid cars powered by Huawei software. Experts say the deals are fairly unusual.
Since May, at least 10 Chinese provincial and municipal governments have announced consumer subsidies ranging from 2,000 to 5,000 RMB (about $280 to $700) per car, according to social media posts collected by WIRED. The exact amount and conditions vary, but they all have one thing in common: The rebates can only be used to purchase a vehicle that runs Huawei’s HarmonyOS operating system and its autonomous driving system.
The Chinese government has subsidized electric vehicles since 2009, helping drive the country’s rapid adoption of them over the past decade. But those incentives, both on the national and local level, were phased out two years ago as the government urged auto companies to reach profitability on their own. But even during the heyday of EV discounts, experts say they were never explicitly restricted to a single company.
It’s not uncommon for local governments to support homegrown auto companies by introducing favorable policies or procuring EVs for their taxi fleets, says Tu Le, the founder of Sino Auto Insights, a consultancy that specializes in the Chinese automotive market.
“But are they writing a check to a consumer to subsidize the price of a vehicle? I don't think they're doing that,” Tu says. Regional governments are currently cash-strapped amid a cooling economy in China, and Beijing has also restrained them from providing too much assistance to private companies, which makes the recent Huawei subsidies stand out even more.
Tu cautions that the local government initiatives may not necessarily be tied to Huawei directly. The tech giant works with a wide range of Chinese OEM companies based in different provinces, and it’s not unusual for their downstream suppliers to have strong relationships with local officials, who often want to ensure their businesses succeed.
Most of the announcements stop short of saying who’s actually footing the bill, which has led to confusion among both car buyers and industry observers. But some posts made it clear that the government is not paying for it: An announcement by the Yunnan Provincial Department of Commerce on July 11, for example, said that the $420 subsidy was “covered by the local Harmony Intelligent Mobility Alliance–affiliated sales companies.” Similar language has been posted by authorities in Guangzhou and Hulunbuir, a city in the northern province of Inner Mongolia.
It remains unclear which company or organization is actually funding the discounts in every case. It could be Huawei, as all the announcements clearly benefit it, or one of the auto manufacturers that have partnered with it and uses Huawei’s smart driving technologies.
Since Huawei was heavily sanctioned by the United States during the first Trump administration, it has made a point of stressing that it operates as a private company separate from the Chinese government. But the latest auto subsidies are arguably now muddling the water. While some government announcements suggest the subsidies may actually be coming out of Huawei’s own pocket or that of its partners, it still appears they are getting preferential treatment from local governments while its competitors aren’t.