Huawei Refocuses on Smartphones as Electric-Vehicle Sales Slow

Highlights

Huawei is renewing its smartphone ambitions around devices powered by its own chips, launching the Mate 90 series on Oct. 1. Executive Director Richard Yu said the company hopes to rebuild overseas smartphone share and expand HarmonyOS abroad in the next one to three years. Huawei’s consumer business has recovered from its 2021 decline, reaching around $51 billion in 2025, but its phone push faces a contracting Chinese market. Its vehicle business is also under pressure: Huawei-powered deliveries fell 29% year over year in September, while broader auto and new-energy vehicle sales weakened. Huawei’s strategy now depends on whether its technology partnerships and chip capabilities can support growth beyond China.

Sentiment Analysis

• Overall tone — mixed, leaning cautious: The article describes Huawei’s renewed smartphone effort and the recovery of its consumer business, but places these developments against declining phone and vehicle sales in China. The company’s ambitions are presented as plans rather than confirmed outcomes.
• Positive elements: Huawei has developed its own smartphone chip, intends to expand HarmonyOS overseas in the next one to three years, and reported consumer-business revenue of around $51 billion in 2025. Its auto-tech partnerships have also supported more than 1.56 million vehicle sales since the first Huawei-powered car launched in late 2021.
• Negative elements: Smartphone sales in China fell by a double-digit rate year over year in August and September. Huawei-powered vehicle deliveries dropped 29% in September, and the company remains concentrated in China while other Chinese automakers have expanded exports.
• Sentiment indicator: The neutral-to-negative tilt reflects substantial market headwinds alongside meaningful technological and business opportunities.

Article Text

Huawei is placing renewed emphasis on smartphones equipped with chips developed by the company, as both the Chinese phone market and its vehicle-related business face slower sales. The company released its Mate 90 series on Oct. 1, a public holiday marking China’s National Day. The launch featured Huawei’s own “LogicFolding” chip and represented a prominent effort to tie its handset business to domestic technology development.

Before the launch, Huawei Executive Director Richard Yu told reporters that the company wanted to regain overseas smartphone market share. U.S. restrictions imposed in 2019 pushed Huawei out of a brief period in first place in the global phone market and limited its access to key technologies. Yu said Huawei shipped more than 240 million smartphones in China and elsewhere at the time, against a goal of 300 million units in 2019. The company now sells only several million smartphones outside China each year, he said.

Yu, who chairs Huawei’s consumer business and has often presented the company’s smartphone and car products, also described plans to take HarmonyOS to overseas markets in the next one to three years. He said Huawei hopes China’s chip-manufacturing capabilities will eventually allow the company to sell devices with self-developed chips abroad. The Mate 90 launch press meeting was Yu’s first conversation with foreign media since 2019, the year restrictions blocked Huawei’s access to Google’s Android operating system and semiconductors made by TSMC.

The restrictions significantly affected Huawei’s consumer business, previously its largest business by revenue. That unit’s revenue fell by half to about $34 billion in 2021 from the prior year. It subsequently recovered, reaching around $51 billion in 2025, equivalent to 39% of Huawei’s total revenue, according to CNBC calculations. The renewed smartphone push, however, comes as phone sales in China have weakened. Counterpoint Research reported a double-digit year-over-year decline in the market in August and September.

Huawei has also built a business around electric vehicles through partnerships with several Chinese automakers. Its annual report put revenue from the business at at least $6.7 billion in 2025. Huawei says it does not manufacture the cars; instead, it supplies technology such as software interfaces and driver-assistance systems. The vehicles associated with Huawei have so far been concentrated in China, unlike the rapid export growth seen among some other Chinese electric-car makers.

The broader domestic auto market is also under strain. Data from the China Passenger Car Association as of Sept. 27 indicated that China’s auto market was on track for its weakest year since 2021, with sales down by more than 20% over roughly the first three quarters of the year. Sales of new energy vehicles, a category that includes battery-electric and hybrid-powered cars, fell 13% during that period.

Huawei-powered vehicle deliveries declined for a third consecutive month in September, dropping 29% from a year earlier, according to CNBC calculations based on public figures from the Harmony Intelligent Mobility Alliance, or HIMA. The alliance’s five vehicle lines are produced with partners including Chery and Seres. HIMA delivered just under 37,500 vehicles in September. Since the first Huawei-powered car arrived in late 2021, cumulative sales have exceeded 1.56 million units.

That September result contrasted with the performance of some competitors. BYD, the market leader, recorded double-digit sales gains in each of the previous three months, with monthly sales well above 400,000 units, according to company data. Leapmotor deliveries exceeded 100,000 cars a month from July onward. Tesla China had not reported September deliveries by Wednesday afternoon.

Yu presented the first car fitted with Huawei technology, the Aito M5, in December 2021. Seres Group, the manufacturer of the Aito electric-vehicle line, has faced a separate setback: its Shanghai-listed shares had fallen by more than 60% so far this year. On Oct. 1, Huawei announced a new five-year cooperation agreement with Seres, including the joint establishment of an Aito business team. The agreement extends a central partnership even as vehicle deliveries and the wider market face pressure.

Huawei’s consumer strategy therefore spans two businesses with distinct challenges. Smartphones offer a route to showcase homegrown chips and potentially expand software services overseas, but the company remains far below its earlier overseas scale. In vehicles, Huawei provides technology and works through manufacturing partners, while its associated models remain heavily tied to the Chinese market. Mainland China markets were scheduled to reopen Thursday after closing on Oct. 1.

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