Chinese telecoms giant Huawei announced on Wednesday that it had signed a license agreement with a Volkswagen supplier, which will allow its 4G technologies to be used in the German manufacturer’s connected vehicles.

The private group based in Shenzhen (southern China) has been seeking for several months to diversify in all directions because of the American sanctions which disrupt its supply chain and its production of smartphones.

Huawei under American pressure

Huawei touted the new deal as the most important it has ever signed in the automotive sector. The name of the supplier in question and the amount of the transaction were not disclosed, however. The agreement includes a license to Huawei’s 4G patents and will apply to Volkswagen vehicles using wireless connectivity.

The United States, which accuses the telecoms group of being able to spy on Beijing’s behalf, has denied it access to the American market. Washington has also cut Huawei off from its main supply chains and called on its allies to ban or remove its equipment from their telecom networks.

Germany, for whom China is a crucial market for its exporters, has so far not responded favorably to American pressure. The Chinese group strongly denies the accusations of the United States and stresses that they have provided no evidence to support their claims.

The brand is diversifying to circumvent the sanctions

Global juggernaut of equipment dedicated to telecommunications networks and once one of the three main vendors of smartphones, Huawei has been forced to look to other industries in order to survive. For example, the firm has stepped up its diversification into cloud computing (“cloud”) Or connected vehicles, beyond 5G where it is already one of the market leaders.

Huawei also launched its home operating system for smartphones, HarmonyOs, last month after being deprived of a Google-owned Android license following US sanctions.