(Yicai Global) Aug. 23 -- Huawei Technologies has denied speculation that the Chinese telecoms equipment giant will be one of the investors Changan Automobile is seeking for its new energy vehicle subsidiary.

Rumors that Huawei will invest in Avatar Technology are false, the Shenzhen-based company said on Aug. 20, according to an article in the China Securities Journal.

Market insiders suggested that Huawei and power battery giant Contemporary Amperex Technology would likely invest in Avatar after Changan Auto said in May that the unit would operate independently and would work with Huawei and CATL to build smart electric vehicles. CATL has yet to publicly comment on the speculation.

Huawei has been the subject of frequent rumors about car making, but the firm has repeatedly said that it has no intention to build vehicles and will not take a stake in any automaker. The company has, however, said it plans to help manufacturers with their car production.

Changan Auto is seeking two to five investors for Avatar, the Chongqing-based company said on Aug. 20, adding that an initial public offering is also an option. It will own no less than 39 percent of Avatar after the capital injection, Changan Auto said. Its current stake is 95 percent.

Avatar was founded in 2018 as a 50-50 joint venture between Changan Auto and Chinese NEV unicorn Nio. But Shanghai-based Nio’s shareholding has since fallen to less than 5 percent.

Avatar had no operating income last year and its full-year net loss tallied CNY150 million (USD23 million), per data disclosed by Changan Auto.

Shares of Changan Automobile [SHE: 000625] edged up 0.7 percent to CNY22.6 (USD3.5) today. The Shenzhen Component Index gained 2 percent.

Editor: Peter Thomas