Examples for HEAT weapons are infantry RPGs, ATGMs, and cluster. Like KE weapons, HEAT can’t fire on helos, planes or infantry; only HE damage is used against these.
The formula for HEAT damage is on the surface similar to the one for KE. We start with 1 damage done, and gain 0.5 damage for every point of AP over the target armor.
The first divergence from the KE formula is that after 10 points of AP-AV difference, HEAT starts adding 1 damage for any further overmatch. That is to say, while a 10AV tank will take 1 damage from 10 HEAT AP, 1.5 damage from 11 HEAT AP, and 6 damage from 6 HEAT AP, against 21 AP it will take 7 damage (while 21 KE AP would only do 6.5).
This leads to HEAT oneshotting at 14 AP-AV difference, as opposed to KE where you need 18. This is why 16AP is an important infantry RPG threshold – squads with 16AP can easily defend themselves from the common 2AV transports.
Another HEAT advantage is that it always does at least 1 damage. Lacking AP, a KE gun will simply not shoot. With HEAT, even a 10pt WW2 gun or RPG can harm a superheavy.
The big drawback of HEAT is that it doesn’t gain AP from range. No matter if we’re shooting from maximum distance or in a forest, a 12 AP HEAT weapon stays 12 AP. Tanks with HEAT cannons can be surprisingly underwhelming because of this.
Finally, there’s a little exception to the HEAT damage formula when it comes to high armor values. Due to either a data entry error or an intentional balancing decision, 21AV and up take half a point more HEAT damage than expected from high-AP sources (see the table above). This means 23AV, contrary to naive calculation, will not survive two hits from 30AP plane missiles.
To sum up: HEAT is similar to KE, but will oneshot at 14 points of overmatch due to a higher damage bonus after the first 10 points of AP-AV difference. It always does at least one damage regardless of AP, but does not gain AP from range scaling.