Petal to the Metal - How's Huawei Car Business Coming Along?
A Peek at Huawei's Smart Driving Tech and Its Alliance
(Image source: Sina)
Table of Contents
Things that Caught Our Attention
Huawei's Automotive Business Development Phases
How Smart is Huawei's Driving Tech?
Things that Caught Our Attention
This past month, our collaboration with Six Degrees Intelligence, a leader in global expert networks and quantitative research, has delivered groundbreaking bespoke research. Offering tailored research solutions, we provide both firsthand and comprehensive analytical data designed to propel businesses forward. Reach out to team@techbuzzchina.com for strategic, actionable intelligence that can transform your approach.
We're excited to share that the upcoming Spring 2024 Tech Buzz China EV Trip has attracted nearly a dozen seasoned investors from five different countries. With each participant bringing at least a decade of expertise in investing, we're geared up for a journey through the heart of the China EV industry and exploring unique insights & networking opportunities with top industry figures.
The 2024 Beijing Auto Show is taking place from April 25 to May 4, 2024, at the Shunyi and Chaoyang pavilions of the China International Exhibition Center in Beijing. Spanning a massive 220,000 square meters, the event features an impressive lineup of 278 new energy vehicle models. Excitingly, Lei Xing, our partner and the leader of the Spring 2024 Tech Buzz China EV Trip, is in attendance. If you're planning to attend, make sure to connect with Lei (Twitter) for an insider's look at the show! (Source: Caijing)
Recently, media reports stated that Geely's high-end electric vehicle brand, Zeekr, has restarted its plan for an initial public offering (IPO) in New York to raise up to $500 million. This fundraising target is less than the previously set goal of over $1 billion. In a statement to the media, Zeekr confirmed that it has filed with the U.S. Securities and Exchange Commission (SEC) and is preparing for the IPO. Last week, Zeekr introduced its new model, the Zeekr 009 Grand. This MPV (multi-purpose vehicle) is designed to offer a superior ride for business owners and CEOs. Priced close to 800,000 yuan, the company claims 009 Grand aims to be the Rolls-Royce of MPVs in the era of smart electric vehicles. (Source: Securities Times, Huxiu)
In the first quarter of this year, Contemporary Amperex Technology Co. Limited (CATL) saw its adjusted revenue drop 10.41% year-over-year to 79.7 billion yuan, marking its second consecutive quarterly decline. Meanwhile, its net profit excluding non-recurring items rose 18% to 9.2 billion yuan. Following two years of rapid growth, the power battery industry's expansion has stabilized. As the industry leader, CATL is grappling with fierce competition and pressure from downstream customers to reduce prices, which is impacting its performance. (Source: LatePost)
Introduction
A year ago, Tesla initiated a price war that affected the entire industry, putting significant sales pressure on the AITO brand that Huawei and SERES co-developed. Seres Group, initially known as Sokon Group, launched its new energy subsidiary SF Motors in Santa Clara, California, in 2016 and acquired several other new energy firms, including InEvit and AM General.
In May 2018, Sokon transferred all shares of SF Motors to Chongqing Sokon New Energy Automobile, which was established in 2009 and obtained new energy vehicle production qualifications in 2017. SF Motors was renamed SERES in 2018 after launching the brand Jinguo EV (金菓EV). In April 2021, SERES partnered with Huawei to introduce the SERES SF5 electric SUV, Huawei's first smart select vehicle. Later that year, SERES launched a new brand, AITO (问界), with Huawei and introduced the AITO M5, M7 and M9, respectively.
Huawei has developed an ecosystem with automakers, and replicated its expertise from the smartphone market in the automotive sector. Not long ago, AITO announced that it delivered 31,727 new vehicles in March, with a total of 85,842 vehicles delivered in the first quarter of the year. Last year, Li Auto led the "new forces" with sales of 376,030 vehicles in total. Now, the AITO brand has risen to the top of the new automotive forces, leading sales charts for two consecutive months in 2024Q1.
In 2023, Huawei reported sales revenue of 704.2 billion yuan. Of this, the Smart Car Solutions business unit (BU) generated 4.737 billion yuan, marking a 128.1% increase from the previous year. The company highlighted this as its fastest-growing BU, now entering a phase of scaled deliveries.
Yu Chengdong (Richard Yu), Huawei's Executive Director and CEO of the Consumer Business Group and chairman of the Smart Car Solutions BU, revealed that the Harmony Intelligent Mobility Alliance turned profitable in the first quarter of this year; the car division is nearing breakeven and is expected to start making profits in April.
With the launch of the high-profile sedan Luxeed S7 (智界 Zhijie S7) created in partnership with Chery in November 2023, the AITO M9 created with SERES, and its Smart Car Solution Business Unit announcing independent operations at the end of last year, Huawei's involvement in the automotive industry is deepening. Despite Huawei's claim that it "does not build cars," its expanding presence in the automotive sector has made it a significant force in the industry.
In this issue, we explore the strategic phases of Huawei's automotive business development, uncover organizational adjustments within Huawei's Car Business Unit, assess Huawei's intelligent driving technology, and examine the collaborative strategies employed by Huawei as they forge partnerships within the automotive ecosystem. Stay ahead of the curve with Huawei's latest updates and insights. Don't miss out – subscribe now.
Freya Zhang and Ed Sander, Research Editors
Rui Ma, Consulting Editor
(click on the images above for information on the Tech Buzz China team)
Huawei's Automotive Business Development Phases
Although Huawei only established its Automotive Business Unit in 2019, the company began venturing into the automotive sector as early as 2013. Starting with vehicle communication modules, Huawei initially explored Internet of Vehicles technologies. The concept of the Internet of Vehicles (IoV) originates from the Internet of Things (IoT), specifically focusing on vehicles. It involves using the latest information and communication technologies to create network connections between vehicles and everything else (other vehicles, people, roads, service platforms). This connectivity aims to enhance the overall level of intelligent driving and improve the intelligence of social traffic services. For instance, Huawei's first IoV product, the ME909T, is a module that offers high-speed data connectivity, GPS functionality, and compatibility with various network standards for IoT applications and mobile computing solutions.
From 2016, Huawei focused on developing technologies and building an ecosystem around cars, forming partnerships with automakers. With the official establishment of the Smart Car Solutions BU in 2019, Huawei accelerated the implementation of its software and hardware products, deepened its collaborations with automakers, and entered a new phase in its smart vehicle business. A timeline of Huawei's automotive business development is as follows: