At an event in Chongqing today, Changan Automobile Chairman Zhu Huarong revealed details of the joint venture established with Huawei in November last year.
The joint venture between Changan and Huawei is tentatively named “Newcool” and will focus on seven major business areas. These include Intelligent Driving, Intelligent Cockpit, Intelligent Car Digital Platform, Intelligent Car Cloud, and Intelligent Car Light.
Mr. Zhu reiterated Huawei’s stance that it will not engage in the same business as the production of finished cars or joint ventures.
What is the joint venture between Changan Automobile and Huawei?
In November 2023, a subsidiary of Changan Automobile signed a memorandum of understanding (MoU) with Huawei to provide smart vehicle systems and component solutions. According to the agreement, Huawei will transfer its smart vehicle technology and solutions to the joint venture, and Changan shares will hold up to 40% stake.
Yu Chendong, head of Huawei’s smart vehicle business unit, said the joint venture’s shares will be made available to existing partners and other companies of strategic value.
Huawei’s decision to form a joint venture with Changan Automobile, which ranks as China’s fifth largest automaker with sales of 2.053 million vehicles in 2022, marks a major evolution in Huawei’s automotive business strategy. It shows.
When Huawei’s smart car division was established in 2019, there was speculation that Huawei would launch its own car brand. However, over the past few years, Huawei has evolved its approach in the smart car space and faced many challenges along the way.
How does Huawei cooperate with automakers?
Huawei adheres to the basic principle of not producing its own smart cars and has developed three different models to cooperate with automakers.
Standard auto parts supplier model Huawei supplies automakers with components such as LiDAR, mmWave radar, cameras, in-vehicle TMS power management, and TMS thermal management components.
Huawei Inside (HI) model Huawei provides car manufacturers with full-stack intelligent car solutions, covering key intelligent systems such as intelligent cockpit, intelligent driving, intelligent connectivity, and intelligent car cloud services, as well as a series of components, including more than 30 types of intelligent parts. It means providing.
Changan Automobile’s BAIC Arcfox Alpha S HI version and Avita 11 model use the HI (Huawei Inside) model.
last model, Huawei smart selection model Huawei provides automakers with full-stack intelligent automotive solutions, including product definition, product design, user experience design, and product process design. Although Huawei also helps define products, automakers still lead the way in mechanical parts, chassis components, and tuning of cars.
The Smart Selection model is adopted in the AITO M5, an all-electric/range extender crossover SUV that will be produced by Chinese automaker Ceres in partnership with Huawei under the AITO brand starting in 2022.
The HI model has faced resistance from automakers who feared Huawei would overwhelm a key element of their smart car business. In March 2023, Chinese automaker GAC Group stopped close cooperation with Huawei.
What challenges does Huawei’s automotive business face?
In 2021, when Huawei announced its first partner companies, there were three automakers that adopted Huawei’s HI (Huawei Inside) model, including Changan Automobile’s Avatr, BAIC Blue Valley’s Arcfox, and GAC Group. Aion was included.
Currently, Avatr is the only remaining partner in the HI model. Avatr is an EV brand created by Changan Automobile in a joint venture with Huawei and battery provider CATL.
The auto industry has expressed concern that Huawei’s influential position could cast a shadow on automakers. In August last year, a GAC manager said at an industry forum, “Huawei is a fairly well-known supplier. The quality of the parts is good, but we can’t control the price, and there is basically no bargaining power in cooperation with Huawei.” Stated. . ”
There is broad consensus among automakers that it is not a good idea to outsource the “brains” of self-driving cars — the data and data processing power — to outside companies like Huawei. This stems from the recognition that the core of the HI (Huawei Inside) model involves outsourcing critical self-driving functions to external parties.
In 2021, SAIC Motor’s chairman said at the shareholders’ meeting: “When it comes to autonomous driving, SAIC Group finds it difficult to accept a single supplier that provides a complete solution. “We are souls.” we can’t accept that. ”
SAIC ended up not working with Huawei and instead forged a closer partnership with Chinese self-driving startup Momenta to foster a company under stronger control and its own capabilities to trust.
In the same year, an official from Chinese automaker FAW Group commented that automakers should be cautious when technology companies seek to empower car companies by providing them with the “brains and nerves” of cars. did.
Another Chinese automaker, GAC, chose not to cooperate with Huawei, but the company indicated from the beginning that it had no intention of completely handing over its “brains” to Huawei. GAC has chosen a self-driving path that combines internal research and development with external collaboration. They deepened their collaboration with startup Heduo Technology.
One of the concrete results of Huawei’s foray into the smart car business is the production of the Arcfox Alpha S HI version in cooperation with BAIC New Energy. When released, the Arcfox Alpha S HI version impressed many with its advanced driver assistance features, but sales performance was disappointing.
According to Ark Fox’s official sources, the sales volume of Ark Fox vehicles from January to November 2023 was 3,849 units.
Now, Changan Automobile’s Avatr is aiming for further success. Changan Automobile is targeting annual sales of 90,000 units of Avatre in 2024, which is slightly lower than last year’s target of 100,000 units.
Avita’s official annual sales data for 2023 has not been released, but according to data from third-party platforms cited by relevant media reports, Avita sold approximately 25,000 vehicles throughout the year, which is below its intended target. It’s only a quarter.