The car, Huawei's "original sin"?

On the evening of April 1, in the Huawei store at Beijing's Hopscotch, the label "HUAWEI Qijie" was torn off the front of the Qijie M5 show car, just 24 hours after Ren Zhengfei's statement that he wouldn't be building a car in five years.

The label was put up less than a month ago, and in early March, "AITO Qijie" was renamed "HUAWEI Qijie," and now it has received an order to "remove it overnight.

Also on the same day, Yu Chengdong, who was pushed to the forefront by the statement of "not building cars," attended the China Electric Vehicle Association, where those online speculations were not confirmed, and Yu once again emphasized that "Huawei's Logo has been speculated on the Internet, but in fact Huawei has always insisted that it doesn't build cars, and that it wants to help car companies build good cars.

"Has been insisting not to build cars", it seems from Huawei's involvement in the automotive business since up and down the repeated emphasis on the topic, it seems to build cars has been the outside world "wishful thinking" speculation. Then in the end who wants to build a car? Is building cars Huawei's 'original sin'?

Huawei is being roasted on the fire, what did you do wrong?

"We were trying to call Askworld Huawei Askworld and make it an eco-brand for us." "Some leaders had a different opinion, so they came out with a document that canceled out 'HUAWEI', but in fact the essence didn't change."

At the China Electric Vehicle 100 meeting, Yu Chengdong responded to the furore over the renaming of Askworld during this period. Some people say that Yu big mouth is Huawei's 'infighting' on the stage, in fact, from the beginning of Huawei into the automotive circle, the Internet has been circulating a 'horse racing mode' argument, although it has not been confirmed, but Huawei's strategy of multiple lines of parallel entry into the automotive industry has always existed.

In 2021, at the Shanghai exhibition where Huawei formally announced the launch of the SF5 smart car with Ceres, I was invited to attend two Huawei launches, a consumer-oriented launch of the Ceres SF5, and a B-side launch of the Huawei Smart Car BU.

(Huawei's two launch events during Auto Shanghai 2021)

Different organizers, different styles and positioning, representing Huawei's different routes into the automotive world:

One is the parts supplier model, providing standardized parts;

The second is the HUAWEIi Inside model, providing full-stack solutions for smart cars, targeting the B-end.

The second is the HUAWEIi Inside model, which provides full-stack solutions for smart cars and is oriented to B-end car companies, and the models derived from it are the BAIC Extreme Fox Alpha S HI version and the Avita 11 HI version;

The third is the Huawei Intelligent Vehicle model, which provides support for parts and solutions, and is y involved in the whole process of the product, directly oriented to the C-end consumers, and the models derived from it are the later Inquiring World series.

But for consumers, such a complex business model is not easy to distinguish. Although Huawei has emphasized n times that it doesn't build cars, in the eyes of consumers these models have all been given the name "Huawei's car", and the best-selling end label in the orange shopping software has become "HUAWEI" for a while.

Not only consumers, the industry is also the same "confused": 2B2C double eat players, in addition to Huawei so, the rest is Baidu, but it seems to be the same as Huawei by the outside world's suspicions: HI mode and the wisdom of the car mode what is the difference between the 2B and 2C business will not grab each other customers? Huawei's entry into the automotive industry, in the end, is to rob the intelligent incremental market? Or is it going to steal the rice bowls of automobile enterprises? ......

The result of a series of suspicions, prejudices, and attempts at new cooperation modes is that on the side of the HI mode, Wang Jun, the person in charge of the original HI mode and the former president of the car BU, was suspended at the beginning of 2023, and the original partner, Guangzhou Automobile, terminated the cooperation in the HI mode; and on the side of the smart car mode, after the opening of the year, Huawei's 2B and 2C business will not steal each other's customers. On the other hand, on the other side of the car model, after a year of promotional offers and the renaming of the car model "HUAWEI Qijie", the sales of the car model "Qijie" fell back and entered a bottleneck.

If the outside world does not immediately dispel the speculation that Huawei is "building a car", the fire that is now roasting Huawei is about to burn to the eyebrows.

It's so hard to understand that it doesn't make cars?

In 1997, Huawei's telephone division first developed the earliest domestic digital telephone. But because the product is outsourced, the quality can not control, frequent failures, complaints, repair, so that Huawei's reputation has been dragged down.

Ren Zhengfei at the time shot up:"Huawei will never make a cell phone again, and whoever mentions making a cell phone will be laid off!

Does this history seem familiar? Of course, more than a decade later, in 2011, Huawei eventually chose to do terminal cell phone business. But in 2011, Huawei's technology accumulation, the market demand for cell phones, and even the definition of cell phones as a product had already changed dramatically.

If there is no such experience, there should not be so many voices crying out for Huawei to build its own car. "If you can build a cell phone, why can't you build a car?" Congratulations, Lei Jun thinks so too.

The cell phone circle back then was popular with the expression, "cell phone terminal industry, get the core to get the world". The core technology represented by the chip, operator resources and product definition capabilities, is the lifeblood of the cell phone; as for manufacturing, Apple and Foxconn's OEM model will not affect the quality of iPhone products in any way.

But when it comes to the complexity of the industrial chain tens of times hundreds of times to build a car, it's not that easy. The simplest example, the early OEM model to start a few new forces, the first thing after the beginning of the scale, is to set up self-research team and self-built production line, my core technology and vehicle production in their own hands.

So Huawei if the field to build cars, the first step to make up for the blank experience in the field of traditional enterprises. It is revealed that Huawei's annual investment in the smart car business is more than 10 billion; if you want to build your own car, this investment should be more than doubled.

As for revenue, just past 2022, Huawei intelligent car BU revenue of 2.1 billion, which is built on the AITO ask the world this series debut in the first year sold more than 70,000 units. If Huawei's own car is launched, how much higher will the sales be than the question world? Where would it be positioned? Will it experience a capacity crisis? What should we do if we encounter sanctions on components similar to the cell phone chip neckline?

Starting with the sanctions that hit its cell phone business in 2020, Huawei's turn to the smart car business is about opening up a new market for itself, not digging a bigger hole. Isn't it easy to understand not building a car until there are clear answers to all these questions?

What exactly is Huawei up to?

From the beginning of Huawei's entry into the automotive industry, some people will be Huawei must be the Bosch, Continental in the era of intelligence, even Yu Chengdong himself said, "The original idea was to become a supplier in the automotive field, such as Bosch, Continental, but it seems that in today's era does not quite hold up. Intelligent incremental is difficult to sell on a large scale like standardized incremental, need to be y involved with the car manufacturers, constant OTA constant iteration."

But from the beginning, Huawei is not running on the route of simply being an intelligent incremental parts supplier.

Huawei's investment in smart cars includes the more familiar autonomous driving and Hongmeng cockpit, as well as components such as electromechanical drives, thermal management, computing platforms, and even LIDAR and AR-HUD. If we will each business market prospects for a separate account, which is probably a huge market of hundreds of billions of dollars; it seems that each incremental market segments, can also find quite competitive products, the day is not bad for competitors.

For example, in the first three quarters of 2022, the turnover of Yigatong is 2 billion yuan; Horizon in 2020 chip shipments of only 160,000 pieces, the turnover is 200 million to 230 million yuan, in 2022 the cumulative volume of low-horizon shipments has exceeded 2 million pieces; Huawei intelligent vehicle BU, which is in possession of the automated driving + hongmeng cabin + computing platform + sensors, and so on, revenue of 2.2 billion yuan in 2022. 2022 revenue of 2.2 billion yuan ......

They are intelligent incremental market new players, all need to work with car companies through in-depth participation *** with R & D cooperation. The difference is that Yigatong and Horizon are targeting a segment of the intelligent cockpit or intelligent driving, while Huawei wants to do is to launch a packaged overall intelligent solution. 2.1 billion is not the ceiling of the incremental market of intelligence, is the current "bottleneck" of this overall solution.

Can consumers accept this model? In terms of the current HI model, which focuses on high-level intelligent driving, how many consumers are willing to pay a hefty price premium for a high-level intelligent driving experience? Over the past year, every new car with a smart-driving feature that has hit a cold streak has shown us that far fewer consumers are willing to pay a premium for smart driving than the industry expected.

Can the auto industry accept this kind of partnership? Huawei itself is very clear,"(Li Bin, He Xiaopeng) they are all unlikely to choose Huawei on intelligence, because they have their own pursuit; foreign giants, because Huawei is sanctioned, will not choose us; traditional car companies, if they are afraid of losing their souls will not choose us."

Ren Zhengfei's "five years not to build a car" attempted to give car companies to eat a pill of peace of mind, but for now this "pill of peace of mind" seems to be not enough. When Huawei is involved in a series of vehicle development, decision-making, production management and other aspects of the smart car model, this itself is not a "supplier" in the position.

Huawei has an ambition to change the way cars are made, but the automotive industry doesn't seem to agree. Huawei also doesn't seem to be willing to take the whole solution apart and return it to its rightful place as a supplier.

Lastly

Years ago, a Huawei insider said that Ren Zhengfei would hardly intervene in specific businesses, only when it comes to the main strategy will come forward, "not to build cars" is Huawei's firm strategy.

As for the tactics how to play? At least as in the past, the successful experience of the cell phone industry will be copied to the car, this play will not work. Even Huawei, still have to go to comply with the automotive industry play.

This feeling is especially obvious in this spring, those we thought could peak the automotive industry overnight new technology and new products do not seem to come so fast, new forces, new car seems to be not as good as we imagined, some traditional car companies do not seem to be as bad as we thought.

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