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Yu Chengdong is the platform for the smart car mode, Xu Zhijun supports the HI mode, and the battle for the route of Huawei Motors will usher in a new fierce battle in 2024.
On January 22, Huawei and Dongfeng Lantu officially joined hands, and it was not Yu Chengdong who appeared at the signing ceremony on behalf of Huawei, but Xu Zhijun.
For a long time, Huawei has adopted a multi-legged approach in the automotive business, with Xu Zhijun supporting the HI model and Yu Chengdong standing on the platform for the smart car mode.
At present, in addition to Chang'an, the HI model camp has finally ushered in a new partner. With Huawei's integration of car bus into an independent company, it is expected to further release the possibility of attracting car companies to invest in the future.
On the other hand, in Huawei's smart car camp, the question world launched by Celis will deliver nearly 330,000 units, topping the monthly sales list of new power brands, plus the Zhijie launched by Huawei and Chery, followed by BAIC's "Xiangjie" and JAC's "Aojie", the volume is growing day by day.
The Huawei Smart Car Model and HI Mode, led by Yu Chengdong and Xu Zhijun respectively, are bound to usher in a new fierce battle in 2024. The relationship between Li Tsinghua's internal automotive business lines is crucial to seeing the situation clearly.
So far, the smart car business has remained in Huawei's terminal BG system, and only the car BU business has been required to be "independent" by Huawei.
In Huawei's current architecture, there are actually two lines related to the automotive business: the car BU, and the smart car mode dominated by Huawei's terminal BG. The organizational structure of Chebu was divested in November 2023, and the development route is gradually clear. Also in November, Zhixuan Car was officially renamed "Hongmeng Zhixing".
On November 26 last year, Huawei's car BU business ushered in the last adjustment. Huawei and Changan signed a Memorandum of Understanding (MOU), according to which Huawei intends to establish a company engaged in the research and development, design, production, sales and service of automotive intelligent systems and component solutions. In principle, Party A (Huawei) shall not engage in business that competes with the business scope of the target company."
In fact, Huawei has only split the car BU business where the parts mode and HI mode are located, and the smart car mode is still retained in Huawei's terminal BG system, and Yu Chengdong is personally leading the team.
The split of the car BU business also means that the business will no longer be led by Yu Chengdong in the future. At the same time, Yu Chengdong will no longer be bound to Che Buqiang.
Huawei's internal exploration of the automotive business model has gone through several rounds of adjustments, and the boundaries are sometimes clear, sometimes blurred, and the multi-legged walk is also full of uncertainty to send a signal to the outside world that "we will not build cars".
Huawei has been involved in the automotive communication-related parts industry for a long time. By May 2019, the intelligent vehicle solution BU was officially established, referred to as the car BU, which belongs to the ICT management committee and is positioned as "Bosch" in the era of smart cars. Chebu has become a first-level department alongside Huawei's carrier BG, enterprise BG, and consumer BG (now terminal BG), with Huawei's rotating chairman Xu Zhijun in charge and Wang Jun as president of Chebu.
Chebu began to provide full-stack intelligent vehicle solutions for car companies, and jointly developed intelligent components for the whole vehicle, including autonomous driving systems, with car companies, and the HI model gradually took shape.
In November 2020, Huawei issued an internal document reiterating that it does not manufacture cars and adjusted the business jurisdiction of car bus from the ICT Management Committee to the Consumer Business Management Committee.
Half a year later, Yu Chengdong became the CEO of Chebu. At the same time, in addition to parts and Huawei's HI mode, Yu Chengdong's TO C smart car model has surfaced. In the smart car mode, Huawei is deeply involved in the whole process, and Sailis has become the first partner of the smart car model, and launched a new brand of the smart car model.
In the eyes of the outside world, the boundaries between the two business lines are blurred, but in fact, the smart mode and the HI mode are parallel in Huawei.
According to "Leopard Change", Huawei's car-making technology is mainly distributed in the car BU business, mainly providing autonomous driving technology, light field screen, HUD and other technologies, and HarmonyOS Zhixing business and car companies need to purchase technology from the car BU business, and complete manufacturing and sales. The smart car model mainly integrates the technology of the car BU business, and connects the car factory to complete the whole process of model design, technology procurement, joint manufacturing, publicity and sales with the car factory.
The smart car model led by Yu Chengdong has been developing all the way since the establishment of the project, not only the number of car companies that have chosen to join has increased, but the sales of the brands it cooperates with have also increased. On the other hand, the HI model, which bears the losses of Huawei's automotive business, has to be divested.
Yu Chengdong has publicly stated that the car BU is Huawei's only loss-making business unit, with an annual R&D investment of more than 10 billion yuan, and 70% to 80% of the investment is in the field of intelligent driving. Splitting the car BU is undoubtedly getting rid of a burden.
Behind the two forces that are secretly competing with each other, whether it is the HI model or the smart selection mode, is actually the battle for the route of Huawei's automotive business.
In Huawei's organizational structure, although Yu Chengdong is directly responsible for automobile-related businesses, the HI model has a top person in charge - Xu Zhijun, Huawei's rotating chairman, and Xu Zhijun is also the main promoter and supporter of the HI model. And the HI mode is actually the most straightforward explanation of "Huawei doesn't make cars".
In the HarmonyOS Smart Mobility Model (Smart Car Mode), Huawei has been heavily involved in the whole process, and has produced more than 12 models through cooperation with car companies. The success of the HarmonyOS model lies in the fact that due to the deep involvement with Huawei, users can feel that this is a "Huawei car" without clearly identifying the Huawei logo and name.
The HI model appeared before Hongmeng Zhixing, but after several years of development, the HI model has not yet run through the path through partners, but the smart car model led by Yu Chengdong has released a lot of imagination after the Wenjie brand sold well.
In the widely circulated version, Huawei's six top executives voted on whether to build a car, five people opposed, and only Yu Chengdong advocated building a car. After the vote took effect, Yu Chengdong left a message in Huawei's Voice community, "In a few years, everyone will understand." ”
Yu Chengdong pushed hard to build a car, and then repeatedly shouted for the question world and the platform of the smart car model, which not only caused the dissatisfaction of Che Zhu Huarong, chairman of Changan Automobile, a partner of the HI model, but also secretly competed with the person in charge behind the two businesses.
In March 2023, AITO Wenjie used "Huwei Wenjie" for the first time in related promotions, which triggered market speculation. Subsequently, Ren Zhengfei reiterated his commitment that "Huawei does not make cars", emphasizing that the "Huawei" or "Huwei" logo is not allowed to appear on the publicity and appearance of the whole vehicle, and Xu Zhijun, the rotating chairman, publicly bombarded "some departments, individuals, and some partners are abusing the Huawei brand" at the results conference. The "Huawei" logo was removed overnight in the Wenjie store, and it was difficult to see "Huawei" on Wenjie after that.
At the beginning of 2021, Yu Chengdong said at an internal meeting that domestic traditional automakers "have no brand, no channel, no retail and no retail", "if we don't enter the market and help car companies do a good job in selling the design and experience of the car, this business cannot be closed at all", these complaints actually imply Yu Chengdong's concerns about Huawei's automotive business: limited involvement, can the R&D cost invested by the car BU be recovered from the car company?
The characteristics of "high expenditure and low return" of the car BU are undoubtedly the reason why Yu Chengdong is not optimistic about the HI model.
At the beginning of the establishment of Chebu, Xu Zhijun once said that "there will be no profit target for 6 years". Huawei's annual report shows that by the end of 2022, Huawei had invested more than 20 billion yuan and had a R&D team of 7,000 people.
The revenue of Chebu mainly comes from providing parts and development services for "Hongmeng Zhixing", followed by providing services for car companies that cooperate with HI mode and parts model. According to official data disclosed by Huawei, in 2022, the revenue of the intelligent vehicle solution business will be 2.1 billion yuan, accounting for only 03%。Judging from the annual R&D expenditure of more than 20 billion yuan, the income is almost a drop in the bucket.
The Hi model has not yet been supported by sales, and the smart car model is infinitely close to car manufacturing, which brings more troubles, and the two-legged walk of Huawei's automotive business is actually a compromise and a compromise solution.
Wishful thinking, does anyone pay? The objects of cooperation in the HI model include BAIC Jihu, GAC Aion, and Changan AVA. At present, only Changan AVATR is still cooperating, and VOYAH Automobile, which has joined this year. The HI mode has been running for a longer time, but the development has never improved, and the pressure on the top person in charge, Xu Zhijun, can be imagined.
As a non-listed company, Huawei is unable to obtain financing from the primary and secondary capital markets, and the loss-making business can only open up financing channels by spinning off, and only by splitting off can it find a way to transfuse.
Huawei insiders told "Leopard Change" that in essence, the car BU needs external "blood transfusion", the business will no longer invest heavily in research and development, and the new models this year and next year will not have particularly amazing technology jumps. Wenjie M9 is an obvious example, only the pile of materials without new technology, "this bottomless pit can't afford to burn, so I have to split financing and exchange cash flow".
However, the reality is very skinny, and the financing road after Huawei's spin-off of the car BU is not smooth.
Changan Automobile, as the first car company with the intention of cooperation, is very dissatisfied with Huawei's spin-off plan. At present, it has been more than two months since Huawei announced the separation of the car BU business, and the cooperation plan between the new company and Changan has not yet been implemented, and the two sides are still at the level of "memorandum".
According to Huawei's original plan, after the spin-off of the loss-making car BU business, other car companies will buy shares, but after the operation, there are some contradictions with the car companies' requirement not to engage in business that competes with the business scope of the target company, and Changan is not willing to pay.
Changan believes that Huawei's retained smart car business has competed with the new company's business and does not meet the requirements of the original agreement. More importantly, the car companies that cooperate in the smart car business have been tilted too many resources, resulting in the HI model of their cooperation being in a marginal position for a long time, and the HI model has not brought ideal feedback to Changan.
At the recent Global Partner Conference, Zhu Huarong complained that Huawei's insufficient resources for the HI model were one of the main reasons why AVATR failed to sell well.
As part of Changan's new energy transformation strategy, AVATAR's performance in the past year has been mediocre. The monthly sales of the main sales model AVATR 11 have hovered around 2,000 units for a long time, with a total of more than 20,000 units throughout the year. Since the release of AVATR 12 in November 2023, although the order in December has made a big breakthrough, reaching 6,106 units, it is still far from the annual sales target.
At the same time, AVATAR's losses are gradually expanding. The losses in 2021 and 2022 were 2., respectively100 million yuan and 201.6 billion yuan, with a loss of 17 in the first half of 20235.6 billion yuan, if calculated according to the 10,755 new cars sold in the first half of 2023, every AVATR sold means a loss of 1630,000 yuan.
Within a company, the two departments compete with each other, and the relationship between customers and businessmen becomes a difficult problem.
Huawei insiders revealed to "Leopard Change" that Chang'an has been too heated on the issue of "whether Huawei should retain the smart car business" and "how to develop the smart car business in the future". From different perspectives, the two businesses are both contradictory and not contradictory, and how to understand them depends on which side they stand on.
Changan insists on restricting Huawei on "the future development of smart cars and how many car companies will be introduced". But Chang'an's conditions have run counter to Huawei's original intentions.
Huawei's internal game over the automotive business will not stop, and the situation will only be adjusted immediately depending on which model goes faster.