Huawei's car BU expands to 14 major sectors behind it: two forks in the road and its cost

Tech Planet (WeChat ID: tech618)

Wen | Qiao Xue

Cover source | Visual China

In April 2021, at the annual Huawei analyst conference, Xu Zhijun, Huawei's rotating chairman, sighed: "The goal of this year is to survive and strive to live a little better." ”

Immediately after, Yu Chengdong, CEO of Huawei's consumer business, publicly stated: "After being sanctioned by the United States for many times, Huawei's mobile phone business has been affected, and after thinking about it, Huawei decided to sell cars, which can make up for the decline in profits caused by the impact on the sales of mobile phone business." Subsequently, Huawei unveiled the Cyrus SF5 at the Shanghai Auto Show, taking the lead in carrying the banner of entering the automotive industry.

2021 is dead, and Huawei has not been better. In 2021, Huawei's revenue is expected to be 634 billion yuan, a new low in the past three years, only higher than the 2017 revenue of 603.6 billion yuan, some Huawei insiders sighed about Tech Planet, "In 2020, I also expect the company to soon become a trillion-dollar company, and now I dare not think about it." ”

In less than a year, Huawei broke into the car industry, found 4 allies of Xiaokang, BAIC, Changan, and Ningde era, and cooperated with car companies to develop a variety of new models, 2 of which have been put on the market, and others have also come out quickly, but so far, no car can sell more than 10,000.

Within Huawei, there are two kinds of ideas gradually surging: on the one hand, the leading technology must eventually be put into the terminal, to build Huawei's own car; the other faction advocates that the role of the full-stack service provider should stand behind the car company, the competition of the two routes is still fighting, the impact has been shown, the brain drain, the direction is mostly the main engine factory and car companies; want to do the main engine factory incremental and full-stack service providers, but the awkward role also makes the main engine factory swing, Huawei is in a dilemma.

In whose hands is the soul of the car builder?

What exactly is the soul of a car?

In the era of fuel vehicles, it is the chassis, engine, and transmission of the three major parts, but this is not established in the era of new energy. Batteries and motors are the foundation, electronic control is a vital part of dominating new energy vehicles, intelligent cockpits and auxiliary driving are also irreplaceable existence, or there is hidden behind the core data, and the use of software to define smart cars has gradually become the consensus of the industry.

The above are the reasons why Huawei is determined to gamble. In the recently announced "Qingjie" model, Huawei's all-round "deep empowerment" is vividly displayed.

At the press conference, Yu Chengdong said that the exterior design of the AITO Q&I M5 was created by Huawei's industrial design team.

On the core, Huawei's more than 30 years of power electronics technology accumulation and research and development experience in ICT has been copied to the world and created a full-stack power domain solution. The Q&I M5 is equipped with HUAWEI DriveONE pure electric drive range extension platform, with intelligent four-wheel drive electric system and precision oil cooling technology, entering the 4-second camp of 100-kilometer acceleration, which is even faster than Tesla's model Y (5.1 seconds acceleration per 100 kilometers).

In terms of range extension technology, the two sides jointly developed the Hump Intelligent Range Extender System, which consists of a battery system, a high-efficiency range extender, a generator system, and an electric drive system, which has been used earlier in the Syris SF5 Free Expedition Edition model.

The biggest gimmick of the "Q&A" model is still the first model equipped with harmonyOS smart cockpit, Huawei's desire to apply the largest system and ecology to the car machine has initially been realized, in addition to the harmonyOS car machine operating system, HUAWEI SOUND sound system and HUAWEI Share function are engraved with Huawei's brand.

According to the information of the previous AITO brand conference, huawei has managed the planning, design and even the marketing and sales in the later stage. According to Tech Planet, Huawei even built an after-sales service for the M5, and even the charging pile is marked with Huawei's LOGO, before the after-sales part of Cyrus was responsible for the partner Xiaokang Company, and now including Cyrus and AITO brand after-sales unified subordinate to Huawei.

In terms of data, Huawei and Xiaokang did not explain the issue of data ownership, but Tech Planet learned from the industrial chain, and relevant people said that according to the specific situation between the main engine factory and the auxiliary driving company, the industry speculated that a company such as Xiaokang, which does not have much auxiliary driving ability, will share the data with Huawei and jointly develop related functions.

The advent of the questioning circle is actually silently demonstrating Huawei's strength, and its circle of ability has been extended from the initial car machine to the three terminals of intelligent driving, intelligent cockpit, and intelligent electric, becoming a very strong full-stack supplier, while having the ability of chips, operating systems, perception hardware, and decision-making fusion algorithms, Huawei can skip hardware integration and cooperate directly with vehicle companies.

Although Xiaokang has repeatedly denied becoming a Huawei foundry, such a large and complete service, it is difficult to say that Xiaokang is a very independent main engine factory, and Huawei is like a "full service" supplier. Xilis can be said to be a shallow taste, and the latest M5 seems to make Huawei think, where is the boundary of "not building a car"?

The dispute between the two routes, the loss of middle and high levels

Huawei has never rushed into an industry, and in history, Huawei's large-scale strategic investment in new business generally has to meet two conditions: one is that the market capacity is large enough; the other is that the market is on the eve of a rapid increase in penetration from the time node.

Soochow Securities disclosed that there is such a set of estimated data within Huawei, when the penetration rate of automobile intelligence increases by 1%, the global auto parts (excluding the US market) market expands by 3.3 billion US dollars; if intelligent and electrified increase by 1% at the same time, the global auto parts market will expand by more than 6 billion US dollars, if the two can be increased simultaneously, if the intelligent + electrification penetration rate increases to 50%, the global market will add more than one trillion yuan.

The size of the automobile market is about 3 times that of smart phones, which is a broader ocean, and it is more strategic to be a big fish in such a vast ocean. In the long-precipitated ICT of Huawei, there is no reason to let go of such a market, and at the same time, Huawei must intervene in this unprecedented competition to make up for the setbacks in the consumer business.

With the continuous deepening of this market, there is also a dispute between two routes within Huawei, the car-making faction and the non-car-making faction. The proposition of not building is basically that the car-making front is long, the cycle is wide, and the input cost is huge, and if it encounters automotive chip sanctions again, it will be a fatal blow. Moreover, at present, Huawei has many customers in the automotive industry, which may affect the relationship with existing partners, which is beyond Huawei's ability to tighten its belt and live.

The car-making faction believes that this is both a risk and an opportunity, and Huawei's technology must be put into the terminal to maximize commercial value, and it is possible to give birth to a new consumer business line.

Xu Zhijun once pointed out this point in public, "Many choices in Huawei's history are not understood. Every business knows what their positioning is best. Yu Chengdong was not convinced, but he only had one vote. For Huawei's entire senior team, it is clear what Huawei is doing in the survival stage. ”

Internal differences, finally voted in the form of a vote at a high-level meeting, finally converged into ren Zhengfei's sentence, "Resolutely do not build a car, who will suggest a car in the future, interfere with the company, can be transferred out of the post."

In July 2021, Su Jing, as the director of the original driving product department, was dismissed for making inappropriate remarks about Tesla, and after he was dismissed, Bian Honglin took over as the new director of the intelligent driving product department and also served as the BU CTO of Huawei Automobile. In the previous Tech Planet report, in the initial structure of BU, Cai Jianyong held this position.

The Intelligent Vehicle Solutions Business Line (BU) was adjusted from the ICT Business Management Committee headed by Xu Zhijun to the Consumer Business Management Committee headed by Yu Chengdong, who also replaced Wang Jun as the actual leader.

Tech Planet observed that the fleeing middle and high-level people are more willing to join the traditional OEMs or create new forces. According to Future Automotive Daily, She Xiaoli, chief functional safety expert of Huawei Automotive BU, joined NIO as an internal expert in algorithm research. Previously, Zhang Xiaohong, director of the intelligent driving product group, joined NIO as a senior product manager in April 2021; Chen Qi, founder of Huawei's autonomous driving team and former director of the autonomous driving research and development department, also left and recently joined Kr as vice president of autonomous driving, responsible for the krypton automatic driving business.

In the intelligent and software-defined future, whether it is the main engine factory or Huawei, which is positioned in the role of suppliers, it will eventually face a contest of technical talents, and the loss and departure of talents is obviously not a good thing for Huawei.

The cost of Huawei's car building or not building a car

The scale of Huawei's vehicle BU is also expanding, and Tech Planet once exclusively reported in April 2021 that "Huawei Car Manufacturing Start-up: Layout for 3 Years, Set Up 9 Departments, Target 5,000 People Team", compared with the structure and scale at that time, has gradually grown.

Tech Planet recently exclusively learned that the second-level department of the car BU has been increased to 14, and all the second-level department heads include Wang Jun, the former president of the car BU, and now the director of the intelligent driving solution product line, all of which report to Yu Chengdong.

On the basis of the second-level department, the entire BU continues to expand, and there are currently a number of third-level departments under it, which is a structure that was not available before. For example, the department under the supervision of Bian Honglin has become the most core brain of the entire car BU at present, and there are 11 third-level departments under it. Huawei's hundreds of places added to the school recruitment in 2021 are almost all given to the car BU. So far, the entire car BU has been expanded to a team of 2,000 people. Huawei also invests in R&D funds, and in 2020, Huawei will invest about $500 million in automotive-related research and development, which will double in 2021 to more than $1 billion.

Car BU is becoming Huawei's star BU, and many people are trying to find ways to transfer jobs in the internal "living water" circulation and try to catch this extremely fast train.

Tech Planet learned through multiple independent sources that except for Zheng Gang, the director of the Strategy and Business Development Department, all the heads of the second- and even third-level departments are old Huawei employees, who have basically served in Huawei for more than 10 years, and most of them are transferred from the previous core departments and the most frontline.

But there are also some problems correspondingly, these middle and high-level may have been engaged in areas that are completely unrelated to or not closely related to smart cars, for example, some Huawei insiders revealed to Tech Planet that consumer BG is facing the influx of talents to car BU, and in management, there will be a situation of "layman guidance for insiders", so some factions will be derived, such as "old ADS faction", "Noah faction", "consumer BG faction" and so on.

This has also become the reason why the "old ADS" people who have the ideal of building a car but cannot achieve it are slowly leaving. Huawei insiders revealed to Tech Planet that in order to avoid the loss of Huawei talents to the main engine factory, employees who have recently left need to sign non-compete agreements, and recently hired employees have also signed non-compete agreements, and the scope of shielding involves major OEMs, as well as enterprises related to the new forces of "Weilai Xiaopeng Ideal" car manufacturing and smart cars, and the list is refreshed every year. As of press time, Huawei has not replied.

Huawei is wary of car companies, and car companies are also guarding against Huawei.

36Kr has also reported that big car manufacturers have always been quite jealous of Huawei. A Baidu autonomous driving employee said that before the Shanghai Auto Show in April this year, Baidu and Huawei were simultaneously negotiating cooperation with FAW Group on autonomous driving cloud, and after the North Automobile model that adopted Huawei's insider plan appeared on the street, FAW Group immediately tilted the focus of negotiations to Baidu, "They judged that Huawei will definitely build cars, Baidu cars they are not afraid, but Huawei cars are a big threat." ”

The positioning of the car BU is to provide incremental components for car companies, help car companies build good cars, and explore two modes, one is the Huawei Inside model, such as Huawei and BAIC, Changan, and GAC three cooperative car companies to provide autonomous driving solutions to support them to build their own sub-brands; the second is that Huawei's car BU business provides parts and solutions to car companies, such as BYD, Audi, etc. to reach a cooperation in the autopilot system ADS and other solutions.

At present, Huawei's most in-depth cooperation with the car company Xiaokang, is different from the above, more like a hybrid version of the two ways, which makes the main engine factory still wary of Huawei's car-making heart, and dare not rest assured that it will all be handed over to Huawei.

Building a car or not, Huawei is in a dilemma.

What are the odds of winning in the first echelon?

In April 2021, the Huawei flagship store on Nanjing Road in Shanghai, Yu Chengdong high-profile platform and promotion of the SF5, and declared to achieve "5 million annual sales", although after the release, it was rumored that the order exceeded 10,000 in 3 days, the reality is that the sales of Cyrus soon "pounced on the street", by the end of 2021, the cumulative sales of the Sf5 of Cyrus is only 7420 vehicles, which is not comparable to the sales of the "new forces" of the car for one month.

At the beginning of the new year in 2021, the protagonist of Huawei's sales store has also quietly been new, replaced by a new model of Q&I M5, from posters, store logos to brands, Xilis has been fully replaced, but soon, Yu Chengdong has made a new wish again, "Q&I M5 sales can reach 30,000 vehicles, this year Huawei will challenge the sales target of 300,000 vehicles, and the annual sales of cooperative car companies will reach 100 billion, and stand on the first echelon." ”

For Huawei, it is to change a brand to continue to increase its own ICT and intelligent technology, and for the partner Xiaokang Company, it is an opportunity to obtain all-round cooperation with Huawei, becoming the first car equipped with "Harmony OS Intelligent Cockpit", and can also become the biggest gimmick of this car.

But behind the annual sales figures, 7420 consumers have paid real money, a brand that has been iterating for a short time, and it is also a process that constantly challenges consumer trust, and in just 8 months, from Cyris to the M5, it does not seem to be a wise choice.

A car owner who just bought Cyris in December 2012 told Tech Planet that he originally believed that the sales would be upgraded to the Hongmeng system, but now all of them have not been cashed in, and he can wait to buy a new model, and now he feels that he has been cut leeks.

Another car owner feedback to Tech Planet, as a Huawei fan, waited for nearly 4 months to buy Xilis, and recently went to the second-hand car dealer to inquire, the price of this car was directly cut, although the well-off side said that it was not discontinued, but the disappearing brand, the 4s shop where there was no place to repair, the loophole of the terms made him unacceptable, "We can accept the upgrade, what is unacceptable is that this brand is gone." ”

On the other hand, choosing the range extender route will have to meet the opponent is the ideal car, and the ideal ONE is accurately cut into a market segment: male owners, middle class, family cars, and two-child families. From the demand side, pain points, comfort, performance and other aspects have shown great lethality, making it the first model with a monthly sales of more than 10,000 yuan at a price of 300,000 yuan, and even luxury car brands such as Audi that took such a route earlier are not expected.

The difference of 20,000-80,000 yuan lower than the ideal does not guarantee that the market will accept another "small ideal", plus the ideal will enter the game in 2018, and xiaokang obviously has not yet reached such fineness and differentiation.

On the other hand, after the official listing of the Q&I M5, due to the temporary suspension of the SF5 of Cyrus, some potential consumers were diverted to the Q&C M5. Xiaokang revealed that at the end of the second quarter of this year, a new SUV model will be launched again, at which time, the attention of the M5 will be further diverted to the new model again. Such frequent iteration and promotion of new ones is not only not conducive to creating explosive models, but also the maintenance of subsequent models and users will also be potential hidden dangers.

Xiaokang had to continue to take the road of the traditional main engine factory, using the nesting doll way to build the car: different sizes, sizes, colors, interiors and other configurations, and then re-produce a wheeled car, according to luck to see which one the market will pick.

And this year, the new model X01, the ideal of the creator of the blockbuster, will be launched, as well as a group of peers and latecomers, there is not much room in the world. If the cycle is extended, when the market for "new cars" will eventually move towards electrification, the increase in range and pure electricity are completely two architectures, and the future will establish a user moat, as well as the infrastructure of the power exchange network, and may not even be able to grab the tickets for the qualification round.

If the sales of the qingjie industry continue to go high and low, how many chances does Huawei have in making cars?