On March 28, Huawei's 2021 annual report press conference was held as scheduled, and the public obviously paid more attention to Ms. Meng Wanzhou, who made her debut as Huawei's vice chairman and CFO since returning to China in October last year. Even if such a picture is full of triumphant optimism, it is still difficult to hide the reality that Huawei's giant ship has not yet sailed out of the "fog".
From the data point of view, affected by multiple factors such as the continuation of the epidemic in 2021 and US sanctions, Huawei's revenue in 2021 was 636.8 billion yuan, down 28.56% year-on-year. Specific to the core business, the biggest decline in consumer business (mobile phones, tablets and other personal consumer electronics) revenue fell 50% year-on-year, which is obviously related to the limitation of high-end mobile phone chips, although the company has always denied rumors of abandoning the mobile phone business, and has repeatedly said that it will soon restore the supply of 5G mobile phones. But clear-eyed people can see that only by finding a new growth engine can we help Huawei tide over the difficulties.
Therefore, when the rotating chairman Guo Ping once again reiterated that "Huawei does not build cars", most of the auto media could not help but smile.
For Huawei, which has been deeply involved in the intelligent car industry for many years and has extended its tentacles to all corners of the automotive industry, it is actually not so important to "build" or not "build" cars.
That's because the tech giant is currently positioning its automotive business as an "incremental component supplier." The so-called incremental part is that with the popularization of high-level driving assistance and the development of intelligent cockpits, autopilot software and computing and connection technologies are urgently needed by car companies. According to data provided by Xu Zhijun, Huawei's rotating chairman, after the traditional car moves towards fully autonomous driving and electric vehicles, the composition of traditional components will only account for 30-40%, while the remaining 60-70% is related to electronics, computing, communications, and software. Therefore, Huawei's current automotive business layout covers laser/4D radar sensors, all-in-one power systems, driver assistance algorithms, vehicle-grade Hongmeng systems, and even new car sales based on Huawei's offline stores.
In addition, Huawei also provides a package-style "HUAWEI Inside" full-stack solution for car companies, including deep involvement in vehicle research and development, manufacturing, and the software and hardware supply of the above-mentioned full set of intelligent cockpit and driver assistance systems. From the AITO Inquisition M5, to the Polar Fox Alpha S Huawei HI Edition and the Avita 11, which will debut in the second quarter, are all masterpieces. It can be said that huawei now covers the entire industrial chain from research and development, manufacturing, software and hardware to terminal sales in the automotive industry. In their own words, in addition to the chassis, four wheels, body and seats, Huawei has all the technology on smart electric vehicles.
From the layout of in-vehicle interconnection in 2013 to the gradual "Bosch" in the field of intelligent electric vehicles, how did Huawei, as a technology giant, get to where it is today?
Huawei: I can not build a car, but I have to know how to build it
Fast back in 2013, the Ferrari LaFerrari, still codenamed F70, came out and took over the mantle of Enzo perfectly, while the Toyota 86 rekindled enthusiasm for Japanese affordable performance cars with its approachable price and outstanding driving pleasure; it is worth noting that in the same year, the Tesla Model S topped the Norwegian new car sales list for the first time, which is also the first pure electric model ever to win this award. It is in this era that people smell the taste of change, Huawei began to lay out the field of intelligent electric vehicles.
In December 2013, Huawei released its first vehicle-grade product, the ME909T in-vehicle module. The main role of this on-board module is to use the car machine to access the Internet and related information data transmission. At the press conference, Liu Xiaobin, then vice president of the product line of Huawei Terminal Co., Ltd., said: "Huawei terminals will only focus on the Internet of Vehicles communication solutions that they are good at, and will not cross this boundary, and the rest will be handed over to partners." ”
Just before and after the release of the ME909T in-vehicle module, Huawei announced the establishment of the Internet of Vehicles Business Department, which is subordinate to the famous 2012 laboratory, which is different from product research and development, which is a completely theory-oriented laboratory, responsible for the research and development of basic software research and development and the underlying logic of the product.
A year later, Huawei has established cooperation with Dongfeng, GAC, SAIC and other car companies, committed to joint research and development in the field of Internet of Vehicles, and in 2015, Huawei's circle of friends of "Internet of Vehicles" has successively joined multinational car companies such as Volkswagen Group, Audi, and PSA Group (now Stellantis Group). In the same year, huawei and volkswagen's first research and development achievement, the MirrorLink app based on Huawei mobile phones, was officially unveiled. The system is similar to Apple's CarPlay, which can directly project navigation, music, SMS and other information on the user's mobile phone to the car machine screen, and Volkswagen announced that it will be equipped with the system in the future on domestic and imported models. Subsequently, Huawei successively got orders for communication modules from Audi, Mercedes-Benz and other car companies. In 2016, Huawei established the "5G Automotive Alliance" with eight companies, including Audi, BMW, Daimler, Ericsson, and Intel, starting from its own communication field, and successively integrating AI chips, cloud services and other modules to provide a full set of data support for smart cars.
Although until 2018, Huawei has been announcing that the Internet of Vehicles will be an important development direction for the company in the future, but as early as an internal speech in early 2014, Ren Zhengfei, who has always loved BMW, spent a lot of time analyzing whether the veteran luxury car manufacturer would be completely abandoned by the momentum of Tesla, and finally came to the conclusion that as long as Bavarians do not conform to the old ways, BMW will definitely be able to surpass Tesla in the fields of electric drive and smart cockpit, and Huawei is another "BMW" that chases Tesla.
It was inspired by this speech that Huawei's R&D department began to explore the automotive industry more deeply. In the same year, Huawei began to cooperate with Dongfeng in the development of L4 autonomous vehicles, and in addition, it began in-depth cooperation with BAIC and Changan in 2018 and 2019.
In terms of independent research and development, Huawei has never stopped, and in January 2019, Huawei released the world's first multi-mode chip that supports V2X, The Balong 5000, and the 5G communication hardware MH5000. The chip can be used for the Internet of Vehicles and autonomous driving, at the same time, Huawei has developed a second-generation mobile phone in-vehicle interconnection system that connects people-cars and homes through all scenarios - Huawei HiCar; at the Huawei Global Developer Conference in the same year, the company released its self-developed car-machine system - Hongmeng OS.
At the beginning of 2021, a short video about Huawei's automatic driving caused a sensation on the whole network, in this video, the test car in the driver's hands off the steering wheel, freely and smoothly through the complex intersection and narrow roads in congested urban areas, for retrograde couriers, intersection turn rush vehicles and other real and rich "Chinese characteristics" traffic scenes are handled properly, and the support behind this is Huawei's ADS (Autonomous Driving). Solution) high-end autonomous driving full-stack solution.
From the hardware point of view, the current system is equipped with 3 lidar, 6 millimeter wave radar, 12 ultrasonic radar and 13 cameras, at the same time, Huawei through self-developed AI chips and chip-based computing platform, so that it has absolute autonomy in high-level automatic driving technology, in 2018, Huawei released the AI chip Ascend 310 and Ascend 910 and support L4 automatic driving computing platform - MDC600. On the Polar Fox, which Is deeply involved in Huawei, the Alpha S Huawei HI Edition has a higher performance chip with a built-in computing power of up to 400TPS.
In addition, Huawei's ADS system integrates the capabilities of chip, algorithm, and data, so it supports a more flexible combination of functions to meet the needs of L2-L4 level automatic driving. In other words, this also opens up new ideas for the development path of autonomous driving. For a long time, there are two different technical paths for the development of automatic driving, one of which is gradually iteratively upgraded from L2 to L5, representing Tesla, Volkswagen as the representative of car companies, in recent years, under the vigorous promotion of car companies, L2's driving assistance system has achieved a high loading rate on new cars.
According to the data of the Insurance Regulatory Commission in 2021, the insurance volume of mainland front-loading ADAS (driver assistance system) standard new vehicles was 8.0789 million units, with a penetration rate of 30.78%, an increase of 29.51% year-on-year. Even so, the development of L3 and higher level of autonomous driving is still not easy for car companies, from the law, driving rights to data security there are many problems, and even Ford and other manufacturers call the technical bottleneck of L3 automatic driving "technology black hole", and said that it is difficult to mass-produce and load cars.
Another development route is Google Waymo, Baidu Apollo led by technology companies, they choose "one step in place", directly develop L4 and above automatic driving technology, although this avoids the risk of the first route, but the development cycle is long, requires a lot of upfront investment, there is no mature commercialization case, the R & D funds of related enterprises are under great pressure.
In contrast, Huawei's ADS has realized a new model of "L4 when L2 is used", after mass production in the future, the driver will detect the road conditions, but the vehicle itself realizes L4 automatic driving, which avoids the risk of the enterprise to the greatest extent, and the data provided by a large number of users after loading the car can also make the system iterate rapidly.
At the level of vehicle design and research and development, as a new brand jointly built by Huawei and Xilix, aiTO Q&I M5 was launched at the end of last year, and the car is equipped with Huawei's technology in terms of power system, vehicle machine and entertainment system. In addition, the Polar Fox Alpha S HI version equipped with Huawei ADS autonomous driving technology will be officially delivered within the year, and the Changan Avita 11, which is also empowered by "HUAWEI Inside", will also be officially released within the year.
On the surface, Huawei has entered all aspects of the automotive industry, even if it does not build its own cars, at least it will become one of the top suppliers, becoming China's Bosch or Continental Group, but are things really as good as they seem?
Technology blockade, car companies are afraid, challenging Huawei's automotive business where opportunities coexist
Although Huawei's automotive business seems to have unlimited potential on the surface, in fact, it also hides a "crisis". First of all, unlike the fragmented and diversified supplier system in the era of fuel vehicles, Huawei's current "HUAWEI Inside" full-stack solution for the automotive business involves three electrics, intelligent driving, and digital cockpits, which basically covers all the technical cores of the future automotive industry. This means that once the car company carries out in-depth cooperation with Huawei, it means that its own products and even the company's future development plans are bundled with Huawei. For car companies, this is probably very difficult to accept.
In this regard, the Polar Fox Alpha S Huawei HI Edition is the best "lesson from the past." "Due to the inability of the Hongmeng intelligent cockpit system to be supplied as scheduled, it was forced to delay the delivery several times. A Beiqi Blue Valley executive, who did not want to be named, also said in an interview with the media: "Huawei is a strong supplier, and they do not let us participate too deeply in the software technology level." Coincidentally, Chen Hong, chairman of SAIC, has also made it clear: "Cooperation with Huawei is like having a company that provides us with an overall solution, so that it becomes the soul and SAIC becomes the body." For such a result, SAIC is unacceptable and must take the soul into its own hands. ”
In addition, the US government's sanctions on Huawei have not only hit its high-end smartphone business hard, but also affected the auto business that is favored by the public. Although Huawei has super high-end chip design capabilities, Huawei's chips have been handed over to TSMC. Affected by the sanctions policy, after the termination of the cooperative relationship with TSMC, its high-end chips and related models of smart phones have been cut off and discontinued.
What is more serious is that due to the blockade of Western countries in chip lithography machines and other technologies, a number of domestic manufacturing companies have not yet mastered the chip manufacturing process below 10nm, but many technologies, including ADS high-end automatic driving full-stack solutions and smart cockpits, rely heavily on high-end chips. Affected by this, the current Q&I M5 is only equipped with a driver assistance configuration including adaptive cruise, lane keeping, and active braking, and can reach the L2 classification standard according to SAE standards.
Not only that, according to the German financial media "Manager Magazin (Manager Magazine)", Huawei even negotiated with volkswagen group in February this year for the acquisition of the driving department, involving a purchase price of up to billions of euros, although the matter was eventually resolved, but just like Huawei's previous painful sale of the glory business, it is not difficult to see from the side that its senior management has little confidence in the future development of the business in the absence of core.
Therefore, it is foreseeable that for a long time to come, the "lack of core" will become a major constraint on the development of Huawei's automotive business.
Editor's summary: For the current Huawei automotive business, despite the difficulties, years of technology accumulation and industrial layout still make it have a considerable hard core strength, as for the "no car" principle that Ren Zhengfei has always adhered to, in my opinion, it is a comprehensive result of many aspects. The first is the entrepreneur's own conservative business style. Secondly, in the current environment, instead of announcing the construction of cars with great fanfare, and finally following in the footsteps of Evergrande and LeTV, it is better to taoguang and cultivate obscurity, devote energy to basic research and development, and break through the technical blockade as soon as possible.
In addition, in the current environment, hasty announcements of car manufacturing are bound to be directly regarded as competitors by many car companies, which will seriously hit the "HUAWEI Inside" business that is still in its infancy. Becoming the core supplier of car companies in the era of intelligent electrification is Huawei's "basic disk" at this stage. From Huawei's action of merging the automotive business with the smart terminal business, it is not difficult to find that Huawei's expectations for the automotive business may far exceed the imagination of the media and the public.
Perhaps, accumulating strength to cooperate with mature car companies, tentatively investing new products in the market, and using their own strengths to lead some less investment in research and development work is the most suitable development model for Huawei's automotive business. As Hu Houkun, then vice chairman of Huawei in 2019, said: "Huawei's GENES are a company that is willing and good at going far, using the best technology to solve the most difficult problems and turn the impossible into possible." It is probably most appropriate to describe the current Huawei car business with this sentence, and the ultimate question about whether Huawei will build a car is naturally self-evident.