Does Huawei Auto have the potential to beat Tesla and subvert the existing car-making model?

Will you buy a Huawei car to support Huawei? Why is it that from the Polar Fox to the Xilis to the M5, the car projects in which Huawei is involved are all struggling?

From mobile phones to cars, it is nothing more than a self-help by Huawei.

"Rolls-Royce's engine is put on the tractor, it must still be a tractor, not a Rolls-Royce", this is Huawei's former employee's evaluation of the failure of the Cyrus SF5 project. In the M5 project that appeared later, Huawei learned a lesson and increased the control of car manufacturing, from pre-planning and design to post-marketing and sales, all of which were single-handedly operated.

At this time, Huawei's torture of "not building a car" sounded again, but this voice actually has no meaning.

How to count the car? Is it only a self-built factory? If this is the case, then Huawei and Apple have not built mobile phones, but Foxconn and BYD are making mobile phones. Weilai and Jihu also did not build cars, but Jianghuai and Magna were building cars.

Huawei still chooses to cover its ears with both hands and continues to release smoke bombs, "Huawei does not build cars, it is necessary to help car companies build good cars and sell good cars." In my opinion, not only is the first half of the sentence absurd, but even the second half of the sentence "help car companies build good cars and sell good cars" is also problematic.

Time back to October 2002, Zhang Lihua, then deputy director of operator solutions, proposed at the seminar, "China has hundreds of millions of mobile phone consumers, Huawei should set up a project 3G mobile phone as soon as possible", Ren Zhengfei was furious, slapped the table and shouted: "Huawei does not do this thing of mobile phones, there is a long conclusion, who is talking nonsense, who is laid off!" Since then, "making mobile phones" has become a taboo.

However, things reversed at the meeting two months later. When talking about the mobile phone business again, Ren Zhengfei's tone was relaxed, and he made a final decision: take out 1 billion to make a mobile phone. One second it said no, the next second it was really fragrant, what's going on?

Ren Zhengfei was not shocked on the surface, but there was a fierce struggle in his heart. In a reminiscence article 10 years later, Lao Ren mentioned that 2002 was a year when Huawei might collapse, and the financial report showed that Huawei experienced the first negative growth in history, with sales falling to 22.1 billion yuan, while the target for that year was 33 billion yuan.

In order to seek new growth points, the mobile phone business has fallen to the ground in the crisis. In the initial stage of 2004-2010, Huawei's mobile phones took a route called "operator customized machines", Huawei was responsible for production, took the operator channels, and did not post trademarks. The advantage is that it avoids the shortcomings of Huawei's lack of C-end operation experience, but the disadvantage is that this business is bitter and tired, and the key is not to make money.

The mobile phone business stumbled all the way and did not improve until 2008-2009, when Huawei experienced the second performance decline in history, and Ren Zhengfei had to make up his mind to sell the mobile phone business and return funds. Dramatically, it coincided with the global financial crisis, and the bid was too low for the other side to sell.

Ren Zhengfei did not stop doing two, made a decision that made the executives drop their jaws, turned back to advance, upgraded the mobile phone on the edge to one of the company's three major business segments, shifted the focus of products to high-end independent brands, and promised to be the first in the world. It is also the second crisis in Huawei's history that has ushered in a turnaround in the mobile phone business. What no one expected was that after 10 years, it would really rush to the first place in the world.

2021 is the third time in Huawei's history that sales performance has declined, and this time the situation is more severe than the previous two. For well-known reasons, Huawei's consumer business (mobile phone business) has shrunk sharply, with revenue of only 234.3 billion yuan, and the revenue of 460-480 billion yuan from 2019 to 2020 has been cut off.

Although the book profit in 2021 was as high as 113.7 billion yuan, a sharp increase of 76% year-on-year, the profit growth was mainly due to the sale of the Honor business and the wholly-owned subsidiary super fusion, which brought Huawei a net income of 57.4 billion. This also means that in the next few years, Huawei will face double pressure on revenue and profitability.

However, compared with the crisis in 2002 and 2008, the growing Huawei is more relaxed, at the beginning of the sanctions, Huawei set one of the growth businesses, aimed at the "most subversive automobile industry in the next 10 years", and in 2019 set up a smart car solution BU, deployed heavy troops, and increased the annual R & D investment to 1 billion US dollars, 1 billion US dollars, more than most state-owned automobile groups, comparable to Weilai Automobile, higher than Xiaopeng Automobile and ideal automobile.

However, from the results, only the new energy vehicle companies that are willing to be deeply bound to Huawei are baicqi jihu and Xiaokang shares, and the polar fox alpha S HI version equipped with Huawei's intelligent driving system has repeatedly jumped tickets; the annual sales of Cyris SF5 that entered Huawei's smart selection channel sales are only 8,000 units, and then think about the annual investment of 1 billion US dollars, which is really not enough to fill the gap.

So, do you think that car companies need Huawei to help build and sell good cars? Or does Huawei need to use the smart car business to break through the current predicament?

Huawei autopilot hanging Tesla?

Since Xu Zhijun said that Huawei's autopilot is much better than Tesla's, why do mass-produced cars repeatedly skip tickets? Why are there rumors that Huawei's autonomous driving unit was sold to Volkswagen in Germany?

A year ago, the Polar Fox Alpha S HI version of the model demonstrated its strong autonomous driving capabilities in the urban sections of Shanghai. Not only calmly cope with the complex road conditions at the intersection, but also evade the retrograde electric vehicles and the random delivery cars. Objectively speaking, the level of autonomous driving is higher than Tesla's FSD, as well as Google's Waymo and GM's Cruise, which has closed road blocking tests.

Stimulated by the news, Beiqi Blue Valley directly raised the limit on the same day, and then successively 3 consecutive stop-and-go boards. However, a full year has passed, Huawei Hi version has repeatedly jumped tickets, and the listing time has not yet been finalized.

Questions about Huawei's self-driving technology have followed. Meituan Wang Xing commented that "Tesla has finally encountered an opponent whose technical strength and flickering ability are equal"; there is a suspected former Huawei Shanghai employee who broke the news that the road test video on the Internet was targeted and tuned, and he has run thousands of times, and the automatic driving 1000 kilometers without takeover is completely bragging, and the current Huawei intelligent driving is still the stitching of various algorithms.

That is to say, this kind of local testing is achieved through human intervention optimization. In machine learning, this is called "overfitting", that is, it performs particularly well in local tests, and it can be optimized better, but as long as you jump out of the circle, the performance will be very poor, even worse than not doing optimization. It can be understood as "the flowers in the greenhouse, out of the greenhouse, can not live." ”

For example, it is possible (I just said it is possible) to optimize the map, and the location of traffic lights, road signs, lane lines, road teeth, green belts, and garbage cans can be collected according to centimeter-level accuracy. This greatly reduces the complexity and amount of computation in the driving of the vehicle. Autonomous driving in such an environment can also be achieved by many small companies that have had actual road tests.

Liu Yu of BAIC BJEV revealed the reason for the Polar Fox HI version of the ticket jump: there are many scenes, many special components, to be developed one by one. Repeated testing is to avoid the biggest anxiety – sudden problems. Here it is about how to solve the long-tail problem in the field of autonomous driving, and we must rely on a large amount of data to solve the sudden problem of one percent or even one thousandth.

For example, Tesla is recognized as leading intelligent driving, in part, because it can obtain a large enough amount of data and iterate on product software. The massive driving data transmitted by the driver through Autopilot (autopilot assist function) is continuously iterated, optimized, and then ota pushed to the car through continuous iteration and optimization in the cloud.

Therefore, when the German media reported that Volkswagen intends to acquire Huawei's autonomous driving department, there is no need to be so shocked. For Volkswagen, it realized the importance of data and autonomous driving, and decided to be self-reliant and pay for a team, which was a matter of course. For Huawei, it lacks application scenarios in the short term and has a huge autonomous driving team, so it is better to sell a substantial cash flow. If the time is ripe, it is not impossible to change a group of people and then engage in it, we all know that huawei is not short of talents and mechanisms to attract talents.

There are also views that it is more likely that Volkswagen and Huawei will establish a joint venture company, with Volkswagen responsible for the funds and Huawei responsible for technology.

Huawei HI version of the model, Polar Fox Alpha S and Avita 011, at the latest in the second half of this year should also be listed, very much looking forward to, let's see if Huawei's automatic driving solution can bring surprises.

Huawei cars, not broken, not standing

Is it possible for Huawei to disrupt existing cars?

When everyone does not know what Tesla is, Huawei and Ren Zhengfei have made a very high evaluation of Tesla. At the end of 2013, Ren Zhengfei delivered an internal speech entitled "Huawei wants to catch up with Tesla's big turtle". In his eyes, Huawei is similar to BMW cars, belonging to the clumsy and slow climbing turtle, while Tesla is a running "god turtle".

At that time, Tesla was once on the verge of bankruptcy, but its subversive way of building cars made people vigilant. At that time, Huawei was able to debate "the catch-up between BMW and Tesla" as an outsider.

When talking about how to deal with the challenge of disruptive innovation similar to Tesla, Ren Zhengfei's response plan is, "When we find a strategic opportunity point, we can press up with thousands of troops, catch up with the latecomers, and dare to use investment to catch up with 'Tesla'."

It is estimated that Ren Zhengfei himself could not have imagined that after just 6 years, he would have to compete head-on with Tesla. But when it came time to meet the enemy, Ren Zhengfei hesitated.

On the one hand, this is because Huawei has the notoriety of "Black Widow" (spider), that is, "go your own way and let others have no way to go". Later, Ren Zhengfei changed his strategy, repeatedly mentioning that Huawei should make friends, not make too many enemies, and not kill opponents. On the other hand, it is because building cars, just like Huawei just started to make OEM mobile phones, is bitter, tired and does not make money.

Huawei tentatively chose another path, arranging "thousands of troops and horses" in the field of intelligent networking, not to make a "small fish" in the "big pond" of car building, but to make a "big crocodile" in the "small pond" of the "new four modernizations" of the car. In this way, huawei can not only give full play to Huawei's unique ICT advantages, but also appease the cooperative car companies as much as possible and stabilize the relationship of trust.

After three years of "overwhelming investment", in addition to not directly participating in vehicle manufacturing, Huawei has spread its stalls to almost the entire value chain of research and development, design, channels, services, and ecological construction. It has become a super integrator in the era of smart cars, such as a combination of Bosch and Google, of course, there is no point in discussing whether it can build a car or not.

However, the actual effect does not seem to be satisfactory. Judging from the 2021 financial report, the electric vehicle parts and software business have not entered the harvest period, while the sales of the partners Jihu and Xiaokang are dismal, and the SF5 of Xilix has even suffered a suspension of production, and all the production capacity has been transferred to the M5. As for the much-anticipated Huawei HI version, there is still no time point for listing.

As mentioned earlier, without terminal sales, it is difficult to iterate autonomous driving technology through data accumulation, nor can it obtain end users, and it is impossible to obtain the traffic entrance of future smart cars.

Huawei cars still need to break the game.

Yu Chengdong, CEO of Smart Car Solutions BU, said that in 2022, it will challenge the sales target of 300,000 vehicles and 100 billion annual sales. I understand Huawei's predicament and the rush to break through, and I have no doubt about Huawei's channel capabilities, but 300,000 vehicles are more like laymen's idiot dreams.

Tesla's annual delivery volume in China in 2021 is only 400,000 vehicles, asking the industry M5 on what basis? Weilai, Ideal and Xiaopeng, which have been operating for many years, have just exceeded 100,000 vehicles per year.

Wang Jun, COO of Huawei's smart car solution BU, believes that it is impossible to say that nothing is impossible, "This matter depends on two points, whether the first product is good enough, and whether the second sales channel is strong enough." "With all due respect, after experiencing the M5, you know that the noise control of Huawei's DriveOne electric drive system, the voice interaction of HUAWEI HiCar, and the sound quality of HUAWEI SOUND are far from reaching the level of "good enough".

In fact, there is a third point that determines the sales volume of M5, that is, production capacity. In order to ensure the delivery of new cars, Xilis has held an internal "oath meeting", but Xiaokang announced that its production capacity in March was less than 3,500 units.

It is undeniable that Yu Chengdong is the "key mr." of Huawei's consumer business, but Mr. Key has just stepped into the mobile phone industry, and has repeatedly encountered walls, building cars, similar to making mobile phones, and needs to come up with products that make users scream, if the product quality is uncontrollable, perhaps we should reflect on the existing manufacturing model.

Building cars, and making mobile phones is not the same, the automotive industry chain is far longer than mobile phones, the epidemic repeatedly superimposed the industry "lack of core and less electricity", as strong as Toyota, Volkswagen also had to endure the pain of the industrial chain.

When Tesla entered the public life, we realized that the car was not just a means of transportation, we learned what a software-defined car is, what is a vehicle OTA, and Tesla's disruptive innovations in domain controllers, battery technology, and even body die-casting technology, factory production line settings, etc.

Huawei has more than 700 mathematicians, more than 800 physicists, more than 60,000 engineers, with second only to Google's research and development investment, at present, what we see is far from the strength of Huawei cars, the current Huawei cars, more like the beginning of the Huawei mobile phone. Huawei's advantage is the long-term huge investment in research and development, but Huawei likes different routes and does not focus, which determines that Huawei cars need time.