Huawei's 1400 days of "not building cars"

Author|Light Cone Intelligence Zhou Wenbin, Editor|Wang Yisu

Even if there is only a layer of window paper left, it still attracts people's desire to discuss before it is broken.

On March 8, AITO Auto changed the previous statement of "AITO Ask the Boundary" in the multi-platform promotional copy, and began to use the new promotional copy of "HUAWEI Question".

Although Huawei's terminal explained that HUAWEI is a Huawei ecological car brand, it is a new business model created by Huawei. But this move has once again intensified the market's speculation about Huawei's own car manufacturing, after all, Huawei cars have been moving frequently since the beginning of the year.

In early February, Wang Jun, COO of Huawei Car BU and president of the intelligent driving solution product line, was suspended by the media, which the media interpreted as Yu Chengdong's "sole control" of the automotive business, personally building a car. At the end of February, due to the announcement of a winning document from China Construction Sixth Bureau, Huawei and Jianghuai Automobile cooperated to build a factory in Anhui Province to jointly develop a new generation of high-end intelligent electric vehicles, and the market also believed that Huawei was preparing for the factory.

To this end, Yu Chengdong had to personally explain, "(Wang Jun's suspension) is a normal personnel adjustment and change, and there is no change in the direction of (Huawei's car business). "Huawei does not build cars itself, but cooperates through the smart selection model."

Today, Huawei not only provides core software and hardware technologies such as electrification and intelligent components, but also involves product definition, user experience, quality control, channel retail, and brand marketing.

In 2002, Ren Zhengfei slapped the table and yelled: "Huawei will no longer make mobile phones, and whoever makes mobile phones will be laid off." However, at the end of that year, Huawei's mobile phone business was successfully established, and later became the world's TOP 3, with an annual revenue of 350 billion yuan at its peak.

Therefore, although since 2019, Huawei has always said that it does not build cars, and Ren Zhengfei even issued documents for this, everyone has always been skeptical about the matter of "building cars and not building cars".

But in fact, looking back on the past four years, you will find that Huawei may have had the idea of building cars, but now it is no longer important for Huawei to build cars or not.

On the one hand, Huawei has found a better way than to build a car itself; On the other hand, Huawei may have in fact completed the work of "building cars".

First, Yu Chengdong has no choice but to car

Counting up, Huawei entered the automotive field earlier than most new forces in car manufacturing.

In 2012, Huawei began automotive-related research and established the IoV Lab in 2014. Even Wei Xiaoli, as a representative of the new forces, was established one after another after this year.

Although it entered the game early, Huawei's center of gravity was not here at that time. After all, at that time, the smartphone war was in full swing, Huawei released the first mobile phone of the Mate series in early 2013, and then established the glory of Xiaomi at the end of the year. Under such an aura, the automotive business does not receive much attention.

At that time, Huawei's positioning of this business was only an extension of the communication business, "only focusing on the communication solutions of the Internet of Vehicles that it is good at", so in terms of internal organizational structure, it was naturally under the ICT committee headed by Xu Zhijun.

The automotive business really came to the fore six years later.

In April 2019, Huawei's rotating chairman Xu Zhijun first elaborated on Huawei's automotive strategy at the Shanghai International Auto Show, the most critical of which was "We do not build cars, but we will help customers build good cars through ICT technology." ”

Such positioning was logical for Huawei at that time.

On the one hand, although the chill of the smart car market in 2019 has not completely faded, the take-off curve of the new car industry has been clearly visible.

At the beginning of 2019, Tesla's Shanghai factory officially started construction, and localization was accelerated; NIO's stock price bottomed out, ideal ONE began to deliver, and Xpeng rushed to listing; In addition, Evergrande, which was not in crisis at that time, threw a lot of money after breaking up with FF and started a crazy buying and buying in the new car industry.

It can be said that everything points to the fact that the new car industry has really come to the eve of changing from quantity to quality. Huawei's time to show the market its thinking about cars and the entire automotive industry is opportune time.

On the other hand, Huawei's automotive business has developed five modules under the cloud-pipe-end architecture over the past six years: intelligent driving, intelligent networking, intelligent cockpit, intelligent electric, and intelligent vehicle cloud. It has accumulated products including lidar, MDC (autonomous driving computing platform), HarmonyOS cockpit, AR-HUD, and all-in-one powertrain.

In essence, at this time, Huawei is taking the same route as Bosch and wants to be a Tier 1 intelligent car. In Wang Jun's words at the time, "Huawei firmly follows the path of platform + ecology, provides everyone with the basic elements of automotive digital platforms, and reduces the difficulty of developing smart cars." ”

More importantly, Huawei at that time had deep pockets, not only was it not in a hurry to make money in the automotive business, but also had the confidence to continue to invest. According to 2018 data, Huawei's carrier business revenue was 294 billion yuan, consumer business revenue was 348.8 billion yuan, and enterprise business was 74.4 billion yuan. For comparison, Alibaba's revenue in fiscal 2019 was 376.8 billion yuan.

Not building a car is in line with Huawei's actual situation at that time, but the change comes from a paper sanction on the other side of the ocean.

In May 2019, Huawei was included in the "Entity List", which led to a series of chaos.

Without Qualcomm chips and Google suites, Huawei mobile phones that were once in full swing are losing ground in overseas markets. At the same time, Huawei's 5G communication business is also hindered in cooperation with governments. Now looking back at Huawei's mobile phone sales, May 2019 can serve as a clear dividing line.

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Commenting on Yu Chengdong and the business he is responsible for, Ren Zhengfei said: "It (consumer business) is an auxiliary industry, it is to help CNBG buy time, its purpose is to make money, lose money here, and when this side gets the money, it will charge and occupy Mount Everest." ”

Huawei's strongest competitiveness has always come from its R&D investment regardless of cost, but R&D investment needs money, and Yu Chengdong is the one responsible for making money for Huawei.

But now, Huawei's most profitable business has suffered an unprecedented crisis. Huawei began to divest Honor and suspend the launch of new mobile phone products; Ren Zhengfei, who has not appeared in public for a long time, also has to frequently appear in front of the camera for interviews, which boosts the confidence of employees and the market.

At this time, Huawei urgently needs a new growth point.

Coincidentally, at the same time that Huawei encountered Waterloo, the new car industry was developing rapidly.

According to the National Development and Reform Commission, sales of new energy vehicles in 2020 reached 1.367 million units, a year-on-year increase of 10.9%. In the stock market, NIO's cumulative increase in 2020 reached 1112.44%. Xiaopeng and Lili were listed in July and August respectively, with an increase of 185.53% and 150.70% respectively.

It can be said that the automotive business has become an opportunity visible to Huawei.

Against this backdrop, in November 2020, Ren Zhengfei merged Huawei Consumer BG and Automotive BU with a paper document, transferring the affiliation of Automotive BU from the ICT Management Committee originally headed by Xu Zhijun to the Consumer BG led by Yu Chengdong.

This merger, in addition to marking Yu Chengdong's formal takeover of Huawei's automotive business, also means that automotive BUs are no longer limited to ICT technology to do B business, but like terminal business, they can be directly oriented to consumers.

The automotive business solved Huawei's problem of needing new growth points, but Yu Chengdong's problem was not.

The problem is that when doing mobile phone business, Huawei has established a large number of offline sales networks. According to 2019 data, Huawei has 6,000 experience stores and more than 2,600 offline service centers around the world.

According to the recollections of people in Huawei's offline stores, offline stores mainly rely on mobile phones, but after being sanctioned, the supply of Huawei mobile phones is insufficient, Huawei smart screen offline sales are very small, many stores can only sell a few units per month, well-sold PC and tablet products are out of stock, and it is difficult to sell smart products such as audio and desk lamps that are not out of stock.

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For Yu Chengdong, how to deal with these stores has become an urgent problem to be solved. After all, on the one hand, many of these stores have signed long-term contracts ranging from many years, and Huawei is reluctant to accumulate offline resources for a long time.

Therefore, Yu Chengdong must find a product similar to mobile phones, which has high gross margins and can make money for Huawei, while being able to sell in offline stores and revitalize the previous channel resources.

Thinking about it, all Yu Chengdong can think of is a car. Yu Chengdong once said: "Mobile phone is a high-frequency, rigid demand, massive and high-value product, smart electric vehicles have a high unit price, high sense of value, and are the only products that can make up for the lack of mobile phones." ”

But at this time, Huawei, although it has technical reserves related to smart cars, does not build its own cars, and Huawei stores have no cars to sell.

On the other hand, Huawei's automotive business at that time only had two modes: "Huawei Inside" and "parts", of which Huawei Inside (HI mode) had just been released, and profits were still far away; The parts model itself was not very profitable, and coupled with the small scale at the time, the overall revenue was also limited.

These are obviously not enough for Yu Chengdong, who wants to make "big money", just as he mentioned that "Huawei wants to make high-end products, and will not involve the market below 200,000 prices". Hidden behind is its business logic of wanting to make more profits with high-end products.

But if Huawei builds its own car, this problem can be solved.

Taking the mobile phone market as an example, according to Golden Ten Data, the profit margin of Apple's mobile phone is as high as 58%, and Huawei's profit margin has also reached 10%. In contrast, Tesla and Ideal Bike gross margins are both around 20%.

Whether from the company or from the level of his own business, Yu Chengdong actually has no choice but to build cars.

Second, the smart car, a light in the cracks

For this only option, it is as fierce as Yu Chengdong, and it is not easy to promote.

As Xu Zhijun said, "Yu Chengdong just wants to build a car, but (unfortunately) he only has one vote." Obviously, there are not many executives who support car manufacturing, which is mainly related to Huawei's situation at that time.

On the one hand, before Yu Chengdong entered the automotive business, Huawei's automotive business has been following the Tier 1 route, from ICT-based automotive network to LiDAR, motor electric drive and other components, Huawei has accumulated many customers including Audi and Mercedes-Benz.

As can be seen from Huawei's annual report, as early as 2021, Huawei's intelligent automotive parts business has listed more than 30 intelligent auto parts and has developed more than 300 industry chain partners.

For Huawei, this part belongs to the market that has been eaten, and its own car construction will not only face the risk of car failure, but these car companies that originally used Huawei technology and components will inevitably not cooperate with Huawei, after all, no company will be willing to put their lifeblood in the hands of opponents.

Therefore, the choice in front of Huawei is to continue to follow the supplier route, which may not have the high profit of independent car manufacturing, but the victory is stable. In addition, at that time, Huawei was facing an external environment with ups and downs, and stability was even more important.

But without building cars, Huawei lacks a core product to make up for the lack of the mobile phone market and provide value for offline stores. Therefore, within Huawei, building a car or not building a car is also a dilemma.

Yu Chengdong naturally belongs to the radical faction. In a way, Yu Chengdong is a natural risk lover, he is always confident, never admits defeat, and habitually takes risks.

Some old Huawei employees recalled that when Yu Chengdong first arrived at Huawei, he was still a newcomer, and he dared to call Ren Zhengfei with his colleague's landline, and told Ren Zhengfei that I had found something new.

This personality has since been reflected in Yu Chengdong's market style, for example, when he was in the wireless business unit to enter the European market, he was able to withstand the pressure, despite the opposition of most people to promote multicarrier technology, which later made Huawei's wireless product revenue rank second in the world.

After being transferred to the mobile phone department, Yu Chengdong also opened up and cut 30 million low-end machines and feature phones, which was the main source of income for Huawei's mobile phone business at that time.

Yu Chengdong's decision not only cut off internal financial resources, but also left suppliers with no money to earn, which also led to Yu Chengdong during that period of time, not only unpopular with suppliers, but also faced doubts within the team.

Yu Chengdong not only likes to "risk the world's great opposition" internally, but after taking charge of consumer BG, he often speaks amazingly in public, putting satellites and frontal hard friends, so netizens also gave Yu Chengdong the nickname of "Yu Dazui".

Under the influence of various factors such as traffic, strength, precedents, and various factors, "whether to build a car" has developed from a dispute over Huawei's internal route to the focus of external discussions, making Huawei's position in the market more and more embarrassing.

In the end, it was Ren Zhengfei who hammered the final word and issued a 3-year document: Huawei does not build complete vehicles, and who will make suggestions to build cars in the future, interfere with the company, can be transferred from the post, and look for another job.

Ren Zhengfei once again calmed the controversy, but the problem belonging to Yu Chengdong remained unresolved - what to make up for the gap after the loss of the mobile phone business contraction? What products will the store sell? What do dealers depend on to survive?

In April 2021, just five months after Huawei announced the integration of automotive BUs into Consumer BG, Huawei Smart Car Terminal officially released its first smart model, the Cialis SF5.

Different from the Huawei Inside model, Huawei Smart Car not only provides parts and solutions, but also fully participates in product design, marketing, and sales channels. To put it simply, other models are that the car company is responsible for the final result of the car, but the smart car is Huawei's responsibility for the final result of the car.

This model was proposed by Yu Chengdong after entering the car BU, and it is probably the only way he can think of to deeply participate in car building and solve his own problems under the premise of "not building a car".

First Finance and Economics has reported that according to the cooperation plan circulating on the Internet, the share between Huawei and Smart Selection manufacturers is about 1:9, that is, a car priced at 250,000 yuan, Huawei can get about 26,000 yuan. Among them, the technology licensing fee accounts for 20%, and the rest is Huawei's sales expenses.

In addition, in the smart car mode, the three electric systems, intelligent cockpits, etc. may also be provided by Huawei, according to this estimate, Huawei's profit will be higher. However, this sharing model has not been confirmed by Huawei and Cialis.

It is worth noting here that although the integration of automotive BU into Consumer BG was confirmed in November 2020, Yu Chengdong officially became CEO of Automotive Solutions in May 2021.

In other words, the smart model has begun to be laid out before this, which also reflects Yu Chengdong's eagerness to find new growth points.

But in this process, Yu Chengdong has still been emphasizing that smart cars are not "building cars".

"Our ecological alliance is definitely not an OEM model, not to put some intelligent things in and help it market, but joint development." Yu Chengdong said that car companies can only make small money under the foundry model, but the joint development model will leave most of the profits to car companies. Huawei wants to help car companies sell more cars and make a lot of money, so that Huawei can supply more parts, which is the real business logic behind Huawei's car sales.

To put it simply, Huawei has completed deep binding with car companies through smart cars, and the increase in sales of car companies has led to an increase in the sales of Huawei components.

But now the problem facing Huawei and its car partners is that car companies lack competitiveness due to insufficient technology and capabilities. Therefore, Huawei's idea is that Huawei has the technology and experience in creating high-end products, and can work with car companies to do a good job of cars, and even help car companies sell cars.

"If cars don't sell well, how can parts sell? It is impossible to do parts model and become an industry leader such as Bosch. Now we do intelligent components, we need to continue to iterate, need to constantly upgrade and develop; Now that we have entered the era of intelligence, we need to meet the market demand through the smart car model. Yu Chengdong mentioned in a recent internal interview.

During the 2021 Shanghai Auto Show, Huawei announced that it would help Cialis sell cars, and Yu Chengdong said at the time that Huawei has more than 5,000 high-end experience stores and 60,000 retail and service outlets, which is an advantageous channel resource that traditional cars cannot match.

Soon after, the layout of Huawei Experience Stores in Beijing, Shenzhen, Hangzhou, Chengdu and other cities began to change, and the mobile phone booth that used to be at the heart of the store was replaced by a car. According to the plan at that time, Huawei will sell cars in 200 experience stores by the end of July, and expand to more than 1,000 by the end of the year.

Huawei's channel and brand endorsement effect is immediate, from the Baidu index can be seen that after the 2021 Shanghai Auto Show, Cialis' search index increased from the previous 338 to 11478, an increase of 3295.85%. By May, Cialis had ordered more than 6,500 units a month, and the monthly order volume exceeded that of NIO.

However, although Huawei brought rich traffic to Cialis, Cialis did not catch it. Due to the rushed layout, the Cialis SF5 was modified from the previous old model, which also led to endless product problems. At its peak, there were more than 100 complaints about Cialis SF5 on the black cat complaints alone, involving problems such as car stuttering, false battery life, and steering wheel deviation. Product problems also directly affect the sales of Cialis, which from April to November was only 7,080 units.

Aware of the problem, Huawei is also seeking changes in time.

In December 2021, Huawei announced that it has partnered with Cialis to launch AITO, a full-premium brand. Soon, on December 23, the first model of the AITO brand was officially launched, and successively replaced the position of Cialis Huawei Smart SF5 and began to be exhibited in Huawei offline stores.

Correspondingly, the previous Cialis SF5, as an iterative product, was soon also exposed to rumors that the store suspended the acceptance of reservations and may be discontinued. After that, it is time for some Cialis SF5 owners to protect their rights.

While SF5 owners are defending their rights, Huawei M5 is also making great progress in the process of Yu Chengdong standing on the platform.

In order to sell the car, Yu Chengdong even released a bold statement that he would overturn Tesla within one year, far surpass them in the second year, and later kill the BBA space of 300,000 to 500,000 cars.

It is naturally impossible to flip Tesla, but throughout 2022, a total of 76,000 units were sold, which is the achievement of other new car-making forces for three to five years.

And this achievement, in addition to Huawei's brand and channel blessings, is also inseparable from Yu Chengdong's diligence.

Yu Chengdong is a workaholic, much like Musk.

Musk wears many hats, working about 16 hours a day, 7 days a week, which belongs to the real 007. Yu Chengdong in the work is also very hard, he mentioned in the interview that he is working part-time as customer service in his spare time, visiting stores on weekends, and personally introducing products when encountering customers.

In December 2022, Yu Chengdong was interviewed by CCTV Finance, and the day before the interview, he also worked until 1 a.m., and all the rest time on the day of the interview was almost occupied by work. Yu Chengdong said that all his time is spent helping car companies build good cars.

Like Musk, Yu Chengdong is also active on the Internet to guide the wind of public opinion and always puts forward some seemingly impossible goals. For example, when the M5 first came out, Yu Chengdong's flag was to reach 300,000 annual sales, but in fact, the annual sales were only 76,000 vehicles.

Similarly, when SpaceX was first founded, Musk also boasted about launching two rockets in Haikou in three years, but when Space X's first rocket was really successfully launched, it was six years later.

Musk later explained that he did overlook many of the practical difficulties in the implementation process, or that he thought they could be solved smoothly.

Yu Chengdong's 300,000 target is also particularly confident, he believes that if Huawei has 1,000 stores selling cars, each store can sell 300,000 cars a month, and it can sell 300,000 vehicles a year.

Yu Chengdong has also reflected on this problem, in order to motivate himself and the team, everyone needs a higher goal to motivate themselves. It is precisely because of this kind of motivation that they are often really confident in this matter.

In essence, whether it is Musk or Yu Chengdong, behind their "wild words", they show an extreme confidence and optimism, and it is this attitude that pushes them to achieve these seemingly impossible goals again and again.

Third, the dragon gave birth to nine sons, why are they different?

After finding the balance point of smart cars, whether Huawei can build cars should no longer be a problem. The market once again doubted this, starting with a personnel change within Huawei.

On February 6, a photo of Yu Chengdong and Tan Benhong, chairman and CEO of Avita Technology, visiting Avita's new car circulated on the Internet. In the photo, Tan Benhong and Yu Chengdong are chatting, and Xu Zhijun is standing on the side holding hands. In this seemingly harmonious picture, only the figure of Wang Jun, who was previously responsible for docking with Avita, is missing.

After that, the market reported that Wang Jun was suspended because the HI model was not going well, and some industry insiders interpreted it as Yu Chengdong, a "car manufacturer", who monopolized power in Huawei's car BU; Coupled with the imminent expiration of Ren Zhengfei's "ban" on not building cars for three years, and the news that Huawei and Jianghuai Automobile have cooperated to build factories, "Huawei will build cars" has naturally become the most trafficked answer.

In order to calm the anxiety of partners, Yu Chengdong repeatedly stressed that "Huawei does not need to build its own cars", "Car factories already have the ability to build cars, Huawei will not build factories and buy production lines, which is a waste of social resources." Although this statement is very frank and true, in the process of its deep participation in the HUAWEI question, Huawei has mastered the most valuable link, and "build or not" is no longer important.

In addition, objectively speaking, the document of "not building cars for three years" has also made Huawei miss the best time to enter the car building.

In December 2022, at the China Automotive Forum, Chi Linchun, President of the Marketing and Sales Service Dept of Huawei's Intelligent Vehicle Solution BU, said: "Huawei has invested about US$3 billion in auto parts R&D in the past three years, equivalent to more than RMB 21.7 billion, and recruited more than 7,000 R&D personnel. ”

Yu Chengdong is also under great pressure, at the China Automotive Blue Book Forum in July 2022, Yu Chengdong mentioned that automotive BU is Huawei's only loss-making business, spending more than a billion US dollars a year.

Therefore, for Yu Chengdong now, how to make Che BU profitable has become a more urgent problem. Therefore, at the end of 2022, Yu Chengdong proposed internally that Huawei Car BU should be profitable in 2025. To achieve this goal, Huawei must first help car companies sell 1 million vehicles.

In order to achieve this goal, Yu Chengdong is actively promoting the cooperation between Smart Car and more car companies.

On February 25, Huawei and Cialis signed a deepening joint business agreement to achieve production and sales of 1 million new energy vehicles in 2026, and the two companies will further promote the establishment of a joint innovation lab. In addition, this year Cialis will also release its first flagship model under the new platform.

On February 27, China Construction Group announced that with the announcement of a winning document of China Construction Sixth Bureau, the cooperation between Huawei and Jianghuai Automobile surfaced. Yu Chengdong also made it clear in an interview that Jianghuai will become the second car company to cooperate with Huawei in smart selection mode after Cialis.

In addition, Yu Chengdong has been going to Wuhu every week for some time to negotiate with Chery's Gao Xinhua. At present, Gao Xinhua serves as the executive deputy general manager of Chery Automobile Co., Ltd. and the president of the Automotive Engineering Technology R&D Institute.

In order to attract car companies, Yu Chengdong even released a ruthless word: "The global automotive industry is shuffling, just like the situation in the mobile phone industry more than ten years ago, many companies will definitely merge and adjust in the future, and a large number of people may die, we believe that the manufacturers who work closely with us will become a few survivors." ”

It is foreseeable that under the promotion of Yu Chengdong, Huawei's smart car cooperation companies will increase.

At the end of February, Yu Chengdong first mentioned the concept of "Huawei automotive ecosystem" in an interview. "We work with relevant car companies to build an ecological alliance and platform, build their product experience to the extreme, jointly develop and develop with car manufacturers, and provide all-round control such as intelligence, software, and chips, and believe that the smart car model will not be understood by others, and in the end, they will not be able to catch up."

"We hope that the amount of smart selection and HI mode can be up, and the amount of smart selection may be larger. Either way, we can do it. Yu Chengdong promised that car companies that work closely with Huawei will be the first to become profitable within a year or two, and will become one of the most profitable car companies in China.

Yu Chengdong believes that the intelligent upgrade of various parts of the car is the core of the future competition between China and American automobile brands, and the next 2~3 years is the window period of intelligent networked vehicles, and Huawei must seize the last time window.

To seize this window period, Yu Chengdong is also under considerable pressure.

In 2022, sales will grow rapidly, with a cumulative sales of 57,777 units in the first 10 months, taking less than a year to go through the journey of other new car forces. However, after October, sales began to decline. In January 2023, the number of new vehicles delivered in a single month was 4,475 units. Compared to the previous month, sales volume fell 56% month-on-month.

Judging from the sales trend of the world, the annual sales of 100,000 vehicles is not easy to break through. In order to achieve Yu Chengdong's annual sales target of 1 million vehicles, Huawei's automotive ecosystem needs to cooperate with at least ten more car companies.

However, a new problem is in front of us, different car companies and different brands of cars are deeply involved by Huawei, using Huawei's technology, and selling in Huawei's channels, so how to achieve product differentiation and form differentiation has become particularly important.

For example, if Huawei has new breakthroughs in technologies and products such as autonomous driving and intelligent hardware, whether it is standard equipment for all series or priority for use in some models, it will become a problem, so how to achieve "nine sons of the dragon, each different" is indeed a problem.

Yu Chengdong himself is aware of this problem, and mentioned in an interview with The Paper: "Through the establishment of the Boundary Ecological Automobile Alliance, select a few car companies to join, join forces, jointly develop, create the experience to the extreme, do a good job in product differentiation, and jointly seize the time window for the transformation of the automotive industry." ”

On the other hand, if these ecological car companies all enter Huawei's sales channels and use the same sales system, how to distribute benefits will also become a problem. For example, some netizens mentioned on Weibo that they originally wanted to go to Huawei stores to see the new car Avita, but Huawei's sales tried to recommend it to ask questions.

On March 3, Avita announced that it plans to enter more than 20 Huawei stores for sales in the first half of this year, becoming the third car to enter Huawei stores after Qianjie and Beiqi Extreme Fox.

With the increasing number of Huawei smart car and HI model models, how to balance the interests of various brands on the sales side will also become a problem that Huawei needs to solve.

Nowadays, the competition for new energy vehicles has become more and more fierce. In January this year, Tesla sharply cut the price of its cars in the global market, with discounts of up to 20%; By early March, Tesla had lowered the price of some models in the United States for the second time this year.

At Tesla's investor day, Musk said that "there is no one who does not want a Tesla, but many people cannot afford it." "So as long as the price is good enough and affordability is improved, sales can grow naturally."

This statement made Tesla's strategy of price war obvious, and also brought great pressure to all domestic new energy vehicle companies, including HUAWEI. In January this year, after Tesla cut prices, Qianjie became the first brand to follow up on the price reduction, with a decrease of up to 30,000 yuan.

At the investor day, Tesla also announced that integrated die-casting, the construction of its own lithium mine refinery, permanent magnet motors that do not use rare earth materials at all, and a new generation of automotive platforms that reduce silicon carbide by 75% will further reduce Tesla's costs.

Therefore, when the opponent's blade has been waved in front of him, for Huawei Auto, it is no longer important to build a car or not. On the contrary, how to use technology to help car companies reduce costs, improve product strength, gain competitive advantages, and complete the goal of selling 1 million cars in the competition of the new generation of automobiles has become a more realistic problem.