NIO's battery swap strategy joins hands with Geely, and Huawei's alliance rescues the poor and the poor
With one hand, the car BU alliance was formed, and the other hand was replaced by the Hongmeng standard.
Written by | Senior Brother Yu
Edit | Zhao Jinjie
From questioning Huawei, to understanding Huawei, to joining Huawei – it's all happening in China's automotive industry.
On November 28, at the Zhijie S7 and Huawei's all-scenario press conference, Hongmeng Zhixing's first sedan, Zhijie S7, was officially released. Heavy information appeared from the very beginning of this press conference.
Yu Chengdong, Executive Director of Huawei, CEO of Device BG, and Chairman of the Board of Directors of Huawei's Intelligent Vehicle Solution BU, first introduced Huawei's three major businesses in the automotive field: the standard parts supply model, Huawei's HI model, which provides full-stack intelligent vehicle solutions for car companies, and Huawei's smart car model, which is deeply involved in product definition, design, marketing, and user experience.
Subsequently, Yu Chengdong began to announce the recruitment of "alliance members" to the outside world. Among them, Huawei's car BU has just announced that it will split to form a new company and seek independent financing from the outside. Yu Chengdong also took the initiative to mention this hot spot, and said: "We welcome our partners, as well as more powerful car manufacturers such as FAW to participate in the joint construction and jointly create this leading product of the ultimate intelligent car solution." ”
Yu Chengdong
The smart car business, which is not included in the new external independent financing company, was renamed "Hongmeng Zhixing" in early November this year. At this press conference, Hongmeng Zhixing's first sedan, Zhijie S7, was officially launched, with a price range of 249,800-349,800 yuan. Zhijie is a cooperative brand between Huawei and Chery, and Wenjie is a cooperative brand between Huawei and Cialis.
At the press conference, Yu Chengdong also officially announced two other members of Hongmeng Zhixing - JAC and BAIC. Subsequently, the two cooperative brands will also adopt the "X world" naming method. At that time, Huawei's HarmonyOS Zhixing will gather the "Four Realms".
However, whether it is attracting Changan and other car companies to invest in car BU, or gathering members of the "Four Realms", it is like Huawei has formed a "relief alliance", that is, it is specifically to support traditional OEMs that cannot catch up with the wave of intelligent and electrification transformation. According to Yu Chengdong's explanation: "Help car companies build and sell good cars." ”
The influence of Huawei's halo was first reflected in the stock price.
After Yu Chengdong threw an olive branch to FAW at the press conference, the stock prices of FAW Jiefang and FAW Fuwei rose in a straight line. Changan Automobile closed with a rise of 9.82% after the daily limit on November 27, and its share price reached 21.48 yuan. BAIC Blue Valley also rose 8.31% on November 28, and JAC Motors and Cialis followed suit.
I believe that the thrill of soaring stock prices will not be resisted by the managers of any company.
According to the plan, Huawei will set up a company engaged in the research and development, design, production, sales and service of automotive intelligent systems and component solutions, and package the assets of the car BU, and Changan Automobile and its affiliates will invest in the company, with a shareholding ratio of no more than 40%. Huawei's smart car business partners – Celis, Chery, JAC and BAIC – have also received invitations to invest in the new joint venture. Stimulated by this wave of market, it is believed that these car companies will only compete for the "Huawei halo" earlier.
But before that, the "HI mode", the core of Huawei's car BU, was not as popular as the smart car model. At present, only Changan's AVATR brand continues to choose the HI model, and the earliest cooperative BAIC Polar Fox has been marginalized. This, in turn, led to a huge investment in the car BU business in the early stage, which is still difficult to recoup costs.
According to Huawei's financial report, the revenue of its intelligent vehicle solution business in the first half of 2023 will be 1 billion yuan, and the revenue for the whole year of 2022 will be 2.077 billion yuan, accounting for about 0.3% of Huawei's total revenue in the same period. Chebu has 7,000 employees and invests tens of billions of yuan every year. At the beginning of this year, Yu Chengdong said: "If the sales volume exceeds 1 million, the car BU will be profitable." ”
On the one hand, Huawei's current way is to pull Changan and other large OEMs to support the continuous and long-term research and development of car BU with real money, and on the other hand, it is to let Hongmeng Zhixing, which has the blessing of "Huawei halo", ensure that one car will sell out one car, quickly increase the sales scale of cooperative models, and evenly share the R&D investment of car BU.
Therefore, the most important step is to strengthen the brand label of "Hongmeng Zhixing".
At the previous press conference on November 9, Yu Chengdong mentioned for the first time this new name that is very Huawei-Hongmeng Zhixing. Regarding the new name of this smart car model, he further explained: "Everyone can't understand the smart car mode, so the name of the new ecological car is 'Hongmeng Zhixing'. ”
On November 21, Huawei officially launched the official website of HarmonyOS Zhixing, with members including Wenjie Automobile and Zhijie Automobile, of which the Wenjie M9 and Zhijie S7 are displayed models. Judging from the official definition, Hongmeng Zhixing is actually a "fine decoration" for Zhixuan car.
The full name of HarmonyOS is HIMA, Harmony Intelligent Mobility Alliance, which is Huawei's Intelligent Vehicle Technology Ecosystem Alliance/HarmonyOS Intelligent Vehicle Technology Ecosystem Alliance. In essence, the adoption of the name Hongmeng Zhixing is Yu Chengdong's Plan B for forming a large ecology.
As early as March this year, in a promotional campaign for the Wenjie model, Huawei replaced the original "AITO Wenjie" with the promotional logo of "HUAWEI Wenjie", aiming to eliminate the brand recognition barriers caused by AITO Wenjie to consumers in actual sales scenarios. More importantly, Yu Chengdong hopes to unify the logos of various models in the smart car business.
However, before the large-scale spread, Ren Zhengfei, director and CEO of Huawei Technologies Co., Ltd., signed the "Resolution on Huawei Not Making Cars", once again reiterating that Huawei does not make cars. According to 36 Krypton, Ren Zhengfei also deliberately emphasized that "Huawei" or "HUAWEI" cannot be used in the publicity and appearance of the vehicle.
It doesn't work to use the word Huawei, but it is okay to use the word Hongmeng. HarmonyOS can not only unify the products of major brands under the existing smart car model, but also avoid disputes and other risks within the group. On the body of the M9 and S7, the logo of Hongmeng Zhixing will also be pasted to strengthen consumer awareness and brand loyalty.
To put it bluntly, as long as you see the logo of Hongmeng Zhixing in the future, it represents Huawei's "family bucket" ability to get on the car. In other words, with the logo of Hongmeng Zhixing, it is a serious "Huawei car".
Huawei's halo has gone from being ignored to being grabbed by everyone.
Before 2021, almost no one knew Cialis, and even the employees of Huawei terminals were not familiar with it. But during the Shanghai International Auto Show in April of that year, Yu Chengdong officially announced his cooperation with Cialis at Huawei's flagship store on Nanjing East Road, and the company's stock price rose all the way. As of November 29, the market value of Cialis reached 113.1 billion yuan.
Chery is the second car company to wear the "Huawei halo". But in fact, Chery's contact with Huawei is not too late, and even earlier than the emergence of the concept of Huawei's smart car. As early as December 2020, Chery signed a comprehensive cooperation framework agreement with Huawei. Four months later, Xiaokang Co., Ltd. at that time signed a contract with Huawei on the "Cialis New Energy Vehicle Project", and the smart car model was born.
In the cooperation with Huawei, Chery is sincere enough. In February 2022, Chery reported a "HW industrial chain cooperation project PPT" that the total project investment is 21 billion yuan, and it is planned to launch a B-class sedan in the second half of 2023, followed by a D-class SUV, and the expected production capacity of the project is also as high as 600,000 units, with an annual output value of more than 300 billion yuan.
As for the right to speak between the two sides, Chery officially revealed in July last year that "the latest planned new energy high-end brand is about to be revealed, and the new brand will be personally led by Chery Chairman Yin Tongyue"; at the 2025 Chery Technology Day in September of the same year, Yin Tongyue said, "Huawei has a very large cooperation project with us, and many models are designed and manufactured by Chery, which will be very large." ”
The fundamental reason why Chery attaches so much importance to cooperation with Huawei is that it is almost unable to catch up with the wave of change of new energy vehicles. In the first quarter of this year, Chery's cumulative retail sales of new energy vehicles fell by 67.8% year-on-year to 16,000 units, ranking 14th in China and the largest year-on-year decline among the car companies on the list. In the first half of this year, Chery New Energy's cumulative sales continued to decline, down 66% year-on-year.
Not to mention competing with BYD, even Chery New Energy, a new force in car manufacturing, can't beat it.
In the field of new energy, Chery belongs to the "early morning catch up late set", and has long relied heavily on mini vehicles in new energy sales. Taking 2022 as an example, the main models of its new energy sales are the low-priced QQ ice cream and Chery Little Ant, and the sales of these two models account for more than eighty percent. In order to change this situation, Chery has made frequent moves and launched a new electric vehicle brand, iCAR, to resurrect Chery Fengyun as a new new energy product series.
QQ ice cream, Chery little ants
But the only one that can take on the task of increasing the amount of energy, now only looks at the Zhijie S7 in cooperation with Huawei. The Zhijie S7 received 5,000 orders in less than 24 hours after the pre-sale began, and the orders have exceeded 10,000 so far. And the brother model of the Zhijie S7, the Exceed Star Era ES, has not made much noise so far.
After the question of Cialis and the wisdom of Chery, there are two cooperative brands of Hongmeng Zhixing that will be debuted. Yu Chengdong revealed at the Guangzhou Auto Show in November that BAIC and JAC will be next, and the brand name will continue to carry the word "boundary". Before Yu Chengdong's official revelations, there were rumors in the market that the "million-level Wenjie MPV" cooperated by JAC and Huawei will be mass-produced in Q2 next year.
The above four car companies all have one thing in common - they have fallen behind on the new energy vehicle track.
In the first half of this year, JAC New Energy only recorded sales of 67,000 units, a year-on-year decrease of 16.5%. BAIC once cooperated with Huawei in the HI model, but in the end it didn't work. From January to August this year, the cumulative sales of BAIC Blue Valley were only 46,400 units. As a comparison, the "new power sales champion" Li Auto sold 139,100 units in the first half of this year, while the second echelon Nezha Automobile and Weilai also sold 62,400 and 54,600 units respectively.
Obviously, the four major brands that have joined Hongmeng Zhixing are all households with sales difficulties, and they have turned to Huawei, which has become one of the few ways they have saved sales.
Under the halo, car companies are still dripping blood.
Even in the more than a year since cooperating with Huawei to build the Wenjie brand and effectively increase the sales of its own automotive products, Cialis has always been in a state of loss. On October 27, Cialis released the third quarter report, saying that the operating income in the third quarter was 5.648 billion yuan, a year-on-year decrease of 47.25%, and the net loss was 950 million yuan, and the revenue in the first three quarters was 16.68 billion yuan, a year-on-year decrease of 27.86%, and a net loss of 2.294 billion yuan.
After cooperating with Huawei, Celis has always been in a state of increasing revenue but not increasing profits, especially in the cost of sales. In 2022, the company's sales expenses will reach 4.82 billion yuan, a year-on-year increase of 276.55%, and the net loss last year will also reach 3.832 billion yuan. In 2023, the sales expenses of Cialis in the first three quarters will accumulate 2.671 billion yuan, a year-on-year decrease of 13.36%, but with the start of a large number of deliveries of the new M7 in the fourth quarter and the start of the launch of the M9, the sales cost of Cialis may increase again.
Ask the new M7
In addition, in terms of R&D investment, in the first three quarters of this year, the total R&D expenses of Cialis were 1.091 billion yuan, an increase of 20.42% compared with 906 million yuan in the same period last year. Behind the cooperation with Huawei, Cialis is not completely lying down, and all aspects need to invest money in it, cooperate with Huawei, and support the growth of the Wenjie brand.
Theoretically, the most direct way for car companies to make money at this stage is to rely on scale effect to make money.
According to the current product structure and gross profit margin of Cialis, a model like the M7 must sell more than 100,000 units in total to achieve a single vehicle revenue balance, and if you want to strive for another 10% net profit margin on top of this, then you need to produce an additional 100,000 vehicles. Even the high-priced M9 needs to be piled up in order to share the cost evenly.
In terms of money, according to a widely circulated saying, Huawei, as a parts supplier, developer and channel provider of Wenjie, has a share in the sale of Wenjie cars. Under the smart car model (now upgraded to HarmonyOS Zhixing), Huawei's share with OEMs is about 1:9, of which 2% is the technology licensing fee and 8% is the channel distribution fee.
In the case of making ends meet, if Cialis still has to invest a large amount of money in the new company of Huawei's car BU, and even does not rule out the subsequent increase in personnel and resources, this is likely to further deteriorate Cialis's financial situation. In response to the common saying, it will "make the family that is not rich in the first place even worse".
The bigger challenge is that now Cialis is no longer Huawei's "only child".
In the big alliance of Hongmeng Zhixing, the intellectual world has begun to compete for the scenery of the world. It is difficult to say whether the four major brands will be able to maintain a harmonious and consistent atmosphere when the joint model of BAIC and JAC debuts.
You must know that when there is not much food, it is a human survival instinct to protect and grab food, even in the face of brothers. After all, the "Four Realms" joining forces, even if it happens in film and television works, can be called a miraculous scene.