BYD chose Nvidia instead of Huawei chips, and the reasons behind it are thought-provoking
Text/Wang Xinxi
At the 2024 NVIDIA GTC conference, Nvidia announced in a high-profile manner that BYD, the world's largest electric vehicle manufacturer, will use NVIDIA's next-generation smart car chip Thor, which has aroused great attention and public opinion controversy.
The main concern of everyone is, why BYD does not use Huawei chips, but uses NVIDIA chips? Some netizens expressed their disappointment with BYD. Let's talk about today, what are the underlying reasons behind this?
From Huawei's rejection of BYD to BYD's rejection of Huawei
When an enterprise makes the choice of partners, it must first be at the level of business reality, and it will be in the interest of itself to make this choice. The second is the consideration of market competition factors.
In fact, both Huawei and BYD know that both sides will be each other's strongest competitors in the future. From the perspective of China's new energy vehicle pattern, Huawei's potential and sharpness are revealed, Huawei's first battle, is to stick to the ideal to fight, after the question of the world M9 came out, the ideal momentum downward trend is obvious, in the past, the ideal has no opponent in the new forces, and now, the ideal of the biggest opponent is to ask the world.
Now BYD is under a lot of pressure, BYD's past opponent was Tesla, but Huawei may be a stronger opponent than Tesla. Because Huawei's model wants to build an automobile alliance, this automobile alliance fully covers the low, medium and high-end markets, and some industry insiders have estimated that in 2025~2026, Huawei's annual sales of automobiles may be as high as 1 million. So in the battle for the automobile stock market, it is undoubtedly BYD's market share that needs to be grabbed.
The core battlefield of BYD and Huawei is in the field of intelligent driving. If you still have the impression, Huawei rejected BYD's cooperation some time ago. According to a report by 36Kr, while promoting the investment process with DJI, BYD had intended to contact Huawei's car BU, but the latter believed that there was little room for cooperation between the two sides and declined. Huawei Car BU took the lead in cooperating with Changan Automobile, and then invited car companies such as Celis, Chery, JAC, BAIC, Mercedes-Benz, Audi, and FAW to participate in the financing of the joint venture, and did not throw out cooperation intentions to the giant BYD.
Therefore, before this, Huawei had long rejected BYD's cooperation. Sanden is BYD's signboard, and intelligent driving is Huawei's big killer. If BYD has the strength of three electric vehicles + the strongest intelligent driving ability, then BYD will suppress the partner car companies of Huawei Cialis and Changan Automobile. Therefore, Huawei wants to leave its core competencies to its own automotive alliance.
In fact, even if BYD comes to the door to cooperate with Huawei at the chip level, the latter will most likely not be able to meet BYD's requirements.
With BYD's size, Huawei cannot ensure the stability of chip supply, and the gap between performance and NVIDIA is still there
Another reason for this is that Huawei is not the best choice in terms of supply stability and cost performance of intelligent driving chips. From the perspective of Huawei's strength, Huawei's artificial intelligence chip is already a strong competitor of NVIDIA, according to the data, Huawei has been involved in automotive communication modules for a long time, and most of the communication modules of the world's high-end models are designed and manufactured by Huawei.
At the level of intelligent driving chips, Huawei is very strong, but the gap with Nvidia is still there. The MDC610 and MDC810 are both intelligent driving computing platforms launched by Huawei. The AI computing power of the MDC610 is 200 TOPS, while the computing power of the MDC810 is up to 400 TOPS, which is twice that of the MDC610.
At this time, Huang Jenxun revealed at the conference that BYD uses Nvidia's on-board chip Drive Thor, Drive Thor is NVIDIA's next-generation on-board chip, and the computing power of a single chip has reached the terrifying 2000 TOPS level, and the computing power has been upgraded by 8 times, which is 5 times that of Huawei's MDC810. Under this computing power, Thor has been able to realize the unification of the computing unit in the car, and handle the intelligent driving and intelligent cockpit of the whole car through a single Thor. And NVIDIA also considers the fragmentation of today's car machine system, Thor can run Linux, Android, QNX three systems.
Prior to this, some industry insiders revealed that Li Auto would use NVIDIA's Thor chip. The industry insider was amazed, and after reading the content of NVIDIA's previous press conference, it turned out that it was so powerful that it was so exaggerated.
In other words, once BYD uses NVIDIA's on-board chip Thor, the computing power will greatly exceed the existing domestic related chips, and BYD's full-stack self-research capabilities will be matched with Thor, and the intelligent driving ability may form a qualitative leap.
In other words, from the competition of intelligent driving ability, BYD may not be afraid of Huawei, or even suppress one end.
In fact, as early as the beginning of this year, Great Wall Motors, Li Auto, Zeekr, and Xiaomi Auto reached on-board autonomous driving platform cooperation with NVIDIA, and BYD is not the first time to cooperate with NVIDIA. Strength determines that NVIDIA, as a key role and leading position in the field of automotive intelligent driving, is irreplaceable at present.
Some time ago, Yu Chengdong said that it was less than 300,000 yuan, and the cost was difficult to come down, which was determined by Huawei's supply chain production capacity.
What is the volume of BYD? Last year's annual sales exceeded 3 million vehicles, and this year's BYD target is 3.8 million vehicles, with Huawei's own Zhijie S7 sales, Yu Chengdong admitted that it was affected by the lack of cores, and he himself also had to purchase a large number of chips such as Qualcomm Intel in the United States.
For a head like BYD, the stability of chip supply is a lifeline, which is also a lifeline to ensure that sales targets are achieved. With BYD's size, Huawei cannot ensure the stability of chip supply. Moreover, there are a lot of chips used in electric vehicles, and the intelligent driving chip and the car machine chip are only part of it.
What really involves the underlying control of the vehicle is the MCU chip and IGBT, and BYD's automotive-grade MCU and IGBT shipments have the largest market share, and they are designed and manufactured by themselves, so Wang Chuanfu has the confidence to say that the chip is man-made, not made by God, but now many people question BYD's words, in fact, this is the truth.
From the perspective of brand premium, the king does not see the king
Ideal, BYD, and Great Wall are all domestic head car manufacturers, and the reason why they all choose to cooperate with Nvidia instead of Huawei chips is the same as that mobile phone manufacturers do not use the HarmonyOS operating system, because Huawei is a competitor on the same track, while Nvidia is a third-party supplier and has no direct competition.
In fact, in addition to Huawei, domestic chip manufacturers such as Horizon and Cambrian are actually very good, Horizon is second only to Nvidia, and BYD is also a big customer of Horizon, therefore, BYD is also supporting domestic chips. It also shows that for the head automobile manufacturers, they are more inclined to find a third-party supplier who is not involved in car manufacturing, so as to avoid the situation of being both a referee and an athlete.
Whether it is mobile phone hardware manufacturers or car manufacturers, there is a fierce hand-to-hand combat and market battle, if there is no choice at all, from the perspective of interests, it is difficult for them to support the products of competitors, because it means that their brand premium is suppressed. For cars in the same price range, Huawei brands have to suppress other brands.
In Chinese chess, there is an unwritten rule that "the king does not see the king", that is, the generals of the two sides cannot face each other in the same straight line.
Two strong people in the same field generally don't come together.
Breaking the involution and becoming the king overseas, BYD has the right to go its own way
Another of Wang's big ambitions lies in the global market. Last year, BYD's annual sales exceeded 3 million, surpassing Tesla to rank first in global electric car sales. The reason for cooperating with NVIDIA is also to enter the European and American markets more smoothly.
According to the data, in 2023, BYD will enter 58 countries and regions around the world, exporting a total of 242765 passenger cars, a year-on-year increase of 334.2%. But it accounts for less than 10% of exports.
BYD's export proportion is not high, because it is very difficult to enter the European and American markets, and the automobile market has always had various hidden trade barriers in Europe and the United States, because of well-known reasons, if Huawei chips are used, it is even more difficult to enter the European and American markets. The use of Nvidia intelligent driving chips in the European and American markets encountered relatively small thresholds and resistance.
The Chinese market is an open market, and the automotive industry has always been a globalized industry. According to industry estimates, BYD's nine major factories in the country are full of 3.5 million vehicles, and what should be done with the extra 300,000 vehicles? This may mean that BYD has to take from the increase in the international market.
Therefore, from the perspective of market competition, in business, from the perspective of intelligent driving ability, market competition, chip supply capacity, chip cost performance, brand premium and global market development and other factors, BYD's choice of Nvidia is a rational business consideration, we should encourage domestic cars to go out, break the involution, and be the king overseas, BYD also has the right to go its own way.
In the long run, product experience is the core factor to retain consumer reputation, and consumers will also give the final answer.
Author: Wang Xinxi, Senior Reviewer of TMT This article is not reproduced without permission