Huawei's automotive business is suffering heavy losses, and it is independent to go public to solve its difficulties?
As a technology company, Huawei has been expanding its presence in the automotive field in recent years. It does not directly build cars, but provides solutions such as intelligent driving and intelligent cockpit for car companies. At the same time, it also launched two cooperation models that are deeply bound to car companies, "Huawei Inside" and "Smart Car". Huawei's automotive business has been losing money, facing difficulties such as a shortage of funds and a lack of talent. It has been reported that Huawei is considering listing its automotive business on its own to solve development bottlenecks.
For Huawei, a technology company, it seems difficult to enter the field of automotive intelligence, but its layout can be described as well prepared. As early as 2019, Huawei established the Intelligent Vehicle Solution BU and began to export technologies such as 5G communications, operating systems, and chips to the automotive industry.
By 2022, Huawei's automotive solutions will be more mature, providing integrated products such as intelligent driving, intelligent cockpits, and on-board chips. Under this "Tier 1" model, Huawei plays the role of an incremental component supplier, injecting technological strength into traditional car companies.
Huawei is not satisfied with being a simple supplier, it has also launched the "Huawei Inside" vehicle solution. In HI mode, car companies can use Huawei's full suite of intelligent vehicle solutions, including computing architecture, intelligent cockpit, and intelligent driving, to achieve a high degree of intelligence.
Further, Huawei has also proposed the concept of "smart cars", which is seen as the closest business model to building a car. Under this model, Huawei will be deeply bound to car companies such as Cialis and Chery, participate in the product definition and marketing of the whole vehicle, and the cooperative models will also be sold through Huawei channels.
Huawei has a long history of deployment in the field of automotive intelligence and has adopted a variety of flexible business models. It continues to increase investment in this field, and has now formed a relatively complete intelligent vehicle solution.
At a time when Huawei is ramping up its in-vehicle business, the loss of this emerging business is also becoming increasingly serious. According to reports, Huawei's automotive solution BU lost as much as 3 billion yuan in 2022. Faced with such a large loss, Huawei had to consider listing its automotive business independently to solve the problem of capital shortage.
According to industry insiders, the main reasons for the loss of Huawei's automobile business are: first, the lack of experience and resources in vehicle manufacturing; Second, there are differences with traditional car companies in the cooperation model, and there is a gap between the two sides in terms of intelligence and profit model.
Faced with the dilemma of losing money in the auto business, Huawei may consider listing it with independent financing as a solution. By going public independently, the automotive business will be able to obtain more capital investment and accelerate the pace of development. At the same time, it will also help attract more professionals in the automotive industry to join and make up for Huawei's shortcomings in vehicle manufacturing.
The road to an independent IPO has not been easy. First of all, there is a big difference between the automotive industry and Huawei's original communication business, and Huawei needs to rebuild the management structure and business model suitable for the automotive business. The automotive industry has a high threshold and requires not only a large amount of capital investment, but also a complete supply chain system. If Huawei wants to gain a foothold in this field, it will inevitably face many obstacles in the short term.
After Huawei's automotive business is independently listed, the most important thing is to clarify the direction and goals of development. Is it to focus on the research and development of core technologies such as intelligent driving, or to further expand into the field of vehicle manufacturing? This requires Huawei's in-depth consideration.
The automotive industry is very different from the communications industry and requires a more long-term commitment and patience. If Huawei's automotive business goes public independently and then maintains the existing cooperation model, it may be difficult to completely solve the loss dilemma. Only by clarifying long-term development goals and formulating practical plans for them can we truly achieve profitability.
Regardless of the path Huawei's automotive business will eventually take, intelligent and connected vehicles are the trend of the times. In this area, Huawei's technical strength is widely recognized.
Taking intelligent driving as an example, Huawei has been deeply engaged in this field for many years and has mastered a large number of core technologies. It launched the "intelligent cockpit" solution, which can achieve L3 level of intelligent driving, and plans to achieve L4 level by 2025. In terms of intelligent cockpit, Huawei has also launched its self-developed HarmonyOS in-vehicle system.
With the accumulation of these technologies, Huawei's smart models, such as the M7 and S7, have performed well in intelligent driving and intelligent cockpit experience, and have received good market responses.
There are also opinions questioning whether Huawei really has the ambition and determination to "build cars". Automobile manufacturing is a completely new field that requires a lot of manpower and material resources. Moreover, the threshold for the automotive industry is so high that it is difficult to see returns in the short term.
It remains to be seen what the ultimate goal of Huawei's automotive business will be and whether it will further expand into the field of vehicle manufacturing. However, it is certain that no matter what business model it adopts, Huawei will make efforts in the field of automotive intelligence and inject technological power into traditional car companies.
Connected cars are becoming the new development trend, which brings opportunities for technology companies to enter the automotive industry. As a leading technology company, Huawei has certain technological advantages in the field of automotive intelligence. However, its business model and ultimate goal are still to be clarified, which requires Huawei's in-depth thinking and planning.