Huawei ultimately failed to become the “Bosch of the smart car era”

What is even more commendable is that the revenue-generating effect brought by the smart car selection business to Huawei is also good.

According to media reports, the revenue sharing between Huawei and Cyrus in the World Series is 1:9. For every M5 sold, Huawei can get about 26,000 yuan, and for every M7 sold, it can get 35,000 yuan. .

Of the money allocated, 20% is about Huawei's technology licensing fee, and the rest is earned by the store. That is, for every Wenjie M7 sold, the store can make a net profit of about 30,000 yuan.

The contrast between the bleakness of the HI mode and the "scenery" of the smart car selection mode prompted Huawei's top management to make new judgments.

There are rumors in the industry that Huawei's smart car business is using three models to race horses. Whoever comes out first will get greater support in terms of resources.

In 2022, Ren Zhengfei mentioned in his famous "Cold Theory" article "The entire company's business policy must shift from the pursuit of scale to the pursuit of profits and cash flow": "Smart car solutions cannot spread out a complete front, and the scientific research budget must be reduced. To strengthen the business closed loop, R&D should take a modular approach, focusing on a few key components to become competitive, and the remaining parts can be connected with others.”

According to analysis by industry insiders, the implication is that Huawei's HI model of automotive BU needs to be reformed, from providing full-stack solutions to focusing on key areas. "Business changes have accelerated personnel adjustments, and Wang Jun may have been suspended as a result."

The victory of the smart car selection model undoubtedly makes Yu Chengdong the biggest beneficiary of this personnel transfer. The outcome of the horse race has been decided, which means that Huawei will reduce internal consumption of resources and gather more resources to promote the commercialization of the smart car selection model.

Huawei no longer targets "Bosch". Will Yu Chengdong build a car this year?

After Yu Chengdong takes sole control of BU, another issue worthy of attention is where should the parts model and HI model business go? Can they continue to be retained?

During the "Wang Jun period", CheBU hopes to become an auto parts supply giant such as Bosch, Continental, Denso and Valeo in the field of intelligent connected electric vehicles. Wang Jun once told Caijing magazine that Tier 1 of China's auto parts industry , Tier2 is too fragmented and there are no giants. "The industry needs a company to try to do this, and Huawei happens to have this capability."

However, Yu Chengdong is "not too keen" on this goal, and even criticizes the parts model.

At the Guangdong-Hong Kong-Macao Greater Bay Area Auto Show in May 2022, Yu Chengdong criticized the traditional parts sales model as being unable to adapt to the requirements of the era of intelligent connected electric vehicles.

"Traditional car manufacturers ask Huawei to provide solutions, cut out more than 20 components, and invite bids for design separately. This way they cannot achieve the intensification, low cost, and high reliability of other people's three components. This model is very deceptive."

He added that the poor experience of a car based on this model is like "there are ten thousand alpacas running in my heart, and I feel like I am broken inside. I really want to curse!"

Yu Chengdong is not very interested in HI mode.

Neither the Smart Car M5 nor the M7 have the "Huawei Family Bucket". In terms of smart driving, they respectively use Bosch's L2 driving solution and longitudinal parking solution instead of the solution of Huawei's ADS department.

As for the Wenjie M9, although it is reported that it may be equipped with Huawei's ADS high-end autonomous driving system for the first time, it has also introduced two external suppliers, Yuanrong Qixing and Qingzhou Zhihang.

In addition, the lidar on Wenjie M9 is also suspected to use products from other companies: On February 7, 2023, Sagitar Juchuang announced that it has obtained the appointment of Cyrus Automobile, and the cooperative model will be mass-produced and launched in 2023. The launch time of Jie M9 coincides with that.

Smart cars do not entirely use HI mode solutions, but on the other hand, HI mode partner car companies are moving closer to "becoming" Huawei smart cars:

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• In September 2022, BAIC Blue Valley, the parent company of Extreme Fox, signed a "Comprehensive Business Deepening Cooperation Agreement" with Huawei. The two parties agreed to put the Extreme Fox Alpha S Huawei HI version in Huawei stores by the end of the year;

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• In December 2022, Avita and Huawei reached an agreement, and its first model, Avita 11, officially entered Huawei's flagship stores in Beijing and Shenzhen.

At the same time, Huawei's "smart car selection" business continues to expand, adding new partners such as Chery and Jianghuai.

In addition, BAIC also plans to jointly develop a smart car selection project with Huawei, internally codenamed X80, which is based on the Extreme Fox platform but will not use the Extreme Fox brand. It is expected to be launched in 2024 and will be sold in Huawei stores.

"IT Times" reported in November 2022 that the first version of the fully functional prototype was almost ready. The article also mentioned the following details: JiHu’s internal employees revealed that when the smart car selection project was still in the project establishment stage, Huawei sent more than a dozen people to the BAIC factory. It's just single digits, and it's been reduced by more than 70%.

The priority between HI mode and smart car selection mode is clear to Yu Chengdong.

On the other hand, in order to cope with more smart cars "entering the store", Yu Chengdong also called Huawei terminal's major retail partners in September 2022, saying that Huawei will continue to deepen its car manufacturing, and in the future, all the cars that can be sold in the store will be added. To reach 12-13 cars. "Everyone must dare to open a large store with an area of ​​more than 1,000 square meters, otherwise you will not be able to fit it in your store in the future."

With Smart Cars so popular, will this be the end of Yu Chengdong’s automotive career?

Everyone knows that Yu Chengdong has the ambition to "build a car", but due to the limitation of "only one vote", he had no choice but to accept the voting result of Huawei's senior management deciding not to build a car.

On October 26, 2020, Ren Zhengfei issued a blockbuster resolution, once again reaffirming that Huawei will not build complete vehicles, and issued a stern warning: "Whoever proposes to build cars in the future and interferes with the company may be transferred from their post and find another position." This was later deemed A red line for the automotive business.

However, this does not completely eliminate the possibility of "Huawei building cars". The resolution still leaves room. At the end of the document, it is clearly marked: This article will take effect from the date of issuance and will be valid for 3 years.

It can be seen from the car BU that after several rounds of organizational structure and personnel adjustments, Yu Chengdong has cleared almost all obstacles in order to move in the direction of his preferred "smart car selection".

If Yu Chengdong wants to stop building cars, even the biggest obstacle to the car red line set by Zhengfei for re-election will be crossed - there are currently only eight months until the decision to lift the ban, and the time is coming soon.

We don’t know what choices Huawei will make internally at that time, but what is certain is that with Wang Jun’s suspension, it is getting further and further away from its goal of becoming “Bosch in the era of smart cars.”