Toyota and Huawei are getting closer on the road of intelligent driving

△It is reported that Toyota may cooperate with Huawei on intelligent driving

Toyota and Huawei's cooperation achieves multiple goals

Japanese brands are currently in a difficult period in China. Last year, the domestic market share of Japanese brands fell for three consecutive years to a historical low of 17%. Under such circumstances, in addition to continuing to launch new models in the domestic market, Toyota has to supplement intelligent driving functions such as NOA navigation.

△More and more models are equipped with NOA navigation assistance system

At present, the new models launched by a number of new forces in China have become standard features of NOA pilot functions similar to L3. Although there is still a long way to go before L4-level high-level autonomous driving, the driving convenience brought by NOA and automatic parking functions is still very attractive to consumers. Not to mention, the NOA function can still be charged. For car companies, when the user base is large enough, the income from NOA subscriptions can also bring them a considerable income.

Purchasing Huawei's smart hardware will allow Toyota to achieve multiple goals at once:

1. Huawei's products have been successfully applied in many cases in China, and the technology is relatively mature and reliable. The combination of Huawei's Hongmeng smart cockpit and ADS 2.0 intelligent driving system is very competitive in the domestic and even global markets. Through cooperation with Huawei, Toyota can also gain more attention and trust from domestic consumers in the later product promotion process, at least in domestic vehicle sales activities.

△Huawei's Hongmeng smart cockpit and ADS 2.0 intelligent driving system combination is competitive

2. From the perspective of cost, Huawei chips still have certain advantages over Nvidia chips. With Toyota's current annual production volume of more than 10 million vehicles, if all of them are deployed with Orin chips, the cost of the models will undoubtedly increase significantly, which may be a cost increase that many mid- and low-end models cannot afford. However, the partial use of Huawei chips will help reduce costs.

△Huawei chips have certain advantages over Nvidia chips in terms of cost

3. Toyota will most likely have to consider Nvidia's Orin chip as a backup plan if it chooses Huawei's intelligent driving chip. From the perspective of supply chain security, having two or three chip suppliers is essential for a company like Toyota. Even if Nvidia's chips have production capacity or quality problems, Toyota will not face difficulties.

Judging from Toyota's smart driving project this time, it still hopes to keep the project's leadership firmly in its own hands. In terms of smart driving software, Toyota uses the solution of Momenta, in which it has invested and held a stake. In the C round of financing with a total amount of US$500 million in March 2021, Toyota was the lead investor, which shows that its relationship with Momenta is extraordinary.

△Toyota still hopes to keep the project's leadership firmly in its own hands

For Toyota, introducing Huawei's Hongmeng Intelligent Driving Model (the previous Smart Car Selection Model) is not a suitable choice in the short term. Toyota has a nationwide sales network, and the system capabilities of Toyota North and South are by no means comparable to weak independent brands such as SERES, JAC, and BAIC. Moreover, Huawei charges a lot for the Smart Car Selection Model. More importantly, Toyota certainly does not want to become Huawei's OEM. However, if it follows Changan Automobile's practice in the future and introduces Huawei's intelligent driving solution through the Huawei HI model, it is still worth looking forward to. Under this model, Huawei is at best a relatively important parts company, and the progress of the entire project is still in the hands of the vehicle company itself.

△Toyota may consider introducing Huawei's intelligent driving solution through Huawei HI mode

However, it is worth noting that Huawei's car BU has been split out by Huawei to become an independent company. And this company is seeking car companies to invest. In the future, it is not ruled out that Toyota or Volkswagen will invest in Huawei's car BU. After all, Audi is also rumored to use Huawei's intelligent driving solution. In addition to participating in Momenta's financing, Toyota also participated in the financing of another Chinese autonomous driving company, Pony.ai, in 2020. In the total financing of US$462 million, Toyota, as a strategic investor, invested up to US$400 million. Both Momenta and Pony.ai are relatively leading autonomous driving technology companies in China. Toyota's large investment not only values ​​the huge effects that these companies will bring to itself once they go public in the future, but also hopes to seek in-depth cooperation with these companies to make up for its shortcomings in the field of intelligent driving. Therefore, investing in Huawei's car BU in the future may be an option worth considering.

△Toyota has invested in the autonomous driving company Pony.ai

Toyota's multi-pronged approach in the country

For Toyota, gaining a corresponding market share in the Chinese auto market, the world's largest auto market, is a must. At present, if foreign auto giants want to gain a foothold in the domestic auto market, they must continue to increase their investment, build stronger local system capabilities, and cooperate with China's smart electric vehicle industry chain. In fact, before the smart driving order, Toyota had already started cooperation with Huawei. Huawei's car system has already shined on the new ninth-generation Camry that has just been launched. The integration of Qualcomm 8155 chip, Toyota's own app store and Huawei's car system has become one of the highlights of the new Camry.

△ In the new ninth-generation Camry, Huawei's car system has already shined

Before cooperating with Huawei, Toyota had actually established a joint venture with BYD, and models with Toyota logos using BYD's three-electric system have been launched in the domestic market. Although the sales of related models in China have not met the initial expectations, Toyota's attitude of hoping to occupy a larger share of the Chinese new energy vehicle market through a more in-depth localization strategy has been very obvious. Even though Akio Toyoda is full of concerns about electric vehicles, Toyota is still very honest in execution.

△Toyota has established a joint venture with BYD

The biggest highlight of Huawei's project is that it has won Toyota's global intelligent driving project. This means that Toyota's future models equipped with Huawei chips will not only be sold in the Chinese market, but will also be launched in overseas markets. Once this road is finally feasible, it is likely to attract other global vehicle companies to follow suit and purchase Huawei's intelligent driving chips. If the performance of Huawei's intelligent driving chips is stable, it will not only be a big boost for Huawei, but also for local intelligent driving chip companies such as Horizon Robotics and Black Sesame Intelligence to expand their business globally.