How does Huawei stir up the automotive industry?

The trend towards new energy and intelligent connected vehicles is already here, and the entry of ICT companies such as Huawei is subverting the main architecture of automobiles and stirring up trouble.

After cooperating with BAIC to create the Alpha S Huawei HI version of the Arcfox and cooperating with Xiaokang to create the Seres Huawei Smart SF5, Huawei, which is determined not to build cars, has once again joined hands with car companies. On August 24, Huawei and Changan Automobile jointly launched their high-end car brand "Avita". Avita's first high-end smart electric mid-size SUV, the E11, was unveiled at the same time and will be equipped with Huawei HI's full-stack smart car solution; on August 26, the first model of Huawei's cooperation with Nezha Automobile, the Nezha S, will use Huawei's MDC smart driving computing platform and laser radar technology. How many cooperation models does Huawei currently have with car companies? How will the entry of Huawei and other ICT companies change the automotive industry?

Huawei's two models

When Karl Benz invented the world's first car, the internal combustion engine and its transmission system that emitted white smoke from time to time built a strict barrier. This barrier was once a high wall that was difficult for domestic car companies to overcome, but now, the trend of intelligence, electrification, and networking has broken the "no entry" pattern of the automotive industry.

"A car may eventually become an intelligent robot, and the first intelligent robot that accompanies you in your life may be a car," said Yang Xiaodong, general manager of SAIC Passenger Vehicle and chief co-creation partner of R Auto.

In the new track, cooperation with ICT companies such as Huawei is currently the best way for car companies to become industry "disruptors". Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers, said in an interview with a reporter from China Electronics News that cars are becoming robots and are increasingly integrated with AI. Traditional car companies need to cooperate with ICT companies such as Huawei to make up for their shortcomings in the field of AI.

In addition, traditional car companies will spend huge manpower and material resources to develop new technologies such as autonomous driving. In a rapidly changing era, they may miss the best development opportunities in the era of smart cars. "Developing a new system is a particularly long process, requiring a large team and R&D expenses. It is difficult for small and medium-sized enterprises to afford this." Xu Haidong believes that from the perspective of small and medium-sized car companies, cooperation with ICT companies such as Huawei is an opportunity to quickly enter the smart car track.

In order to gain a deeper understanding of the progress of Huawei's cooperation with traditional car companies, China Electronics News tried to contact Huawei, but Huawei said it would not comment on the matter for now. However, according to Huawei's public response on July 2, Huawei's cooperation with car companies mainly has two modes.

The first mode is the Huawei Inside mode, which means that Huawei and car companies jointly define and jointly develop smart cars, and "equal strength" is the main theme. At present, Huawei's cooperation with BAIC, Changan, GAC and Nezha adopts this mode. Huawei and BAIC jointly created the Alpha S Huawei HI version, which is equipped with hardware including 34 sensors, 3 96-line automotive-grade laser radars, 6 millimeter-wave radars, 13 cameras, and 12 ultrasonic radars; the E11 jointly released by Huawei and Changan will be equipped with Huawei HI full-stack smart car solutions; Huawei and GAC jointly developed the first medium and large-sized smart pure electric SUV model, and the AH8 series produced will have L4 autonomous driving functions; On August 25, Huawei and Nezha Automobile announced the cooperation to develop "Nezha S", and launched comprehensive cooperation in the fields of intelligent networking, vehicle computing, intelligent driving, digital energy and cloud services.

The second model is the cooperation model between Tier 1 and Tier 2, where Huawei provides parts and solutions to automakers. Currently, the cooperation involves power systems, and Huawei is more deeply involved in product research and development. At the Shanghai Auto Show in April this year, SERES brought an extended-range electric vehicle - "SERES Huawei Smart Selection SF5". This is an SUV that has been deeply cooperated with Huawei, and it is also the first appearance of Huawei's power system. The Camelback intelligent range-extending system equipped in SERES SF5 integrates the three-in-one power platform of Huawei DriveONE intelligent extended-range pure electric vehicles. The support of Huawei's electric drive has greatly improved the vehicle's endurance.

Huawei’s “non-cooperators”

Huawei will still face tough challenges in promoting its smart car solutions. "SAIC must take the soul into its own hands," said Chen Hong, chairman of SAIC Group, who once refused to cooperate with Huawei on autonomous driving.

After thinking about what the soul of a car brand is, Chen Hong's refusal is not unreasonable. At present, automotive software accounts for 10% of the value of large passenger cars, and is expected to grow at an annual rate of 11%. By 2030, automotive software will account for 30% of the content of the whole vehicle, and the overall market size will reach more than 400 billion US dollars. In the future, software and data will become the soul of smart cars. Whoever masters software and data will be able to stand at the top of the automotive industry chain. Xu Haidong told reporters that under this circumstance, if traditional car companies do not master the software in their own hands, they may become OEM factories. "The cooperation between car companies and ICT companies is the result of each taking what they need under the trend of the 'new four modernizations' of automobiles. Whether to cooperate depends on the comprehensive balance of the companies themselves." Xu Haidong said.

In addition to SAIC, which is "not cooperating for the time being", ICT companies such as Huawei face other challenges in entering the market, and the entry process is not smooth.

The high entry threshold, especially the control of auto parts, is the primary difficulty. Zou Guangcai, deputy general manager of the National New Energy Vehicle Technology Innovation Center, told the China Electronics News reporter that the strengths of ICT companies in the automotive industry lie in core software and hardware such as electronic control systems, but many traditional parts on the car are still rigid needs of the car and do not belong to the category of emerging fields. As an emerging force in the automotive industry, how to ensure the quality and safety of auto parts? This is what ICT companies need to consider.

TrendForce analyst Chen Hongyan further told reporters that it is not easy for ICT companies to meet automotive standards. In other words, if ICT companies want their products to be used in cars, they must meet automotive standards. Before selling their products to car manufacturers, they need to understand and comply with automotive regulations, which is a very costly and time-consuming process.

In the "journey" of ensuring driving safety, ICT companies are moving forward steadily. Chen Hongyan said that the current layout of ICT companies in the automotive industry is mainly related to the in-car infotainment system, specifically the supply of functions, modules and components of the in-car infotainment system, and the trend of automotive consumer electronics is obvious. However, it should be noted that although the infotainment function is not directly related to driving safety, it is necessary to always consider the driving situation. The new trend of combining the center console with the dashboard is also indirectly related to driving safety. In addition, since the new function involves networking, the attention to network information security risks is gradually heating up in the automotive industry.

This actually tests the "foundation" of ICT companies in the automotive industry, because it takes a long time to check and control reliability and safety.

The road to automotive intelligence is full of opportunities, but the fleeting "opportunities" are actually hidden in more intense market competition. At present, domestic emerging car manufacturers tend to choose Bosch for hardware, and traditional car companies such as SAIC, Great Wall, Geely, and BYD are all building their own intelligent network subsidiaries, trying to master core systems such as domain controllers, bottom-layer and middle-layer software. ICT companies such as Huawei are facing many strong competitors.

The restless world of automobiles

"The electric-first principle will completely change our vehicle architecture and product lineup." BMW Group Greater China President and CEO Jochen Goller once said. In this once-in-a-century era of change in the automotive industry, although the milestones in the middle are full of uncertainty, the final form of the intelligentization of the automotive industry has been determined. The networking of devices does not mean vehicle intelligence, but it is the beginning of intelligence; the real intelligence is that every car has the ability to perceive the environment, human-computer interaction and decision-making control. ICT companies such as Huawei have advantages in decision-making control and other aspects. What kind of changes will their joining bring to the automotive industry?

The shortening of product production cycles may be the first wave of changes in the automotive industry. "I just bought an iPhone 12, and the iPhone 13 is about to be released." Just as consumers are constantly chasing new mobile phones with more powerful functions, the replacement cycle of automotive products will be greatly shortened in the future. Due to changes in the definition of automobiles, traditional automotive power mechanical components have become peripherals that exist to execute instructions from central computing platforms and core control systems. "Once a car becomes an electronic product, its update cycle will be greatly shortened, and even a new generation of models will have to be replaced every two or three years. Software functions can also be updated through OTA at ordinary times." Zou Guangcai said that this is a positive change to some extent, because many new technologies and new functions will be "on the car" and applied faster.