Yu Chengdong: Help everyone roll together
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Text | Reporter of “China Entrepreneur”Ren Yafei
Edit |Ma Jiying
Yu Chengdong, known as the “big mouth”, recently announced another blockbuster news – Huawei Auto BU will finally achieve profitability five years after its establishment.
“Over the past few years,Che BU lost 10 billion yuan every year, and later lost 8 billion yuanYuanlost 6 billion last yearYuanis expected to turn a profit this year.“On March 16, Yu Chengdong, Managing Director of Huawei, CEO of Consumer BG, and Chairman of Smart Car Solutions BU (referred to as Car BU), said at the China Electric Vehicle 100 Forum (2024).
Che BU is a smart car solutions division established by Huawei in 2019. In May 2021, Yu Chengdong was appointed as the CEO of Che BU, which consists of different business sectors such as smart driving, smart network connection, and smart cockpit. On September 21, 2021, Huawei Smart Car Solutions BU made personnel adjustments, and Yu Chengdong became chairman.
In terms of business models, Huawei Auto BU has three main models:The first is the standard parts model; the second is the HI model, and the partner is Changan Automobile’s Avita brand, but Yu Chengdong also revealed that Deep Blue Auto, Lantu and Mengshi will also adopt similar cooperation in the future; the third It is a smart car selection model, and its partners include Cyrus, Chery, BAIC, and JAC. Among them, the brands Wenjie and Zhijie created by Huawei and the former two companies respectively have models on the market. Yu Chengdong revealed that the price of the models cooperated with JAC will reach one million levels.
According to Yu Chengdong,In the first three months of this year, the smart car selection business turned a profit.However, Yu Chengdong also revealed that the smart car selection model will not have too many partners.“The main reason is that we don’t have the resources and can only build four model rooms.”.
The automotive business has become an important part of Huawei’s business, but Huawei’s automotive BU business has been in a state of loss. As early as the 2022 China Automobile Blue Book Forum, Yu Chengdong revealed,The car business is Huawei’s only loss-making and cash-burning business.Huawei invests more than one billion US dollars in research and development every year, and has as many as 10,000 direct and indirect R&D personnel, 70% of which are engaged in the development of intelligent assisted driving.
At Huawei’s internal meeting at the end of 2022, Huawei officially predicted that the profitability of the car BU will be 2025. If it achieves profitability this year, it means a full year ahead of schedule. As for the reason, Yu Chengdong said it was due to “the huge sales of high-end models.” Data shows that the Wenjie brand sold 94,380 vehicles last year, a year-on-year increase of more than 20%. Among them, the Wenjie M9 was launched at the end of December last year, with a total of about 60,000 units ordered. Wenjie’s new M7 has delivered more than 100,000 units in 170 days since its launch, “setting a new record for delivery speed in China’s luxury SUV market.”
In addition to business profitability issues, Yu Chengdong once again “waved the flag and shouted” for Huawei’s intelligent driving.
In his speech, he “ridiculed” He Xiaopeng, chairman and CEO of Xpeng Motors, who was also attending the meeting: “In the field of intelligent driving, Xpeng was the best in the domestic market in the past, but now that we are here, we will rewrite the industry. .”
Regarding Yu Chengdong’s public “ridicule”, He Xiaopeng did not respond at the scene. But on March 19, during the fourth quarter 2023 financial report conference call, when asked “Compared with Huawei, how can Xpeng Motors continue to maintain the lead in autonomous driving?” He Xiaopeng responded, “Yu Chengdong shared at the 100-person meeting At that time, I happened to be sitting underneath.We work together with Huawei on a track we believe in together.Huawei is a very outstanding technology company in China. We respect Huawei very much.In the field of autonomous driving, we each have our own strengths and weaknesses.“
He also talked about Xpeng Motors’ advantages in autonomous driving, saying that“More focused and more capable than Huawei”.
Source: China Electric Vehicles Committee of 100
The following is a compilation of Yu Chengdong’s speech at the China Electric Vehicles 100 People Forum (2024) (with deletions):
Help everyone to roll together
In the era of intelligence, automobiles have undergone tremendous changes. The technologies they require include chips, software, algorithms, AI, cloud, etc.This is why Huawei hopes to help industrial transformation, upgrading and development.
Huawei hopes to rely on more than 30 years of technology accumulated in the ICT field to help the automotive industry build independent and controllable core technologies that are rooted in the industry. Therefore, our goal is to rely on the Hongmeng operating system, from chips to overall solutions, to realize the operating system for human-vehicle interconnection and create a smart cockpit for the Hongmeng ecosystem.
In the field of intelligent driving, Xpeng was the best in the domestic market in the past, but now that we are here,We want to rewrite this industry. Our ADS high-end intelligent driving should be recognized as the best by everyone.This industry is very complicated, and the technology we provide helps everyone work together to provide consumers with a better experience. Healthy competition is good, as it promotes common development, progress and learning from each other.
In the field of intelligent driving, what is the difference that we bring to everyone?
Active safety. As cars move from passive safety to active safety, intelligent driving can not only greatly reduce driving fatigue, but also significantly reduce traffic accidents and improve driving safety, which is very important.
In the smart electric field, Huawei is also involved. In addition to the 600-kilowatt liquid-cooled supercharger, the 800-volt high-voltage silicon carbide electric drive system, and battery power management BMS, etc., can also better protect safety.The capabilities we have accumulated in BMS (battery management system) have enabled our partners’ cars to have zero spontaneous combustion so far.
Source: China Electric Vehicles Committee of 100
In the field of smart car lighting, the megapixel smart headlights used on the M9 are very popular among consumers.
In the field of car control, we took the lead in using Huawei’s new electrical architecture of software-defined cars through Zhijie S7 and Wenjie M9. From domain control to intelligent software definition, the car has achieved OTA upgrades, and development efficiency has been greatly improved. This digital platform can help the industry greatly improve production efficiency, while also quickly improving user experience.
There is another area, the Internet of Vehicles, which I won’t introduce in detail. We support the upgrading and development of China’s smart electric vehicle industry in five major areas.
Create four model rooms
Huawei Car BU has three cooperation modes.
One is the standard parts model, cooperating with many car companies.
A HI model, Huawei’s full-stack solution model. Currently, it is mainly cooperating with Changan Automobile’s Avita. Deep Blue will also use it in the future, including Dongfeng Motor’s Lantu and Mengshi, and it is possible to adopt similar cooperation methods.
The smart car selection model combines Huawei’s experience and capabilities accumulated in to C over the past decade, including product experience, product design, product definition, channel retail, marketing and quality management, with our complete set of management systems to help car The company builds good cars. Currently, there are four main cooperative car companies, namely Thalys, Chery, BAIC and JAC.
Our cooperation with Cyrus has achieved certain results. The Wenjie M7, priced at more than 300,000 yuan, received 60,000 orders in the first month after its launch. The Wenjie M9, priced at about 500,000 yuan, has been on the market so far. The cumulative orders are close to 60,000.
Products in cooperation with JAC will be launched next year and will be sold for up to 1 million yuan.
The Zhijie S7, which we cooperated with Chery, was delayed in launch and mass production due to chip supply shortage and factory relocation.But starting from April, it can return to normal conditions.
Many people ask, can you do more? Because manpower resources are very tight right now, we don’t have the resources to do much and can only build four model rooms. Huawei provides everyone with a reference by demonstrating its capabilities in the model room. I believe that we can successfully help the industry transform and upgrade through Huawei’s solutions and technologies.
Smart Car turns a profit, and Che BU is profitable this year
The cost of Huawei’s intelligent driving system is still a bit high.
Due to various reasons such as supply chain sanctions, it is still challenging for our solution to be used on cars with a price tag of less than 300,000 yuan.Only cars worth more than RMB 300,000 can be affordable and profitable.But above 300,000, it needs brand support to sell well and sell well.
Therefore, through the smart car selection model, we help car companies sell mid-to-high-end products well, so that Huawei’s car BU can achieve a closed business loop, have good revenue and profits, and turn losses into profits.
In the past few years, Huawei’s car BU has lost 10 billion yuan every year, and later lost 8 billion. Last year, it lost 6 billion. It is expected to turn losses into profits this year.This is due to the strong sales of high-end models we and our partners have built.In the first three months of this year, the smart car selection business has turned a loss into a profit, and the car BU is on the verge of turning a loss into a profit. It is expected to be able to turn a loss into a profit after April, forming a healthy and positive development.
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