Zheshang Securities-In-depth series research on Huawei’s industrial chain: Huawei’s three roads to car manufacturing (with report)

Summary

1. How does Huawei build cars? ——Three roads, gradually deepening participation

1) Parts supply mode – Tier 1. Huawei provides manufacturers with standardized components, such as motors, modules, and lidar, with a low degree of participation.

2) Solution integration HI mode – Tier 0.5. Focus on helping car companies build good cars, and cooperate to provide Huawei with HI smart car full-stack solutions (SoC+OS), including computing and communication architecture. Under this mode, Huawei and car companies jointly develop, and the cooperative relationship is greatly deepened. Huawei’s deep participation is required from research and development to software and hardware on the car.

3) Smart car mode – Tier 0. Huawei not only participates in product modeling design, interior design, and provides intelligent solutions, but also is responsible for model marketing and terminal sales. Under this model, Huawei has deeply supported channels and brands, and has the deepest participation, starting to occupy a dominant position.

2. Cooperation status of Huawei HI and smart car models and landing models

HI mode: 1) The new HI version of Beiqi Jihu Alpha S is the world’s first mass-produced car equipped with Huawei’s HI full-stack smart car solution. 2) Avita 11 jointly built with Changan Automobile and Ningde Times, Huawei provides the DriveONE electric drive system and a complete set of smart car solutions.

Smart car model: Cooperate with Sailisi (formerly Xiaokang Co., Ltd.) to create a high-end smart car brand AITO. Thanks to Huawei’s brand power and sales channel advantages, the sales of Wenjie M5 and M7 performed well after their launch, exceeding market expectations.

3. Huawei’s final outlook

Forecasting the automobile business from the mobile phone business, it will form a low-end, mid-end (AITO Wenjie), and high-end three-tier product layout.

The smart tram will take over the smartphone business and become an important starting point for Huawei to choose its strategic direction and break the situation. The final goal is to be the leader in the era of smart tram driverless.

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