Written | Produced by Yang Guang | Automobile Industry Economics
It may only be a matter of time before Volkswagen, one of the world's largest automakers, and Huawei, the world's leading ICT company, come together. .
Especially when the two parties unanimously chose not to comment on the rumors, the public had more reason to believe that there could be nothing between the two.
The story of Volkswagen and Huawei can actually start from 2015.
At CES Asia that year, the two parties announced a global cooperation in the field of Internet of Vehicles.
One wants to be localized and the other wants to be globalized. The instant hit-off between Volkswagen and Huawei is in line with the most basic characteristics of love at first sight.
At that time, Yu Chengdong, who was in charge of negotiations, was still a cautious and non-arrogant person. At that time, Volkswagen was still a traditional company that sold fuel vehicles very successfully.
Yu Chengdong said that cars are becoming the largest mobile intelligent terminals, and Huawei hopes to use its rich communication experience and accumulation in the field of smartphones to provide better in-vehicle intelligent devices and interactive experiences.
However, in the next seven years, except for Huawei and Audi, which signed a memorandum of cooperation on intelligent connected cars, no one went further.
Until the second half of last year, a number of blockbuster news came to light, which gave the two new stories and room for imagination. NO.1[Reversal]
This is an inconspicuous message.
On July 7, 2021, Huawei announced that it had signed a patent licensing agreement with a Volkswagen parts supplier. This agreement involves in-car 4G interconnection equipment and is expected to cover 30 million Volkswagen brand cars.
It is worth mentioning that Huawei said this is the largest order it has signed in the automotive industry.
It was also this month that Su Qing, the director of the Intelligent Driving Product Department of Huawei Smart Car Solutions BU, caused huge controversy after making remarks about "Tesla kills people" at an event. He was relieved of his original position and transferred to the reserve team for training and assignment.
At the end of October 2021, the "love affair" between Huawei and Volkswagen was exposed for the first time. It was reported that the two parties planned to form a joint venture to jointly develop autonomous driving technology.
According to what was said at the time, the new company aimed to provide relevant technical solutions to the Volkswagen Group as a supplier. One of the ways of cooperation was that Volkswagen would pay to become the controlling party, while Huawei would mainly provide technical IP (intellectual property rights). .
However, Huawei immediately refuted the rumor as "untrue", while Volkswagen chose to remain silent.
In January 2022, Volkswagen China CEO Feng Sihan responded directly to the rumors at the end of last year for the first time. He said, "Huawei is a very powerful Chinese technology company. We maintain communication with Huawei, but at this stage There is no confirmed information.”
That month, Huawei confirmed that Su Qing had resigned from the company. There were rumors that he would lead the team to join Volkswagen’s autonomous driving company in China and serve as CTO. However, this The news was not followed up.
Only one month later, foreign media once again broke the news, saying that Volkswagen plans to acquire Huawei’s autonomous driving department. However, after recalibration by domestic media, Volkswagen’s real goal may be just a 700-person company specializing in Autonomous driving business unit. (*At that time, the entire Huawei autonomous driving team had more than 2,000 people)
According to foreign media, the two parties had been negotiating on the project for several months, but Huawei’s psychological expectations in terms of price were Of the 5 billion euros, Volkswagen is only willing to give 3 billion, and the two parties may reach a deadlock as a result. NO.2[Variable]
The two sides, which have yet to make any new progress, have also felt the invisible power from the political level in recent times.
First of all, Merkel ended her 16-year term. The former German Chancellor visited China 12 times during his tenure and facilitated many major joint ventures and cooperation projects between the two countries in the automotive field, especially Volkswagen has also benefited a lot from this.
Secondly, the reorganization of the new German cabinet has been completed (for the first time, the three parties have been co-governing). Among them, the Green Party’s tough attitude towards China, in the eyes of foreign media, may affect the previous results of the two countries. good economic and trade cooperation relations.
However, as Germany's largest trading partner for five consecutive years, this year also coincides with the 50th anniversary of the establishment of diplomatic relations between China and Germany. In such a landmark year, the cooperation between Huawei and Volkswagen has become subtle.
Of course, variables are not limited to potential political risks. For Huawei, the most direct impact after encountering US sanctions many times in the past two years is the sharp decline in operating income data.
Huawei will achieve revenue of 634 billion yuan in 2021, a year-on-year decline of 29%. In 2020, it still has a consumer business accounting for 54% of revenue. This number has fallen in the first half of last year. to 42%.
From another perspective, Huawei needs cash flow more than ever at this time, which also makes the sale of its autonomous driving unit feasible in principle.
Because according to Yu Chengdong, Huawei Automobile BU*** currently has more than 5,000 employees and spends nearly 1 billion U.S. dollars a year. Correspondingly, it has invested heavily in building high-end The implementation of autonomous driving systems in end markets is difficult.
As the world’s first mass-produced model equipped with Huawei’s ADS intelligent driving system, the Huawei Alpha S Huawei HI version has experienced delays in delivery many times.
Although the Cyrus SF5 and Wenjie M5 currently on sale are equipped with many advanced configurations such as Huawei’s smart cockpit, they do not yet have any technical support from Huawei’s autonomous driving department.
In addition to Jihu, which is accelerating mass production and delivery, including Avita, which is still on the road, and GAC’s new model, which is still being planned, it is obvious that none of the above three will be able to afford it in the short term. Quick tasks.
On the one hand, there are high capital expenditures and labor costs, and on the other hand, there is a lack of terminal scale effect. When autonomous driving technology is still unable to achieve profitability in the current business scenario, Huawei’s attitude has also begun to change. Be subtle. NO.3 [Pros and Cons]
As urgent as Volkswagen is to improve its intelligence, it is also very enthusiastic about acquiring Huawei's autonomous driving segment.
As the traditional car manufacturer with the most radical transformation but the heaviest burden, Volkswagen announced that it will invest up to 89 billion euros in electric vehicles and digitalization in the next five years, and also spent 7 billion euros to establish a software company. Department "Car.Software" and stated that the department will expand to 5,000 people within 2025.
Although Volkswagen has worked very hard, it is limited by the huge organizational structure and lengthy decision-making mechanisms of these traditional giants. When it conducts full-stack self-research in some new technology areas that require rapid iteration, then The feeling of powerlessness will be very obvious.
For this reason, in the eyes of many professionals, traditional car companies that want to do a good job in autonomous driving must either choose to make it independent and give it a higher degree of market freedom, or directly acquire a mature team.
So once Volkswagen can take over the rumored Huawei autonomous driving department, even a small part of it, it can get twice the result with half the effort, and the blessing of a Chinese supplier can also help Volkswagen cope with it. The Chinese government’s strict regulation of autonomous driving data.
For Huawei, Volkswagen’s nearly dominant market position in China, its huge market share, and its radical smart electric vehicle strategy can all bring Huawei a higher level of exposure. and loading capacity, which is precisely what neither Jihu nor Avita can realize immediately at this stage.
Another benefit of joining hands with Volkswagen is that this deal is expected to open the door to the international market that Huawei has always been eager to open. From this perspective, the price difference of 2 billion euros between the two seems to be unreasonable. So important.
However, from the perspective of the industry, once there is a problem with Huawei's autonomous driving technology, the negative effects will be exposure of the same magnitude. And if Volkswagen really acquires Huawei completely In the autonomous driving sector, whether it is BAIC, Changan or GAC, the implementation of key technologies may also face more complex situations in the future.
To sum up, these issues need to be comprehensively weighed by Huawei. Of course, with Ren Zhengfei’s reputation and personality, it is obvious that he will not fail to consider the feelings of existing partners. NO.4 [Gain and Loss]
In 2015, Yu Chengdong, who was the CEO of Huawei Consumer BG, brought Huawei into business relationships with global car companies for the first time. However, it was the same him 7 years later, and he almost failed because of a period of time. The improvisation made Huawei offend most of the automotive industry.
If the news of Volkswagen’s acquisition of Huawei’s autonomous driving unit had not emerged “timely”, a public relations crisis might have been inevitable.
So before there is any real progress, both Huawei and Volkswagen chose not to comment this time.
Through cooperation with major car companies in recent years, Huawei may have a deeper understanding that autonomous driving is a long-term and high-investment industry. If scale effects cannot be achieved, iteration is empty talk. , which is undoubtedly fatal to the field of autonomous driving that requires a large number of data sources.
So when the closed loop of "R&D-mass production-on-road-feedback-iteration" cannot be opened, then the money burning in the field of autonomous driving will become a bottomless pit.
In the eyes of the industry, completely abandoning the autonomous driving department can obtain more cash flow for Huawei, which has seen a sharp decline in revenue, while partial abandonment is at least a positive test signal, no matter which method is ultimately adopted. This model is believed to be the optimal solution made by all parties based on maximizing their own interests.
At the same time, we should also see that considerations and wishes from the national level may play a more critical role in the cooperation between the two parties.