*Author: Michelin
What impressed you most at today’s Shanghai Auto Show?
For most people, it must be the “Tesla incident”. Just when Tesla suddenly stole the limelight from the 90% of car companies that had prepared carefully for the auto show, there was an unknown brand that held a press conference outside the exhibition hall and gained everyone’s attention. That was Siles.
The Car Launch Event in a Mobile Phone Store
On Nanjing East Road in the afternoon of April 20th, a store attracted a crowd of onlookers with two parked cars, “Is Huawei selling cars?” “Are they going to hold a press conference?”
Yes, Huawei is selling cars, and they are holding a press conference here.
However, this is not a mobile phone launch event. What is happening inside the Huawei global flagship store is the launch of the new car from Siles. This is the first time we have seen a new car debuted in a “mobile store”, and it was announced on-site that Siles Huawei Select SF5 officially settled in the Huawei flagship store and will be sold through Huawei’s retail channel network.
Huawei, which does not make cars, has become a supplier of cars and a retailer of cars.
Bringing Car Sales to Mobile Phone Sales Networks
In our impression, selling cars is a job for 4S stores. Even if new car-making forces have already sold cars in shopping malls, Huawei, as a partner, still manages to surprise everyone by selling phones in their own flagship stores. When Xiaomi announced that they would be making cars, many speculated: would Xiaomi sell cars in its own experience stores in the future? Now, Huawei has taken the lead and realized everyone’s guess.
Behind all of this, what we see is Huawei’s layout in the automotive and intelligent IoT fields.
Since intelligence has gradually turned cars into electronic products and they are jokingly referred to as “phones on four wheels,” and vehicle networking has made cars connect with mobile phones and homes, becoming an important part of AIoT. Why can’t they really be sold as an electronic product in the same store as phones and computers?
Moreover, compared to car sales networks such as 4S stores, direct sales stores, and auto malls, cell phone sales networks are even more dense. Whether traditional automakers following the 4S store route or new players in electric vehicles following the direct sales store route, they are restrained by cost and have relatively few storefronts. Even Mercedes-Benz and BMW, which occupy top market share in China, have only five to six hundred sales outlets nationwide for each brand while Huawei has nearly 60,000 retail spaces, including 12 flagship stores and over 5,000 experience stores.
As Huawei’s Executive Director and CEO of Consumer Business, Richard Yu, said:
“In selling cars through mobile phone stores, we are creating a precedent for both the consumer electronics and auto industries. In the future, Huawei can not only provide leading ICT intelligent automotive solutions to help automakers produce better vehicles, but also use the high-end brand operation, marketing experience, and sales network we have accumulated in the consumer electronics industry to help automakers sell better cars.”
The trend favors pure electric vehicles, so why choose plug-in hybrids?
If the current new energy market is divided into factions, pure electric vehicles dominate, and plug-in hybrids are seen as a “stop-gap measure.” However, the Ideal ONE, which ranks highest among new automakers, is a plug-in hybrid according to the 2020 new energy vehicle sales rankings.
Ultimately, consumers make choices based on their wallets, and factors such as range and charging convenience still determine whether they are willing to buy a new energy vehicle.
So, why choose a plug-in hybrid? Because it eliminates range anxiety and energy replenishment anxiety.
The Syrinx in this case carries a “camel-back” electric drive range-extender system, and the Huawei DriveONE is a three-in-one electric drive system that follows an “electricity combining electricity, and no electricity combining fuel” electric drive range-extender model.
The plug-in hybrid drive system consists of two parts. One part is the same as a pure electric vehicle, where the power battery supplies power to the electric motor that drives the vehicle movement.The other part is the range extender composed of the engine and the generator. Here, the engine is not directly used to drive the wheels, but to supply power to the battery pack, which is then transmitted to the motor to drive the wheels. The engine and the generator function like a “gasoline power bank” to increase the range of the battery, hence it is called the “range extender.”
In this hybrid mode, the vehicle can run purely on electricity, with a range of 180km that satisfies the daily commuting needs. When long-distance travel is needed, and there is not enough time or charging stations available, gasoline can also be added. By using the range extender, it can run in range extension mode for 1000 kilometers with a fuel consumption of 6.3L / 100km.
For Huawei, which has a nationwide retail network, range-extending vehicles that can refuel and recharge in many cities where charging facilities are not yet complete are more suitable than pure electric vehicles.
The New Collaboration Mode, Why Seres?
In the era of smart cars, we almost see news of tech companies partnering with car manufacturers every once in a while. It seems to have become a common practice for emerging tech companies to team up with car manufacturers that have established market presence. Therefore, the debut of Seres Huawei IDEAL SF5 made us wonder: why Seres?
Seres is a Chinese enterprise that was derived from SF MOTORS in Silicon Valley. It was once neighbors with Tesla and is backed by its parent company, Sokon Group. Although it is not well-known, it is one of the brands that first mastered the core technologies of three-electric and range extending. It has more than 1000 related patents in hand. As long as it takes the range-extending route, Seres is definitely a suitable partner.
Apart from the critical point of range-extending technology, new players in the field of electric vehicles cannot avoid a matter- the production capacity crisis. When choosing a partner, Huawei had to take into account this problem that once troubled Tesla and brought NIO to the brink of collapse.
As a company that obtained the qualification for new energy vehicle production from the Chinese government in the first batch in 2017, Seres-Jonway has two Jiang intelligent factories built based on the industrial 4.0 standard, with over a thousand intelligent robots and fully automated production processes.
The advantage of Seres production capacity, mature mass production ability, and supply chain integration capability is precisely what Huawei, a newcomer in the automotive field, needs, while the lack of intelligence and digital capabilities of Seres is exactly Huawei’s strength.Therefore, the HAWEI Smart Selection SF5 is equipped with Huawei’s intelligent devices – the HUAWEI HiCar solution and HUAWEI Sound smart speaker. It replicates the rich software functionality and ecosystem on the phone to the car system. As long as the Huawei phone is matched with the car system, the content on the phone can be seamlessly switched to the central control screen every time you enter the car. The navigation route searched on the phone before getting on the car can be directly projected onto the central control screen or even the dashboard. When you open the music player in the car, it will play the songs you previously listened to on the phone directly.
Huawei’s cooperation with Seres allows us to see a new model of cooperation in which suppliers participate deeply in defining products, developing software and hardware, controlling quality standards, and even sales processes.
Many people have commented on Huawei’s high-profile moves in the automotive industry compared to traditional suppliers’ low-key approach. However, compared with the “regulations” of new car “futures” releases, Seres Huawei SF5 was released in April and put into production in May. It deserves a “pragmatic” evaluation.
In conclusion, Huawei’s entry into the automotive industry not only shows us a new model of cooperation between car companies, but also indicates that the attributes of automobiles are slowly changing. Traditionally, in the automotive industry, hardware is the main part, and any software is only to serve “driving”, so car companies that control the whole car occupy the dominant position in the automotive industry chain. When digitization and intelligence empower automobiles, cars gradually become more diversified, and the internal system and software become increasingly important. The whole car gradually becomes more like a “host” of software and systems. Therefore, Huawei, as an incremental supplier, has a completely different and deeply involved approach from traditional suppliers. Rather than saying that the rules have been broken, it is better to say that it is following the trend.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.