A New Intelligent Electric SUV developed by GAC and Huawei

Recently, GAC (Guangzhou Automotive Group Co.) announced that the GAC Aion will join hands with Huawei’s AH8 car project, which has been approved by GAC’s board of directors. Both parties will jointly develop the first medium and large-sized intelligent pure electric SUV, which will be mass-produced by the end of 2023.

The most striking feature of this new car is that it will be based on GAC’s GEP3.0 chassis platform and Huawei’s CCA (computing and communication architecture) to create a new generation of intelligent car digital platform, and it will be equipped with Huawei’s full-stack intelligent car solution. After BAIC’s ARCFOX has already landed Huawei’s full-stack autonomous driving technology, GAC Aion is expected to be the second project to implement the Huawei Inside project.

Actually, the cooperation between GAC and Huawei is not surprising because the two companies had signed agreements in 2017 and 2019 respectively to deepen cooperation. The joint development of the Aion model is a natural move. However, due to the soul-stirring question raised by the former leader of SAIC Group, people have paid more attention to this cooperation between Huawei and GAC than before.

Compared to the first-generation new forces of automakers such as NIO, XPeng, Ideal, and WM, which have built their own factories, the combination of traditional automakers and high-tech companies has become a trend in the auto industry of late. Alibaba and SAIC, Baidu and Geely, and BYD and Didi have established joint ventures, while Huawei has partnered with BAIC, Cyberverse, and Changan, among others. Now, Huawei and GAC Aion have joined hands once again to jointly develop a medium and large-sized intelligent pure electric SUV, which undoubtedly makes Huawei score again in the domestic host factory landscape.

As a traditional host factory represented by the Aion, GAC has a relatively complete system capability in chassis construction, production manufacturing and supply chain. The GEP 2.0 pure electric exclusive platform that GAC Aion is using now is also one of the more competitive pure electric vehicle platforms in the industry. On the GEP 2.0 platform, GAC Aion has fully verified its own three-in-one motor, open line control platform, electric control steering, redundant braking-ESP, HEV+IBOOSTER, and other pure electric vehicle subsystems, which are more reliable in terms of safety and platform stability.

But it is not sufficient for automakers to go it alone if they want to achieve full-scale autonomous driving.To truly implement high-level autonomous driving technology, the investment threshold is not low.

For traditional automakers, especially most domestic independent brands, the number of companies with the capability to invest in this technology and fund it is limited. The establishment of software engineering capabilities is a process that requires a long period of accumulation. Even in the US, the autonomous driving departments of traditional automakers such as General Motors’ Cruise and Ford’s Argo AI were initially built based on the acquisition of autonomous driving start-ups at a high premium.

Therefore, cooperating with high-tech companies is a shortcut for many automakers to quickly catch up with current technological developments. The core question for SAIC Motors is whether traditional automakers should introduce a full-stack autonomous driving system from Huawei or other high-tech companies.

From the perspective of traditional automakers, introducing external vendor systems does represent a departure from a company’s own soul, but at the same time, automakers need to examine whether their own autonomous driving systems are advanced enough. If they know they are not strong enough, clinging to the old and not learning new tricks will undoubtedly make them gradually lose the advantages established by their vehicle platform and related integration capabilities. As long as GAC Aion continues to invest in Huawei’s full-stack autonomous driving technology and does not give up independent research and development of its own autonomous driving system, it can provide a continuous supply of blood support to other projects to some extent through better expected sales of the AH8 model, which is a win-win situation.

In addition to Huawei, GAC Aion is also cooperating with Didi Chuxing’s autonomous driving company to define and develop a scalable application for a new energy autonomous driving vehicle model and will strive to promote the mass production of this model. For GAC Aion, even if its autonomous driving technology is not in its own hands, it can ensure that no component company can blackmail it through deep binding and comparative analysis. As long as GAC Aion ensures its leading position in pure electric vehicle platforms in the future, it can still leverage its position as a traditional automaker to cooperate with high-tech giants with more advanced technology.

GAC Aion’s IPO is on the horizon

Since achieving brand independence at the Guangzhou Auto Show in 2020, GAC Aion’s IPO has been the focus of attention from all sides. Since brand independence, Aion’s series of actions have worked well to build momentum for the upcoming IPO.## Growth of Chinese EV Maker GAC Aion

In 2020, Tesla became the world’smost valuable automaker. Chinese electric vehicle (EV) makers NIO, XPeng, and Li Auto also made significant progress in North American stock markets with rapidly growing market caps. Particularly, XPeng has also made its debut in Hong Kong Stock Exchange, becoming the first dual listing in the US and Hong Kong markets and raising considerable funds for business expansion and new technology development. Therefore, from the perspective of future development of GAC Aion, an IPO at the right time can also bring new opportunities for the company’s development.

From the sales data, GAC Aion sold a total of 8,639 vehicles in June, with a total sales volume of 43,013 vehicles in the first half of the year, up 112.03% YoY, achieving 43% of the annual sales target of 100,000 vehicles.

From the perspective of car models, the AION product lineup of GAC Aion is becoming more solid. AION Y with a price range of RMB 104,600-148,600 and AION S Plus with a price range of RMB 139,600-172,600, which were launched during the Shanghai Auto Show this year and in June respectively.

In addition, GAC Aion has continuously made breakthroughs in core technology, such as graphene batteries, magazine batteries, super fast-charging battery technology, and sponge silicon negative electrode battery technology, which have constantly refreshed new heights in the industry in terms of electric vehicle mileage and battery safety. According to relevant information, the AION LX, a pure electric vehicle equipped with sponge silicon negative electrode batteries, has completed high-temperature road tests with a NEDC range of up to 1000 km and is about to enter the mass production stage. This vehicle model with a NEDC range of up to 1000 km will completely solve the consumer concerns about electric vehicle mileage anxiety.

For traditional automakers, they value being the dominant force in the industry chain. However, the gap in software engineering is an undeniable fact. Introducing Huawei’s full-stack system does not mean giving up the development of their own autonomous driving systems. How to handle the relationship between self-development and introduction is also a test for traditional automakers.

Moreover, the system-based technical ability built by traditional automakers integrating the whole vehicle is also not something high-tech giants can catch up in a short time. How to form a complementary advantage and maximize the synergistic effect is the biggest challenge for both management teams.

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.