Avita Launches its New Generation of Intelligent Electric Vehicle Technology Platform at the Chongqing International Auto Show
Authored by: Zhou Mianwu
Edited by: Leng Zelin
On June 25, 2022, Avita unveiled its new generation of intelligent electric vehicle technology platform at the Chongqing International Auto Show.
Behind Avita are Chang’an, Huawei, and CATL. This platform release has attracted the attention of Chang’an’s chairman Zhu Huarong, Huawei’s rotating chairman Xu Zhijun and CATL’s chairman Zeng Yuqun, which is a favorable proof that the three parties attach great importance to it.
Zhu Huarong said, “Chang’an will empower Avita with the latest scientific research achievements without reservation.” Meanwhile, CATL equipped Avita 11 with leading electric vehicle technologies such as super-fast charging, CTP high-efficiency grouping, and NP self-isolation. Huawei, based on its leading full-stack intelligent vehicle solution, works with the Avita team to create the Avita 11.
For the three companies, this combination undoubtedly has a win-win foundation, and behind the win-win is the art of balancing interests.
Chang’an
The big trend of new energy is clear: electrification first, then intelligence on top of that.
For Chang’an, it needs to figure out what ecological position it occupies under the wave of new energy. Chang’an has the qualifications, experience, and channels to make a car in the oil vehicle space, but what kind of car should it make?
Currently, Chang’an is taking two paths in the new energy field. One is its independent brand, Deep Blue, where Chang’an is the leader on this car, and the others are just pure suppliers. This path can be successful, and Chang’an can eat more meat. However, the disadvantage is that the competition is fierce, and success is not guaranteed.
Therefore, Chang’an is also seeking a backup, which is Avita. With CATL’s batteries and Huawei’s intelligent solutions, Avita will obtain some control that Deep Blue will relinquish. In exchange, Avita will become a top-tier player in certain segments of the industry. Creating high-end brands is a logical next step and will not conflict with Deep Blue, Chang’an’s independent brand.
The best situation for Chang’an is that Avita can lead primarily through its work with CATL and Huawei sustainably, while Deep Blue strikes the midrange market segment. This way, Chang’an can find its position in the new energy vehicle industry.
The interests that Chang’an needs to balance mainly lie in trying to minimize the loss of its leading position while hoping that CATL and Huawei will prioritize providing the best quality products to Avita.
CATL
For CATL, as long as it maintains its leading industry scale, supply, and technology of its batteries, life should be good.
But the various car companies do not want CATL to become the only game in town for such critically important parts. Avoiding excessive dependency on a single supplier is wise for each car company.To this end, CATL has to leave some room for itself, so as to occupy more market share. Building charging stations is one way to achieve this goal, but directly investing in car manufacturers is also a strategy. If CATL invests in car manufacturers, it will not be overly dependent on a single supplier.
For CATL, supplying batteries to other car manufacturers means making money from the carmakers’ purchases. However, supplying batteries to EV startup Arcfox means earning a share of the automaker’s profits.
CATL can provide robust support to Arcfox in three aspects:
- The latest products
- Stable supply
- Lower prices
CATL’s ultimate support for Arcfox is providing access to all the latest and best products at a lower price than its competitors, ensuring that Arcfox never has to worry about battery shortages.
While Arcfox’s ability to succeed is of great benefit to CATL, the market share of Arcfox is unlikely to exceed 20%. For CATL, a battery manufacturer with a market share of 40-50%, supplying batteries to other car manufacturers is still essential.
For CATL, its main business is obviously researching and developing better batteries. After developing new and improved batteries, how should resources be allocated? Should Arcfox be given priority or should a portion be reserved for other cooperated manufacturers? Is CATL earning battery money or profit-sharing from car sales? These are all interests that CATL needs to balance from its own perspective.
Huawei
For Huawei’s HI (Huawei Inside) division, the priority is to provide smart solutions rather than car manufacturing, especially in the areas of intelligent driving and the smart cabin.
The challenge for Huawei is that automobile manufacturers with strong capabilities recognize Huawei’s technical ability but also want to lead their own smart solutions. After all, the market for intelligent solutions is huge and automakers would rather develop their own rather than outsource to a service provider like Huawei. Therefore, it is difficult for Huawei to find a powerful carmaker willing to cooperate.
The Arcfox model is one of the best options for Huawei. Therefore, Huawei is willing to leverage its expertise to support Arcfox.
The core issue is whether Huawei will manufacture its own cars. Huawei’s official stance is that it will not manufacture cars, but insiders have reported that there are factions within the company that support such a move.
For Huawei, the key is to strike a balance between its interests. Will Huawei be able to make its own electric cars or will it continue providing smart solutions to manufacturers? If Huawei does start producing its own electric cars, will it continue sharing its latest technologies with Arcfox?
ConclusionFor Changan, CATL, and Huawei, Avitas is of great significance at this stage, and all three parties attach great importance to it. Even though Avitas has not yet gained any market share, all three parties have interests and are willing to provide their best resources to Avitas. However, as the business of the three companies continues to develop, new interests will inevitably arise.
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.