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Introduction: "China's smart cars should not learn from Tesla, but more importantly, build an ecosystem."

(Text/Pan Yuchen, Editor/Gao Xin) “The Wenjie brand has now been sold to Seres at a very low price. National regulations require that the brand owner and the manufacturer must be one, and the brand must be owned by the manufacturer.”

On July 15, Yu Chengdong, Huawei's executive director, chairman of the Terminal BG, and chairman of the Intelligent Automotive Solutions BU, responded for the first time in the "Wenjie" live broadcast room to the reasons why Huawei transferred trademarks such as "Wenjie".

"We have invested a lot in Wenjie in the past. This brand is worth at least 10 billion yuan." Yu Chengdong said that what was transferred was not only "Wenjie", but also the English name AITO: "It is very difficult to register a four-letter brand starting with AI globally. This is a very good name. Our team spent a lot of money to get this brand." He said reluctantly.

Yu Chengdong responded to the reason for transferring the "Wenjie" trademark in the live broadcast and Huixing Live Room

On July 2, Seres Automobile, a partner of Wenjie, announced that it plans to acquire 919 registered or pending text and graphic trademarks of the Wenjie series held by Huawei and its affiliates, as well as 44 related design patents, for a total of 2.5 billion yuan. The transaction price is scheduled to be paid before December 30, 2024, which has attracted widespread attention in the industry.

According to Zhongjing Minxin’s evaluation of the above target assets, the market value of the target assets exceeds 10.2 billion yuan, which is four times the acquisition price of SERES.

Seres spent 2.5 billion yuan to acquire the trademark and appearance patent of Wenjie

Although the trademark ownership has been transferred, both Huawei and SERES have expressed that they will deepen their cooperative relationship, and Huawei will continue to support SERES in building and selling a good brand.

It is worth mentioning that this is not the first time Huawei has transferred its automobile trademarks. In May and June of this year, Huawei transferred the relevant trademarks of "Xiangjie" and "Zhijie" to its partner automakers, BAIC and Chery. So far, Huawei no longer owns the trademarks of complete vehicle brands.

Huawei once again gives the answer to whether to build cars or not

"Huawei has made it clearer that it will not build cars." During the 2024 World Artificial Intelligence Conference, Zhu Xichan, professor, doctoral supervisor, and director of the Institute of Automotive Safety Technology at Tongji University's School of Automotive Engineering, explained to Observer.com the intention of Huawei's trademark transfer.

But Zhu Xican also believes that no matter how Huawei explains its relationship with car companies, in the eyes of consumers, they are still "Huawei cars" - in terms of responsibility for automobile quality and safety, Huawei, as a supplier, shares the same fate with the OEMs.

He also stressed that Huawei is not an irresponsible company and there is no responsibility that Huawei cannot shoulder.

At present, Huawei's cooperation with automobile manufacturers mainly adopts three modes: the first is traditional parts suppliers similar to Bosch, which mainly supply hardware such as electric drive and sensors, as well as software such as smart cockpits and intelligent driving systems to automobile companies; the second is similar to Intel's HUAWEI INSIDE (HI), which provides a complete set of hardware, smart cockpits and intelligent driving solutions; the third is Huawei's smart car selection model in which it participates in automobile product design and channel sales. This model was officially named "Hongmeng Intelligent Driving" in 2023 and became the golden signboard of Huawei's automotive business.

Although it has extended its tentacles into multiple segments such as auto parts, smart cockpits, smart driving, vehicle design, and car sales channels, Huawei has always insisted that it "will not build cars." As early as 2018, Huawei issued the first resolution signed by Ren Zhengfei not to build cars; in 2021, Huawei once again reiterated that it would not build cars and would not invest in any auto companies.

However, Huawei has repeatedly tested the edge of car manufacturing.

In March last year, the official Weibo account of HUAWEI released a promotional poster with the words "HUAWEI HUAWEI", which was reposted by Huawei. However, at the end of the same month, Huawei once again released the "Resolution on Huawei Not Making Cars" signed by founder Ren Zhengfei, once again emphasizing that "Huawei will not make cars, valid for 5 years" and strictly requiring that Huawei elements must not appear in the promotion and appearance of the entire vehicle. Xu Zhijun, who was the rotating chairman at the time, pointed out in harsh words: Some departments, individuals or partners are abusing the Huawei brand.

As a result, "HUAWEI Wenjie" temporarily withdrew from the automotive market.

The poster of the question world that was briefly named "HUAWEI" @AITO Car

However, Hongmeng Intelligent Driving, which was launched on the market the latest, eventually became the representative of Huawei's automotive BU's influence in the market with its sales far exceeding those of HI mode models.

As the first cooperative brand of Hongmeng Intelligent Driving, Wenjie, produced by Seres, has been established for 3 years. During this period, Huawei and Seres have launched three models, Wenjie M5, Wenjie M7 and Wenjie M9, mainly extended-range plug-in hybrid models, and only Wenjie M5 EV, a pure electric model, has been launched, and its sales share in Wenjie is not high.

However, thanks to the Huawei brand, Hongmeng smart cockpit and intelligent driving capabilities, as well as the advantageous product positioning of SUV and plug-in hybrid, the M5, M7 and M9 have all achieved good responses after their launch, and have promoted SERES, which was originally in the third-tier position of China's automobile industry, to the fastest-growing first-tier new energy vehicle brand.

Before cooperating with Huawei, the annual sales of SERES brand new energy vehicles were less than 800 units; after continuously deepening its cooperation with Huawei, SERES's new energy vehicle models, led by Wenjie, have grown rapidly. In 2021, SERES's new energy vehicle sales were only 41,000 units, and by 2022 it jumped to 135,000 units; in 2023 it increased to 152,000 units; in the first half of this year, SERES's new energy vehicle sales exceeded 200,000 units, a year-on-year increase of 348.55%.

More importantly, according to the earnings announcement disclosed by SERES, the company expects to achieve operating revenue of 63.9 billion to 66.0 billion yuan in the first half of this year; the net profit attributable to shareholders of the listed company is expected to be 1.39 billion to 1.7 billion yuan; and the net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses is expected to be 1.19 billion to 1.5 billion yuan.

This also means that SERES will turn losses into profits, providing strong proof for the success of Huawei's Hongmeng Intelligent Travel business model.

Yu Chengdong previously revealed at the China Electric Vehicle 100 Forum (2024) that Huawei's automotive BU, which suffered a loss of 6 billion yuan last year, was close to breaking even in the first quarter of this year (with Hongmeng Intelligent Driving already profitable), and it is expected that the automotive BU will turn losses into profits starting in April.

Hongmeng Intelligent Driving Hongmeng Intelligent Driving

Dormant"Three Realms"

Despite this, only the Q&A sector is able to represent the performance of Huawei’s automotive business. Huawei’s other three sectors are still largely dormant.

Zhijie, a joint venture between Huawei and Chery, is the only brand other than Wenjie that has models on sale. However, compared with Wenjie, Zhijie's first model S7 has encountered many setbacks since it was launched in November last year, and was once in a delivery problem.

In this regard, Yu Chengdong once explained that the shortage of chips and the relocation of the factory delayed the launch and mass production of Zhijie S7, but it can be restored to normal since April this year.

At the Huawei Hongmeng Ecosystem Spring Communication Conference in April this year, the Zhijie S7 chose a rare "second listing". Huawei also invited Yin Tongyue, chairman of Chery Group, to speak for it for the first time. Yin Tongyue said at the conference: "If China wants to build good cars, it cannot do without Huawei. If China wants to transform from a major automobile country to a world power, it needs the support and empowerment of Huawei's Hongmeng system."

He also emphasized that cooperation with Huawei is Chery's top priority and core strategy. Zhijie is the top priority project. To this end, Zhijie has also established a completely independent business unit, a dedicated smart manufacturing industrial park and special resource investment guarantees. In addition, Zhijie's second model R7 was also announced in the Ministry of Industry and Information Technology in July this year.

SmartS7 Hongmeng Intelligent Driving

The Xiangjie brand jointly developed by Huawei and BAIC also unveiled its first model, the C-class sedan Xiangjie S9, during this year's Beijing Auto Show. The new car is expected to be launched on August 6. Yu Chengdong once said that the Xiangjie S9 is comparable to the Mercedes-Benz S-Class and more comfortable than the Maybach.

Enjoy S9 Hongmeng Intelligent Driving

At the 2024 China Automotive Forum, which closed recently, Jianghuai Automobile Chairman Xiang Xingchu also publicly stated that the first product of the cooperation between Jianghuai and Huawei has now entered the vehicle verification stage, and is scheduled to roll off the production line at the end of this year and be launched in the first half of next year. This model is positioned as a million-level luxury car. The construction of the factory for the production of this model has been basically completed, with an annual production capacity of 200,000 vehicles, and will support the production of more Jianghuai and Huawei cooperation models in the future.

Yu Chengdong also revealed for the first time in the "Walking with Glory" live broadcast room that the Chinese name of the brand cooperating with JAC Motors is "Zunjie", instead of "Aojie" as previously circulated on the Internet.

“Building an ecosystem is more important than manufacturing”

However, apart from Chery, Huawei's other Hongmeng Intelligent Driving partners are not first-tier OEMs. Previously, Chen Hong, former chairman of SAIC Group, used the metaphor of "soul", which to some extent reflects the views of first-tier OEMs on Huawei's automotive BU.

Considering that it will take some time for the production and sales of the new models of Zhijie, Xiangjie and Zunjie to increase, Wenjie will remain the most important business card of Huawei Hongmeng Zhixing in the automotive market for some time to come. At the same time, Huawei is also seeking to establish a new type of cooperative relationship with automakers to address the concerns of more automakers about the "soul".

In November last year, Huawei and Changan Automobile signed a "Memorandum of Investment Cooperation". The two parties established a new company and integrated the core technology and resources of the automotive BU into the new company. Changan Automobile and its affiliates plan to invest in acquiring the target company's equity, with a proportion not exceeding 40%.

Changan Automobile and Huawei Signed a Memorandum of Understanding on Investment Cooperation Huawei

Afterwards, Yu Chengdong, on behalf of Huawei, issued an invitation to open equity to SERES, Chery, JAC, and BAIC at the launch conference of the Zhijie S7, and also invited non-Hongmeng Intelligent Driving partners such as FAW to join.

"Huawei, which makes cars, will not go far." Zhu Xichan fully approves of Huawei's transfer of trademarks to car companies. He told Guancha.com that Tesla is not a traditional car company, so China's smart cars should not learn from Tesla, but should build an ecosystem. Huawei's transfer of trademarks is a manifestation of building the Hongmeng Intelligent Driving ecosystem.

"Manufacturing will always have small profits. A 10% profit is good enough." Zhu Xichan said that despite integrating the resources of the automotive BU into the new joint venture, Huawei still controls the core contents such as data, Internet technology (IT), and artificial intelligence (AI), which are the main sources of future profits: "Huawei should want to become an IT company, not just an automobile company."

This article is an exclusive article of Observer.com and may not be reproduced without authorization.