Huawei's Yinwang: A Strategic Layout Empowering the Intelligent Upgrade of China's Automotive Industry

Huawei's Yinwang: A Strategic Layout Empowering the Intelligent Upgrade of China's Automotive IndustryIn 2023, China's automotive industry achieved a production and sales volume exceeding 30 million vehicles, becoming the world's largest automotive exporter. New energy vehicle (NEV) production and sales accounted for over 60% of the global market share

Huawei's Yinwang: A Strategic Layout Empowering the Intelligent Upgrade of China's Automotive Industry

In 2023, China's automotive industry achieved a production and sales volume exceeding 30 million vehicles, becoming the world's largest automotive exporter. New energy vehicle (NEV) production and sales accounted for over 60% of the global market share. In July, domestic monthly retail sales of new energy passenger vehicles surpassed those of traditional fuel vehicles for the first time, marking the official arrival of the NEV era. As a leading enterprise in China's information and communication technology (ICT) sector, Huawei's active involvement in the automotive intelligence field and its strategic choices have drawn significant attention. This article delves into Huawei's strategic layout in the automotive industry, particularly the positioning and vision of its new subsidiary, Shenzhen Yinwang Intelligent Technology Co., Ltd.

Huawei's Automotive Industry Strategy: From "Incremental Component Supplier" to an Open Intelligent Platform

In 2019, Huawei first proposed the concept of an "incremental component supplier," marking its official entry into the automotive sector. At that time, internal disagreements existed regarding specific business directions, but Huawei ultimately chose to focus on electrification and intelligence, rather than traditional automotive components. This strategic choice proved crucial to Huawei's success in the automotive field.

Huawei's advantage in the intelligence field lies in its strong ICT accumulation. By integrating sensors such as LiDAR, millimeter-wave radar, and cameras, as well as computing platforms and edge inference platforms, Huawei has created a leading intelligent driving system, equipping vehicles with a "tireless intelligent driving system." This differs significantly from the previous model of simply providing low-cost components; Huawei targets higher-value intelligent solutions.

In intelligent driving, Huawei boasts a full industrial chain advantage, encompassing chips, hardware, operating systems, software, and cloud training achieving "full ownership and full integration." This stems from Huawei's deep accumulation in ICT and is a key competitive advantage that sets it apart from other manufacturers.

Based on this, Huawei has gradually formed a strategic direction focused on "three intelligences": intelligent cockpit, intelligent driving, and intelligent vehicle control. From the early Internet of Vehicles laboratory to the later Intelligent Automotive Solution BU, and now the establishment of Yinwang, Huawei has consistently adhered to this strategic direction and continuously deepened its layout in the automotive intelligence field.

Yinwang's Positioning and Vision: Building an Open Intelligent Platform for Joint Participation in the Automotive Industry

Huawei registered Shenzhen Yinwang Intelligent Technology Co., Ltd. in January this year and introduced Avita Technology and Seres as shareholders in August. Huawei's rotating chairman, Xu Zhijun, stated that the establishment of Yinwang will not change Huawei's automotive business model; Yinwang will operate independently and receive long-term support from Huawei. The company will continue to use the two core brands, Kunlun Drive and HarmonyOS Cockpit, to jointly lead the second half of the automotive industry's intelligent transformation with its partners.

Xu Zhijun emphasized that Yinwang will be an open intelligent platform for joint participation by the automotive industry, aiming to bring intelligent technology to every vehicle and help automakers "build good cars," "manufacture good cars," and "sell good cars." In the wave of intelligence, automobiles are no longer simply traditional mechanical products but high-tech products centered on technological innovation and software definition. This requires substantial R&D investment but also enhances product competitiveness.

Currently, Yinwang has accumulated over 40 billion yuan in R&D investment and has more than 4,000 intelligent driving software engineers. Through collaborations with automakers such as BAIC, Changan, and Seres, Huawei has gradually refined this new business model. Yinwang employs a software subscription model, offering basic and advanced packages. Automakers can choose to purchase the basic package, while advanced functions can be sold separately to users.

Xu Zhijun frankly admitted that Huawei's automotive business once faced extremely challenging times, with annual losses reaching over 8 billion yuan. However, through persistent efforts, Huawei's automotive BU finally achieved profitability this year. The establishment of Yinwang aims to assist companies lacking investment and capabilities in the intelligence field, allowing them to share Huawei's technology and resources in intelligence. Automakers no longer need to invest heavily in R&D for intelligent driving systems; they can directly use Yinwang's mature solutions.

Selection of Strategic Partners and Equity Opening

In the automotive industry, investment and interest binding between companies are common strategies. Xu Zhijun stated that automakers choosing to use Yinwang products and solutions will be prioritized as strategic partners, and Yinwang will continue to open equity to strategic partners. However, Yinwang only accepts strategic investors, not financial investors, ensuring risk-sharing and profit-sharing. Yinwang will maintain an independent business model and transaction model, treating all customers equally.

Currently, Avita and Seres each hold 10% of Yinwang's equity. Huawei plans to transfer all assets and personnel of Huawei's automotive BU to Yinwang by the end of this year, enabling its independent operation. While Yinwang's future number of partners is not capped, in the short term, its partners will primarily focus on strategic cooperation.

Huawei's Strategic Choice Not to Build Cars: Upholding its Role and Promoting the Development of China's Automotive Industry

Why doesn't Huawei choose to build its own cars? This is a long-standing industry question. Xu Zhijun explained that if Huawei built its own cars, it could only produce Huawei-branded vehicles, with a market share of at most 10%-20%, similar to its performance in the mobile phone market. More importantly, if Huawei built its own cars, Yinwang would only serve its own business and might even need to build automobile manufacturing plants, leading to duplicated resource construction and hindering the overall development of China's automotive industry.

Huawei hopes to inject new vitality and momentum into China's automotive industry through intelligent technology. After Yinwang opens its equity, the principle of "Huawei not building cars" will be even more steadfast. Xu Zhijun emphasized that the initial intention behind establishing Yinwang was to uphold its own role and better promote the development of China's automotive industry. Yinwang will participate in the progress of the entire automotive industry with an open attitude, focusing on the core technologies of intelligent vehicles and developing together with China's automotive industry.

The name "Yinwang" originates from a poem line, "High buildings for distant viewing, a vast plain stretches far," signifying bringing hope to China's automotive industry. Huawei will strive to achieve this goal step by step.

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