What’s new: Chinese automaker GAC Group’s electric vehicle unit is ending its partnership with tech giant Huawei Technologies Co. and will develop its own smart car solution, the automaker said Monday night.
GAC Aion is one of Huawei’s three partners under its “Huawei Inside,” or HI, business model. The termination signals Huawei’s shift away from the HI model to the competing “Huawei Smart Selection” business strategy. The two other partners are BAIC BluePark’s Arcfox and Changan’s Avatr.
As early as August 2022, sources close to GAC told Caixin that Huawei’s cooperation with GAC was discontinued, though Huawei still supplies parts to the automaker.
GAC said in July 2021 that GAC Aion and Huawei would co-build a series of smart cars equipped with the HI solution. Their first co-developed model, a large electric SUV, was originally scheduled to start mass production by the end of this year.
The background: Huawei’s auto business unit has two models in its partnerships with automakers. One is HI, in which automakers use Huawei’s smart car system and the vehicles are identified with HI in their model names. Under the rival Smart Selection program, Huawei provides sales channels and has a bigger voice in development and marketing. Smart Selection targets consumers rather than business partners.
The HI model did not catch on as well as Smart Selection. BAIC’s Arcfox α-S, the first electric car equipped with the full HI system, started small-volume delivery in July 2022, more than a year after it was launched. But the high-end price made for poor sales.
Huawei suspended its auto business Chief Operating Officer Wang Jun over the lackluster performance of the HI model as Huawei has been pushing profitability for the automotive business.
Huawei Consumer and Smart Car Business CEO Yu Chengdong said recently in a media interview that Huawei would cooperate with several automakers to build an ecosystem brand alliance led by Huawei, indicating that Huawei is doubling down on the Smart Selection approach.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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