Is Huawei the solution for GAC?
The innovation of electric vehicles has entered a stage of incremental progress. What should Huawang do to help GAC blaze a trail in the high - end market?
"Do what's appropriate for your age." This saying can be applied not only to individuals but also to enterprises.
An enterprise that wants to have a longer lifespan must understand the importance of transformation. GAC is currently at a crucial juncture of this transformation.
Among the representatives of traditional fuel - powered vehicle manufacturers transitioning to electric vehicles, GAC was an early standout. Two years ago, the annual sales volume of GAC Aion reached 480,000 units, which was even higher than the combined sales of NIO and XPeng last year.
However, with the successive price wars and technological battles for equalizing intelligent driving capabilities in the electric vehicle market, the most prominent "cost - effectiveness" advantage of GAC Aion is gradually being eroded by the continuously disseminated technologies. After being labeled as a "ride - hailing vehicle" brand, the sales of the high - end line of Hyper are also far from satisfactory.
GAC has realized that the high - end electric vehicle market requires a brand - new "shell", and this "shell" is Huawang.
Recently, Huawang, a high - end new energy vehicle brand jointly positioned at 300,000 yuan by GAC and Huawei, has started recruiting dealers. Can GAC, which has had an on - again, off - again relationship with Huawei, achieve high - end transformation through Huawang?
Increasing the "Huawei Factor"
Another heavyweight guest has joined Huawei's "circle of friends".
On August 7th, Huawang Automobile, backed by GAC and having a certain "Huawei factor", held its first "dealer recruitment conference" to select dealer partners across the country.
The initial dealer recruitment covers 40 cities, mainly adopting the agency system. The requirements for the venue are: located in the top 3 automobile business districts or the city's core area; the street - facing width should be ≥ 25m; the venue area should be ≥ 2000m²; and it should have second - class or higher maintenance qualifications.
According to Guangzhou Daily, more than 200 dealer investors attended the conference, including top 100 national dealers, large automobile groups, and more than 100 top luxury brand dealers.
There are quite a few stories behind the cooperation between Huawei and GAC.
Four years ago, GAC established a connection with Huawei. At that time, GAC announced that the two parties would jointly develop a mid - to large - sized intelligent pure - electric SUV, originally planned for mass production in 2023. However, two years later, the market did not wait for the jointly developed mass - produced vehicle but instead heard the news of their "separation".
On the evening of March 27, 2023, GAC Group announced that the AH8 project of its holding subsidiary, GAC Aion, would be changed from joint development with Huawei to independent development. After this change, Huawei will continue to participate in the development and cooperation of the company's self - owned brand models as an important supplier. The total investment of the project was adjusted from 925 million yuan to 1.233 billion yuan, and the funds will be self - raised.
In simple terms, the relationship between Huawei and GAC has changed from being "partners" to "suppliers".
There was also a very dramatic episode in between. In 2021, someone asked SAIC if it would consider cooperating with Huawei. SAIC replied that if a company provided an overall solution for them, that company would become the "soul", and SAIC would become the "body". SAIC could not accept such a result and wanted to keep the "soul" in its own hands.
Just one week after this anti - "soul theory", GAC announced its cooperation with Huawei. At that time, netizens joked that GAC was not afraid of losing its "soul".
Two years later, when people saw Huawei and GAC part ways, they realized that GAC also wanted to keep its "soul".
To put it more bluntly, this "soul" is "decision - making power".
Powerful automobile enterprises hope that their supply chains have strong capabilities but low profiles. No large - scale vehicle manufacturer wants to be overshadowed. However, Huawei is a very powerful enterprise in terms of both marketing and influence, which makes some automobile enterprises cautious during cooperation.
Huawei has obviously also realized this, so it has explored several paths to cooperate with automobile enterprises, among which two are relatively mature - the Hi mode and the smart selection mode.
The essential difference between the two modes lies in the decision - making power.
In the Hi - mode cooperation, Huawei plays the role of a "packaged technology seller". The decision - making power in the design, production, and sales of the whole vehicle still lies with the automobile enterprise. As a technology supplier, Huawei provides solutions in areas such as intelligent driving, intelligent cockpit, and electronic control. For example, the ARCFOX Alpha S HI version, Avatr 11, and Deepal L07.
In the smart selection mode, Huawei has more leading power. This can be seen from the naming of the products, which all follow the "Jie" series, such as Wenjie, Zunjie, Zhijie, Xiangjie, Shangjie... From the perspective of Huawei's participation, Huawei is deeply involved from product definition, design, R & D to sales channels.
After the on - again, off - again relationship with GAC, this time the cooperation mode of Huawang is likely to enter a "third path".
From the equity structure of Huawang Automobile, GAC has 100% leading power. GAC Group holds 100% of the controlling stake in Huawang. Recently, after the capital increase of GAC Aion, it holds 28.57% of the equity, and GAC Group directly holds 71.34% of the equity.
In terms of division of labor, their cooperation seems to be between the smart selection and Hi modes. Huawei takes the lead in product positioning and intelligent R & D, while GAC is responsible for production and the supply chain. In terms of sales channels, they neither choose GAC's channels nor Huawei's channels but instead start to recruit dealers.
Competition and Struggle
Another possible reason for innovating the cooperation mode is to avoid competition with Wenjie.
Although Huawang does not use the channels of Hongmeng Smart Mobility, it is difficult to avoid overlapping with Wenjie in product positioning.
The 300,000 - yuan price range, with pure - electric and hybrid options, can be regarded as Wenjie's comfort zone.
Looking at the current four models of Wenjie, its main target is family and business users in the 250,000 - 500,000 - yuan range. In the case of commercial vehicles, Wenjie's brand gene clearly has an advantage, as it has a higher and stronger "Huawei factor".
If avoiding the commercial scenario and competing in the family - car scenario, Huawang can differentiate itself from Wenjie in the "small - family car" market by launching five - seat SUVs. As a late - comer, Huawang can focus more on the "sense of technology" and target young families.
However, whether it can do so depends on how many resources Huawei is willing to allocate. Although there are many "Jie" - series models, Wenjie's status as Huawei's "favorite child" is obvious to all. From the initial publicity, Wenjie has been downplaying Seres and emphasizing Huawei's intelligent driving system. Huawei even put Wenjie directly into its own sales showrooms.
If Wenjie and Huawang are really very similar in terms of positioning and pricing, then the "differentiation" advantage between the two will largely depend on which one Huawei gives the first - mover advantage in technology and resource allocation. Judging from Wenjie's current status, GAC may not have an edge.
In addition to competing with its "brother" for the position of the "favorite child", this positioning also has to compete with other strong players in the market.
The 300,000 - yuan new energy vehicle market is full of strong competitors. Tesla, NIO, Li Auto, and ZEEKR all have representative models in this segment.
The most crucial thing is that the 300,000 - yuan new energy vehicle market has experienced several brutal price wars. From direct vehicle price cuts to indirect means such as interest - free loans, additional equipment, and gifts, the average selling prices of vehicles of enterprises in this segment have declined. For example, from 2022 to 2024, the average price of Li Auto vehicles dropped from 340,500 yuan to 286,400 yuan, and that of NIO dropped from 403,900 yuan to 296,100 yuan.
This wave of price adjustments not only indicates the gradual maturity of the industrial chain but also shows that consumers' demands are becoming more and more demanding. A few years ago, people regarded electric vehicles as "tech toys" for the wealthy to experience and test at a price of over 300,000 yuan. Now that the prices of electric vehicles have generally dropped, people have higher requirements for vehicles that still sell for over 300,000 yuan. They need to be better than those once - popular models that have now dropped to the 200,000 - yuan range.
This is not easy, because the innovation of electric vehicles has entered a stage of incremental progress. In this market, Tesla is the "veteran", NIO represents the high - end segment, and Li Auto has mastered the marketing of space... What should Huawang do to be different? This is a difficult problem.
GAC's Dilemma
Throughout GAC's entire history of vehicle sales, whether in the era of fuel - powered vehicles or during the electric vehicle transformation, selling cost - effective vehicles has been their forte.
In the current popular terms in the automotive circle, one of GAC's "blockbuster models" in the fuel - powered vehicle era is the Trumpchi GS3. The reason for its popularity is that it maximizes cost - effectiveness.
Whether in the era of fuel - powered vehicles or electric vehicles, users who pursue cost - effectiveness usually focus on two aspects: space and fuel efficiency (range). The Trumpchi GS3 addresses these two pain points. Among vehicles in the same class, it has the largest internal space, with a length of 4.41m and a wheelbase of 2.65m. The rear seats and the trunk can be directly transformed into a one - meter - eight - long bed. It also has low fuel consumption, about 0.5 yuan per kilometer, which has won the hearts of young people buying their first cars.
Looking at GAC Aion, the brand that stood out during GAC's electric vehicle transformation, it also focuses on cost - effectiveness.
In 2023, Aion sold 480,000 vehicles, which can be attributed to three factors: timing, location, and human resources.
As for timing, in 2023, the penetration rate of new energy vehicles was in a stage of rapid growth, exceeding 30% for the first time. When a new thing starts to become popular, the best - selling products are usually two types: very expensive ones and very cheap ones. Since people are not fully confident in new technologies, some people buy them just to try without many requirements, while others spend a large amount of money on the top - of - the - line models at that time.
Regarding location, in 2023, the competition in the electric vehicle market below 100,000 yuan was not intense. BYD, which had stopped producing fuel - powered vehicles and was in the second year of transformation, was still ramping up production and had not fully exerted its strength. Another competitor in this price range, the Wuling Hongguang EV, mainly targeted the A00 - class models, which was a different segment from Aion.
In terms of human resources, among low - cost consumers, Aion caught up with the replacement wave of ride - hailing drivers. The Didi platform, which became popular in 2013, reached its tenth - year mark in 2023, which was the replacement wave period. At this time, a pure - electric vehicle with electricity costs less than half of gasoline costs became a good alternative. In 2023, there were 850,000 new ride - hailing vehicles across the country, and nearly 30% of them were Aion models.
The combination of the ride - hailing vehicle dividend, the blank in market positioning, and extreme cost - effectiveness pushed Aion to the peak.
However, Aion then faced two waves of impacts from the electric vehicle market - the price war and the technological war.
In the year after Aion achieved annual sales of 480,000 vehicles, BYD launched a price war with the slogan "electricity is cheaper than gasoline", and Aion was the first to be affected.
The prices of the BYD Honor Edition at 79,800 yuan and the Song PLUS DM - i Champion Edition at 130,000 - 160,000 yuan directly entered the core market of Aion's main - selling models, the AION Y and AION S, which were priced at 110,000 - 160,000 yuan. Aion knows better than anyone that users who choose it because of price may also leave because of lower prices.
In February 2024, the month when BYD launched its price - cut strategy, Aion's sales volume decreased by 66.74% year - on - year. Aion immediately launched a limited - time zero - down - payment/interest - subsidy campaign to try to reverse the situation. In the next month, the year - on - year decline rate of Aion's sales volume slowed down, but it still decreased by 30.4%. In the first seven months of this year, Aion still faced a year - on - year sales decline of about 16%.
Data source: GAC's production and sales monthly report. Chart made by Baobian.
This is because being cheap is a very fragile differentiation advantage, and price cuts are the most basic means. In fact, Aion could have maintained its cost - effectiveness while taking the lead in another segment. For example, it could have been the first to propose the concept of "equalizing intelligent driving capabilities" and introduced intelligent driving technology to low - cost models to regain the leading position. However, Aion failed to do so. It was BYD that first proposed this concept, which put Aion in an embarrassing situation again.
Looking back, GAC's overall high - end transformation has not been smooth.
The monthly sales of Hyper are generally only in the hundreds, and the Trumpchi MPV is not a high - volume model.
Hyper's underperformance may be due to Aion's brand image. It is not easy for a brand labeled as a "ride - hailing vehicle" to achieve high - end transformation. This is not a problem unique to GAC. Many low - end vehicle brands face similar problems when trying to go high - end. A simple and straightforward way is to establish a new high - end brand with a completely new marketing strategy, brand positioning, and design language.
Although Hyper became an independent entity separate from Aion in 2025, its sales volume has not improved. In a hurry, GAC has to start a new project.
Huawang aims to take this path.
Ultimately, GAC has made the same mistake that all fuel - powered vehicle brands make when transitioning to electric vehicles - using the thinking of the fuel - powered vehicle era to develop electric vehicles. As GAC's high - end layout in the electric vehicle market, starting afresh with Huawang is a smart move. However, to succeed, it cannot neglect positioning, pricing, and technology.