Horizon Robotics Recruits a Key Figure from Huawei

"There would be no AITO today without Huawei."

Recently, in the Weibo comment section, some comments advised SERES to start independent R & D earlier and break away from Huawei, stating that having core technology is the foundation for standing firm. This statement was a stern response from Kang Bo, the vice - president of SERES Group.

On the other hand, SERES is accelerating its efforts to develop its "own territory."

On December 3rd, the new third - generation E5 PLUS of SERES Landian was launched. Priced in the mass - consumption range of 100,000 to 150,000 yuan, the official suggested retail price is 139,800 yuan, and the limited - time replacement price is only 119,800 yuan. In terms of market positioning, the third - generation Landian E5 PLUS competes with mainstream plug - in hybrid SUVs in the 100,000 - yuan range, such as BYD Song Pro DM - i, Geely Galaxy L7, and Chery Fengyun T9, focusing on long pure - electric range and the concept of family camping.

Some car owners told "Market Insights" that Landian is basically AITO without Huawei. Its appearance is similar to the old AITO M7, but there is a large gap in configuration compared to AITO. In particular, it's a fantasy for a car around 100,000 yuan to be equipped with intelligent driving.

For SERES, supporting Landian means bypassing AITO and promoting its own brand to enter the larger mainstream market of over 100,000 yuan to find new growth points. Therefore, in September this year, SERES invested 175 million yuan to acquire a stake in Chongqing Landian and became the largest shareholder.

For the Landian brand, the launch of the new model is like a "rebirth." A Landian dealer told "Market Insights" that there are few Landian models, and there is an urgent need for new models. At the same time, the manufacturer's marketing support for Landian is insufficient. This year, a single dealer store has suffered losses of hundreds of thousands of yuan.

With the launch of the third - generation Landian E5 PLUS, SERES has taken a crucial step in bypassing the Huawei - related intelligent driving system.

Previously, the Landian brand was not equipped with intelligent driving functions, but the third - generation E5 PLUS uses the Horizon J3 assisted driving solution.

In other words, from equalizing intelligent driving to self - sufficient power solutions, SERES is fully supporting its "illegitimate child" to avoid putting all its eggs in Huawei's basket.

01 Guarding Against Allies

SERES' glorious moment was fixed on November 5th when it was officially listed in Hong Kong. On this day, SERES completed its layout in both A - share and H - share markets. The Hong Kong stocks received over a hundred - fold subscription, and the total fundraising of about 14.3 billion yuan set a record for the IPO scale of Chinese automakers in the Hong Kong stock market.

After that, SERES' market value declined all the way. As of December 17th, the cumulative decline of SERES' Hong Kong stocks was about 18%.

There are two reasons behind this. Firstly, there is an increase in revenue but not in profit at the performance level. In the third quarter, SERES' revenue increased by 15.8% year - on - year, but its net profit decreased by 1.7% year - on - year. This made funds chasing short - term gains choose to withdraw;

Secondly, the market has different views on the future of the "AITO" series. Currently, Hongmeng Smart Mobility has "many children and blessings." AITO, Zhijie, Xiangjie, Zunjie, and Shangjie cover the high - end household, young group, luxury executive, ultra - luxury high - end, and mass - consumption markets respectively. The positioning of each brand is fixed, leaving no room for expansion.

As a representative brand of the extended - range power solution, AITO is facing the impact of the overall downturn in the extended - range market. The wave of equalizing intelligent driving initiated by BYD is weakening the market dominance of Huawei's intelligent driving.

Judging from the current market feedback, Huawei's smart - selection position remains stable. Last year, the sales revenue of Huawei's intelligent automotive solutions business increased by 474.4% year - on - year, and it achieved annual profitability for the first time. Public data shows that as of October this year, the cumulative delivery of Hongmeng Smart Mobility vehicles exceeded one million. Moreover, the average transaction price of these one million vehicles is 390,000 yuan, exceeding the average sales price of BBA in the Chinese market.

However, for automakers, being tied to Huawei means great risks. The price - band competition among brands has become fierce. On November 20th, Huawei's automotive BU launched two new cooperation brands, Yijing in cooperation with Dongfeng and Qijing in cooperation with GAC.

At the Hongmeng Smart Mobility Comprehensive Deepening Cooperation Press Conference on December 9th, Yu Chengdong and the leaders of the "Five Kingdoms" started a live - broadcast on CCTV. Yin Tongyue, the chairman of Chery, revealed the concerns of the "Five Kingdoms" with a joke:

"The 'Five Kingdoms' just make up the starting lineup of a basketball team, but we really don't want it to become the starting lineup of a football team."

For SERES, the group's dependence on the single AITO brand has reached an extreme. In the semi - annual report promotional pictures, SERES detailed three vehicle - related pictures, namely AITO M9, AITO M8, and a group image of the AITO series. For investors, buying SERES is, in a sense, buying AITO and buying Huawei cars.

Judging from the latest production and sales data, AITO is really the lifeblood of SERES, and it is also the reason why SERES must "stand on its own."

The production and sales report of SERES in November showed that the monthly sales of new - energy vehicles of the brand were 55,200 units, a year - on - year increase of 49.84%. The production of new - energy vehicles in November was 55,000 units, a year - on - year increase of 42.02%.

Among them, the monthly production of SERES cars was 51,300 units, a year - on - year increase of 51.22%; the monthly sales were 51,700 units, a year - on - year increase of 59.73%.

It's worth noting the product structure of SERES. The "SERES cars" refer to the AITO brand operated by its subsidiary, and the "new - energy vehicles" refer to the combined value of AITO and Landian. Other models are the original Dongfeng Xiaokang models of the company. In other words, out of the group's total production of 58,000 vehicles, about 51,000 were AITO, about 4,000 were Landian, and more than 3,000 were Dongfeng Xiaokang.

A phenomenon is emerging. The sales of SERES' Landian brand are soaring. The sales in October were less than 2,000 units, and in November, they were close to 4,000 units. The reason is that before the launch of the third - generation Landian E5 PLUS, the old Landian models were having a big price cut.

The person - in - charge of a Landian 4S store revealed that a few months ago, the price of the 165 - km long - range version of Landian E5 PLUS had dropped to about 80,000 yuan, having a significant advantage in terms of cost - effectiveness. At the beginning of the launch of this model, the limited - time fixed price was still 99,800 yuan.

The launch of the new model means Landian's rebound from the bottom. With the launch of the third - generation Landian E5 PLUS, SERES is seeking to gain a foothold in the mid - size SUV market.

02 Building Self - Sustenance

SERES is implementing a dual strategy. On one hand, it is deeply tied to Huawei with large - scale investment. On the other hand, it is building its own technological moat at all costs.

After spending 2.5 billion yuan in July last year to acquire the AITO trademark and related patents, SERES launched a series of capital operations to strengthen its strategic alliance with Huawei.

The two biggest ones are becoming a shareholder of Huawei's automotive BU and acquiring production capacity.

On August 23rd last year, SERES spent 11.5 billion yuan to acquire a 10% stake in Shenzhen Yinwang Intelligent Technology Co., Ltd. This amount is close to one - tenth of SERES' annual revenue and twice its net profit. On March 25th this year, SERES announced that it would acquire all the equity of Longsheng New Energy for 8.164 billion yuan. The latter is the core production capacity source of AITO cars, with an annual production capacity of 700,000 units.

Meanwhile, SERES is also building its own territory. In September this year, SERES invested 175 million yuan to acquire a 35% stake in Chongqing Landian and became the largest shareholder.

In this capital game, it is obvious that SERES is more determined to embrace Huawei. To strengthen the strategic binding and promote AITO, SERES has invested more than 20 billion yuan and established a strategic alliance with Huawei. On the other hand, SERES is also firmly implementing a multi - brand strategy.

The layout in the sales channel is also worth noting. Public reports show that SERES is planning to open its first brand flagship store to display its own brand models, including AITO and Landian.

Previously, SERES' sales channels included experience centers and user centers. The former are mainly Huawei's direct - sales stores and authorized stores, which are mainly responsible for providing display and test drives and directing orders to offline user centers. The latter include SERES - authorized and Hongmeng - authorized centers, which mainly provide vehicle display, sales, after - sales maintenance, and other services.

After completing sales through Huawei's channels, SERES needs to pay sales service fees to Huawei. In the third quarter of this year, SERES' sales expenses were 7.049 billion yuan, a year - on - year increase of more than 33%, becoming a major obstacle to SERES' profit.

Although Huawei's channels can provide greater brand support for AITO, as the sales of the AITO brand increase and the sales expenses rise, SERES needs to gradually increase the scale of its self - operated channels. This is not only to ensure the subsequent sales of the AITO brand but also to drive up the sales of Landian with the high - end brand.

In Huawei's channels, the mass - market price range has been occupied by Shangjie (150,000 - 250,000 yuan). Deploying Landian in the 100,000 - yuan range in its own channels is beneficial for SERES to avoid competition with AITO and impact sales with a cost - effective model to compete for survival space.

At the technical level, SERES is also accelerating.

On December 4th, SERES released the AI - driven intelligent electric platform architecture, the Magic Cube Technology Platform 2.0. The entire architecture covers key areas such as in - vehicle interaction, intelligent cockpit scenario adaptation, intelligent chassis, and power systems. At the same time, through modular design, SERES enables the platform to support the development of sedans, SUVs, MPVs, and other vehicle types, ensuring that different models can be produced on the same production line.

Landian is the testing ground for this new architecture. A Landian dealer told "Market Insights" that the brand has replaced the plug - in hybrid technology from the BYD DMI solution with its self - developed version. Currently, the main connection between the third - generation Landian E5 PLUS and Huawei technology is the Huawei HiCar 4.0 in - vehicle interaction system, which also supports Huawei Xiaoyi voice assistant. Compared with AITO, the "Huawei content" of Landian has been minimized.

03 The Key to Success Lies in Intelligent Driving

Beyond brand competition, SERES' greater ambition lies in competing for the dominance of intelligent driving solutions.

Last year, the research institution Jielanlu conducted a survey among the first 90 owners of AITO M9. When asked about the reason for choosing AITO M9, Huawei's intelligent driving function ranked first, with 67% of the owners choosing this option. The second - ranked reason was the intelligent cockpit, which is also Huawei's HarmonyOS 4.

More than one car owner told "Market Insights" that the advantages of the Landian brand are high cost - effectiveness and strong endurance, but don't expect Huawei's intelligent cockpit and intelligent driving functions: "What intelligent driving do you expect from a 100,000 - yuan car?"

For SERES, the top priority in building "the illegitimate child" Landian may be to find a competitive intelligent driving supplier. SAIC may be an example for SERES to learn from.

In SAIC Group's product matrix, IM Motors is a representative model of the Momenta solution, while Shangjie is a representative of the Huawei smart - selection solution. Analogous to mobile phone manufacturers, it is similar to producing both Android phones and Apple phones.

The benefits are obvious. The Shangjie model can leverage Huawei's brand effect in the short term to create a popular brand in a short time. The IM Motors model, as a high - end model, is beneficial for automakers to retain dominance and participate in the development of intelligent driving solutions. More importantly, cooperating with two leading suppliers at the same time can help automakers avoid the risk of relying on a single supplier and gain more initiative.

The trend of equalizing intelligent driving this year has also forced Landian to take action in intelligent driving configuration.

Wang Chuanfu of BYD called for "sharing good technology with the public" at an intelligent strategy press conference and extended the Tian Shen Zhi Yan intelligent driving solution to models below 100,000 yuan. Yu Kai of Horizon shouted, "Don't national cars deserve urban assisted driving?" His single - chip Journey 6M urban assisted driving solution is also covering the mainstream 100,000 - yuan market.

In the newly launched third - generation Landian E5 PLUS, SERES has found an alternative solution.

This new bet model of Landian uses the Horizon J3 assisted driving domain - control solution, supporting L2 - level assisted driving. It is equipped with functions such as lane - keeping assist, adaptive cruise control, emergency braking, blind - spot monitoring, automatic parking, automatic lane - changing, and lane - changing assist. Taking the emergency braking function as an example, it can support the vehicle to stop at a maximum speed of 80 km/h.