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Is it possible that the electric vehicles (EVs) jointly developed by Audi and SAIC Motor based on SAIC's platform will not bear Audi's iconic "four rings" logo?

Produced by | Heyan Yueche Studio

Written by | Zhang Dachuan

Edited by | Heyanzi

Full text: 2447 words

Reading time: 4 minutes

Recently, foreign media reported that the EVs jointly developed by Audi and SAIC Motor based on SAIC's platform will not bear Audi's "four rings" logo. In response, SAIC Motor, Audi China, and SAIC Audi all stated: "There are no official announcements related to this matter at present." This response has increased uncertainty regarding the use of Audi's "four rings" logo on the new models.

If this information is true, people's first reaction might be that Audi does not fully recognize SAIC's capabilities. After all, parallel to this project, Volkswagen vehicles using Xpeng's technology will still bear the Volkswagen logo.

△Foreign media reported that SAIC Audi's EVs developed based on SAIC technology will not bear Audi's "four rings" logo.

SAIC Audi Strengthens Electric Vehicle Efforts

Before signing with SAIC Motor, Audi had been using Volkswagen's MEB platform for EVs and had launched the FAW Audi Q4 e-tron and SAIC Audi Q5 e-tron in China. From the end of this year, Audi's first EV based on the Volkswagen PPE platform, the FAW Audi Q6L e-tron, will be launched in China. However, given the ongoing price wars in the Chinese automotive market, the Q6L e-tron may struggle to establish a strong foothold domestically without significant losses. After all, Audi still lags behind China's mainstream new energy vehicle (NEV) makers in terms of product competitiveness and brand appeal.

△Can the first FAW Audi Q6L e-tron based on Volkswagen's PPE platform establish a foothold in the domestic market?

In this context, Audi sought cooperation with SAIC to introduce SAIC Zhiji's mature platform and technology, hoping to bridge the gap with China's mainstream NEV makers as quickly as possible. In fact, rumors of cooperation between Audi and SAIC have been circulating in the industry for a long time, and the project was officially announced on May 20th this year. On this special day, SAIC Motor and Audi signed an agreement to jointly develop a new platform focused on the Chinese market, the "Advanced Digitized Platform," and build a new generation of high-end intelligent connected vehicles based on this platform.

△SAIC and Audi will cooperate on the Advanced Digitized Platform

Internally, this project is code-named "Purple" by SAIC Audi. According to plans, SAIC Audi will unveil its first concept car in November this year and launch its first model in 2025. It is expected that the "Purple" project will introduce nine new models by 2030. The rapid launch of multiple models in a short period is mainly due to the use of readily available technologies. It is reported that the models under the "Purple" project will adopt CATL batteries, and Momenta, heavily invested in by SAIC, will provide the intelligent driving system. SAIC's high-end EV brand, Zhiji, will provide the vehicle's electrical architecture, which is standard for Zhiji models sold domestically.

Did Audi Betray SAIC?

If introducing SAIC Zhiji's technology is a good thing, why are there concerns about using Audi's "four rings" logo? Firstly, we can rule out the idea that Audi does not recognize SAIC's capabilities.

In the EV sector, domestic consumers are not as obsessed with luxury brands as they were in the era of internal combustion engine vehicles. People tend to have a higher level of acceptance for new energy vehicle brands than luxury brands. Looking at domestic EV sales rankings, besides Tesla's two models, only heavily discounted ID.3 occasionally appears on the list. BMW's previous 50% off deal on the i3 also forced BMW to withdraw from the price war. Against this backdrop, even if SAIC Audi's EVs do not bear the Audi brand, it's not the end of the world.

△The heavily discounted BMW i3 has had a significant impact on the BMW brand

What could be the reasons behind this decision? They may be related to the following two aspects:

1. Audi's own reputation

As a leading global luxury brand, Audi's decision to introduce SAIC's technology is not particularly "glorious." This not only indicates that Audi's PPE platform may not be competitive enough in the domestic market but also that Volkswagen's future SSP platform may struggle to meet the challenges of the current domestic EV market. This is one of the main reasons why Volkswagen has invested in Xpeng and Rivian. Therefore, Audi's decision to introduce SAIC's technology was made out of necessity. Considering Audi's significantly higher brand recognition compared to Zhiji, it would be more detrimental than beneficial for Audi to allow Zhiji-based SAIC Audi EVs to bear a new brand.

△The delay of the SSP architecture forced Volkswagen and Audi to separately cooperate with domestic new forces

2. Pressure from FAW Audi

In addition to SAIC Audi, Audi's joint venture partner in China also includes FAW Audi, which is Audi's primary source of sales and profits in China. If SAIC Audi achieves significant sales growth in EVs with Zhiji's technology, FAW Audi's influence within the Audi family may be weakened. Compared to SAIC, FAW lacks a prominent new energy vehicle brand, and its achievements in the battery-electric system and intelligent connectivity are also less impressive than SAIC's. Therefore, it is understandable that FAW Audi strongly opposes SAIC Audi's decision to bear the "four rings" logo on Zhiji-based EVs.

△FAW Audi aims to avoid being marginalized in China's EV market

SAIC Should Focus on the Long Term and Future

The inability to bear the Audi "four rings" logo means that SAIC Audi's EVs will need to adopt a new brand. In today's domestic automotive market, promoting a new brand and enhancing brand awareness will be a significant challenge for SAIC Audi. There may even be a need to compromise on brand premium due to the lack of the Audi brand.

However, even so, SAIC should fully promote its cooperation with Audi.

As a globally renowned automotive brand, Audi's decision to introduce SAIC's technology for production and sales within the SAIC Audi system is recognition of SAIC's technology. Through cooperation with Audi, SAIC is confident in negotiating with General Motors. After all, General Motors and Audi/Volkswagen face similar situations in China, and their heavily invested Ultium platform has struggled to attract domestic consumers. If General Motors is also willing to introduce SAIC Zhiji's full suite of technologies, SAIC could achieve both fame and fortune.

△SAIC-GM's EVs based on the Ultium platform have not become mainstream in the domestic market

SAIC is actively expanding into global markets, but building overseas markets takes time. However, compared to exporting complete vehicles, technology licensing is a low-cost, high-return operation model. In this area, Geely's licensing of its SEA architecture to overseas holding/joint venture companies for reverse technology exports is a good example. If Audi eventually recognizes SAIC's technology through the introduction of Zhiji's technology and is willing to use it globally, even without the Audi "four rings" logo, this deal would still be worthwhile.

△SAIC Zhiji's platform and technology have the opportunity to enter global markets like the SEA architecture

Commentary

For SAIC Audi, using the Audi "four rings" logo would be the most time- and effort-saving option. However, if Audi does not allow SAIC Audi to use it, it's not the end of the world. From the perspective of the entire SAIC Group, Audi's willingness to procure relevant platform technologies is already a significant success. With SAIC Audi's system capabilities, starting from scratch is not entirely without chances of success. SAIC should consider how to export its technology globally and earn real money while avoiding trade barriers, which is crucial for the company's next stage of development.

(This article is originally created by Heyan Yueche and may not be reproduced without authorization)