"Perhaps fearing a repeat of past mistakes, Yin Tongyue emphasized the delivery of Zeekr R7 to reassure consumers."

@TechInsights Original

Chery's chairman vows to ensure Zeekr delivery, even if it means sacrificing some of Chery's production capacity!

Recently, at the Guangzhou Auto Show, Yin Tongyue, Chairman of Chery, and Yu Chengdong, Chairman of Huawei's Intelligent Automobile Solution BU, participated in a live broadcast. Yin Tongyue declared that Chery would unwaveringly cooperate with Huawei and ensure the delivery of Zeekr R7, even if it meant sacrificing some of Chery's production capacity.

According to data, Zeekr R7 is the second model collaboration between Huawei and Chery. Why did Yin Tongyue make such a statement? Last year, the first model collaboration between Huawei and Chery, Zeekr S7, was launched, but due to production constraints, deliveries in the first four months after its launch were less than 1,000 units. Perhaps fearing a repeat of past mistakes, Yin Tongyue emphasized the delivery of Zeekr R7 to reassure consumers.

At the auto show, Yin Tongyue also said, "Following Huawei and Yu Chengdong will surely lead to success." Within just 14 days of its launch, Zeekr R7 received over 20,000 firm orders, and by the 33rd day, the total number of firm orders had surpassed 30,000. Before the recently opened Guangzhou Auto Show, Zeekr R7 had delivered over 10,000 units.

 Sina Weibo @Yu Chengdong

So far, Zeekr R7 has achieved impressive results. However, whether it can truly be considered a success remains to be seen.

01

Rivaling Model Y

It is reported that Zeekr R7 was originally scheduled to open for firm orders at Huawei's Autumn New Product Launch Event in 2024. However, at the event on September 24, Yu Chengdong announced the official launch of Zeekr R7, a last-minute adjustment as Yin Tongyue, Chairman of Chery Automobile, was unable to attend due to overseas travel.

From an external perspective, the launch of Zeekr R7 represents a new opportunity for the Zeekr brand. Yu Chengdong stated at the launch event that each Zeekr R7 sold results in a loss of approximately $30,000 and expressed hope that cooperation with Chery would help reduce costs as soon as possible.

 Economic Information Daily

At that time, many pure electric vehicles were unveiled, ushering in a new wave of new car launches in the domestic auto market, with several models priced at around $20,000 becoming the focus of market attention. Zeekr R7 opened for pre-orders just two weeks before its launch. However, unlike the launch of Zeekr S7, issues related to cooperation between Huawei and Chery had been resolved by then, as reported by the Economic Information Daily, citing industry insiders. The upcoming National Day holiday, accelerated production schedules, and the recent concentrated launch of models at similar price points are the main reasons for the early launch of Zeekr R7.

Zeekr R7 is positioned to rival Tesla Model Y, the leader in the pure electric SUV market. Positioning is not the key; what matters is that Zeekr R7's product capabilities have reached a superior level, even surpassing the million-dollar Model X in many aspects.

However, industry insiders told TMTPost that the user base of Zeekr R7 may not align with that of Model Y, or that Huawei's fan base differs from Tesla's. This explains why many manufacturers compare themselves to Tesla in their presentations but have never surpassed them – the user bases are different.

In fact, it's not just Zeekr R7 that's targeting Tesla Model Y; other automakers such as NIO, Xpeng, and IM Motors have also positioned their new models to compete with Model Y, leading to what has been dubbed the "Six Sects Siege of Tesla" by the outside world.

Wan Chunlei, an automotive industry analyst, told China Business Daily that these new models will find it difficult to pose a substantial threat to Tesla Model Y in the short term. The reason is that Model Y has earned its current position through market validation, while these new models still need to undergo market validation.

Tesla Model Y sold over 48,000 units in September this year and over 36,000 units in October in China, demonstrating strong competitiveness in the new energy vehicle market. For Zeekr R7 to outperform Model Y, the pressure is considerable.

02

Three Attempts at Perfection

Zeekr S7 was first launched on November 9, 2023, and by November 28 of that year, its reservations had surpassed 20,000 units, generating market excitement. Unfortunately, due to production constraints, Zeekr S7's delivery volumes were not optimistic, and there was even doubt about the cooperation between Huawei and Chery. In March this year, Yu Chengdong responded for the first time, attributing the delays in mass production and launch to chip shortages and factory relocations.

In April this year, Zeekr S7 underwent a "second launch," but its delivery volumes declined monthly from April to June, with 4,546, 3,455, and 2,995 units delivered, respectively, failing to sustain the initial glow of its first launch. By August, Zeekr S7 had delivered 1,426 units, with cumulative sales of only 16,974 units from January to August this year.

However, the new Zeekr S7 is set to launch later this month. Some netizens joked, "Xiaomi spends three years perfecting one sword, Xpeng one year for three, and now Zeekr S7 is perfecting one sword three times!" Whether the new Zeekr S7 can achieve a rebirth remains to be seen.

According to China Securities Journal, citing industry insiders, after a high opening but declining sales trajectory, the revamped new AITO M7 has become a hit model powered by HarmonyOS Intelligent Driving. Therefore, the sales trend of the new Zeekr S7 is worth paying attention to.

Yin Tongyue, Chairman of Chery Automobile, has previously stated that Zeekr is a "top priority strategic" project for Chery, with billions of yuan invested and a research and development team of over a thousand people. At the end of 2023, Yin Tongyue vowed that in 2024, Chery would return to the top three in the new energy vehicle industry and aim to become the second-largest player by the end of the year.

 Yin Tongyue and Luo Zhenyu

This year, Chery has indeed made significant progress in its new energy business. However, compared to other companies in the same industry, Chery's new energy business is still relatively weak, and most of Chery's new energy products are concentrated in the low- to mid-end market segment priced below $20,000.

As a large domestic auto group, Chery has been on its IPO journey for 20 years. Recently, there have been reports that its subsidiary, Chery Automobile, is expected to list in Hong Kong as early as 2025 with a valuation exceeding $14 billion. As the IPO dream nears reality, both the new Zeekr S7 and Zeekr R7 need to fight hard battles to prove their strength.