With the rapid development of the new energy vehicle market and increasing consumer demand for intelligent automobiles, GAC Group and Huawei have decided to collaborate to create a new high-end intelligent new energy vehicle brand. This cooperation aims to combine the strengths of both parties in their respective fields to provide users with a leading intelligent experience.

GAC Group stated that it will create a new high-end intelligent new energy vehicle brand in addition to Trumpchi, Aion, and Aion LX Plus. It also noted that Huawei has a leading edge in intelligence, and the collaboration between the two parties aligns with their common development goals. So, what sparks will ignite from the new collaboration model of "Huawei Intelligence + GAC Smart Manufacturing"?

Familiar Collaboration Model

With the rapid development of new energy vehicles, user demands for intelligence are constantly increasing. Users increasingly expect new energy vehicles to be equipped with advanced intelligent driving assistance systems such as automatic parking, adaptive cruise control, and lane-keeping assistance. These systems not only enhance driving convenience and safety but also provide users with a more intelligent driving experience.

The in-vehicle connectivity and entertainment systems of new energy vehicles are also becoming increasingly important. Users expect vehicles to support voice control, online navigation, real-time traffic updates, music playback, video viewing, and other functions. These features not only enhance entertainment during driving but also turn the vehicle into a mobile intelligent space.

To meet users' high demands for intelligence and further enhance market competitiveness, GAC Group chose to collaborate with Huawei. The two parties signed a deepened cooperation agreement to jointly create a new high-end intelligent new energy vehicle brand through cooperation in joint product development, marketing, and ecosystem services.

This is another significant move by GAC Group following the announcement of the "Panyu Action" plan. It is also Huawei's next step in deeply empowering vehicle manufacturing after "Four Sectors". This signifies a comprehensive collaboration between the leading enterprises in Guangdong's two pillar industries.

GAC Group stated that it will leverage its new brand as a platform to collaborate with Huawei, leveraging their respective strengths in product development, marketing, and ecosystem services to provide users with a leading intelligent experience. The announcement also mentioned that GAC Group and Huawei have maintained a close strategic partnership for many years, with cooperation spanning hardware to software, products to the cloud, and research and development to intelligent manufacturing.

GAC Group refers to this collaboration as a new deep cooperation model of "Huawei Intelligence + GAC Smart Manufacturing," covering research and development, marketing, and services. Judging from this description, it is similar to Huawei's current collaboration models with four other automakers. In summary, the new brand will still belong to GAC Group, but the collaboration will span the entire product lifecycle, starting from the product development phase.

GAC Group Does Not Want to Relinquish Control

From previous collaborations between GAC Group and Huawei, it is evident that GAC Group is reluctant to "relinquish control." In 2021, GAC Aion and Huawei reached a joint research and development agreement for the "AH8 Project." The first model planned for development was the AH8, positioned as an SUV. Additionally, the two parties planned to launch two more models based on the same platform as the AH8: one MPV and one high-end coupe. In this collaboration, GAC Aion would provide its advantages in vehicle manufacturing, model platforms, and battery technology. Huawei would contribute its leading technology in intelligent driving, intelligent cockpits, and connected vehicles.

Under the joint research and development collaboration model, GAC Aion and Huawei would jointly own the development leadership, with both parties defining and developing intelligent vehicles together. However, during the collaboration, adjustments were made to the project's progression. After the adjustment, GAC Aion would lead the development of the AH8 project, while Huawei would provide technical support and component supply as a key supplier.

Besides intelligent vehicles and digitalization, GAC Group and Huawei also collaborate in other areas such as intelligent connectivity and smart manufacturing. In February this year, the first collaboration model between GAC Trumpchi and Huawei, the Trumpchi M8 Master Pioneer Edition, was launched. In April, GAC Trumpchi further announced a comprehensive deep collaboration with Huawei and simultaneously launched the Trumpchi-Huawei Joint Innovation Plan. GAC Trumpchi also stated that future models would utilize Huawei's Kunlun ADS 3.0, 4D millimeter-wave radar, and other technologies.

This shows that GAC Group has always been open to collaborating with Huawei but does not want to become a "contract manufacturer" for Huawei like Thalys. Instead, GAC Group aims to create a new brand with Huawei as a key supplier and collaborator, similar to Changan and Huawei's Avatar. In other words, GAC Group does not want to relinquish control but rather take a leading role.

Different Models Have Their Pros and Cons

GAC Group's reluctance to relinquish control is evident and stems from considerations regarding the collaboration model and strategic positioning. By maintaining control over products, GAC Group protects its brand image and technological secrets while promoting collaboration and development in the field of intelligent vehicles. As a well-known domestic automaker, GAC Group has a strong brand influence and market share. To protect its brand image and market share, GAC Group insists on maintaining control over products in collaborations.

However, relinquishing control is not entirely detrimental. Thalys's market performance is evident. For the first three quarters of 2024, Thalys is expected to achieve revenue of 103 billion to 110 billion yuan, an increase of 518% to 559% year-on-year. Its net profit attributable to shareholders of listed companies is expected to be 3.5 billion to 4.1 billion yuan, turning a profit from a loss compared to the same period last year. This achievement is inseparable from the rapid growth in sales of new energy vehicles.

From January to October this year, Thalys sold over 350,000 new energy vehicles, a year-on-year increase of 310.99%. The AITO M9 sold over 180,000 units in the 11 months since its launch, ranking first in luxury car sales above 500,000 yuan for seven consecutive months. The AITO M7 sold over 300,000 units, ranking first in sales of new force models in China for 11 consecutive months.

Thalys's sales in the new energy vehicle market have shown strong growth momentum, thanks to its technological innovation, market expansion, and support from partners, including significant support from Huawei. In contrast, brands like Avatar and ARCFOX, which have not relinquished control, have not achieved the desired performance in the new energy vehicle market.

Therefore, various collaboration models between automakers and Huawei have their pros and cons. Some aim for sales, while others seek better technological support. For state-owned enterprises like GAC Group, the current collaboration model may be the most ideal.

Public Review

GAC Group's joint vehicle manufacturing plan with Huawei is a significant collaboration in the field of new energy vehicles. By leveraging their respective strengths in hardware and software, the two parties will jointly promote innovation and development in intelligent vehicle products, providing users with a better intelligent experience. This cross-sector collaboration could be a win-win situation for both parties. As for whether this collaboration with Huawei will ignite a spark, only time will tell.