Huawei’s Smart Selection Car debuts its first sedan, Luxeed S7, with Yu Chengdong openly claiming superiority in various specifications over the Tesla Model S. On the evening of November 9th, Huawei Smart Selection Car commenced pre-sales for its inaugural sedan, Luxeed S7. Co-developed with Chery, the car is positioned as a mid-sized pure electric coupe, with a starting pre-sale price of 258,000 yuan and an official launch scheduled for November 28th.
Regarding the pre-sale pricing of Luxeed S7, Yu Chengdong, Executive Director and CEO of Huawei’s Consumer Business Group, as well as Chairman of the Intelligent Car Solutions Business Unit, stated, “In terms of pricing, we discussed internally multiple times and finally found that we would incur losses on all four versions of this car, so we can only hope that the high sales volume of this car in the future will compensate for the losses.”
It’s worth noting that on the same day, Huawei’s Smart Selection Car mode was updated to “HarmonyOS Smart Travel.” Yu Chengdong explained, “The Smart Selection Car mode will be further upgraded based on the full-stack solution mode, integrating Huawei’s end-to-end experience for consumers, and this mode will be called HarmonyOS Smart Travel.”
“Benchmarking against Tesla Model 3”
Prior estimates by Shenwan Hongyuan Securities suggested that Luxeed S7’s price would fall in the range of 200,000 to 300,000 yuan. Data reveals that in the past three years, the annual compound growth rate of the 200,000 to 300,000 yuan market segment, where Luxeed S7 competes, reached 13.6%. From January to May this year, it still experienced a 12.7% increase, with an average monthly new car sales volume of around 350,000 units. In terms of overall market share, it has grown from around 15% in early 2020 to the current 24%.
Specifically, in this price range, sales of joint venture brands remain highly stable, averaging around 240,000 units per month. The incremental portion is primarily divided among Tesla Model 3, Model Y, as well as models like BYD Han and XPeng P7 – the three sedans directly competing with Luxeed S7.
“Luxeed S7 covers the mid-sized electric sedan market in the 200,000 to 300,000 yuan range, which is highly competitive but has a large market size. XPeng P7, BYD Han EV, XPeng G3, Tesla Model 3, and Jinko 001 all sell approximately 40,000 to 50,000 units per month. The market size is about 120,000 units, leaving substantial room for further penetration,” stated Guojin Securities.
It’s important to note that sports-style pure electric sedans have not become mainstream despite the advent of electrification in the industry. Data shows that in September, only XPeng P7 and BYD Dolphin, both focusing on a sporty style, made it to the top ten sales of new energy vehicles in the mid-sized and above segments, and they still had significant gaps in sales compared to leading models. This poses a market challenge for Luxeed S7.
In the face of this market environment, Luxeed S7 aims to compete by leveraging its advantages in intelligence. It is the first car equipped with HarmonyOS 4, Huawei’s operating system. “HarmonyOS 4 intelligent cockpit uses the Ark engine, bringing a new 3D car control desktop. Meanwhile, the smart voice assistant Xiaoyi integrates the Pangu model,” said Yu Chengdong.
Additionally, Luxeed S7 is equipped with the same Huawei ADS2.0 advanced intelligent driving system as the recently released Wenjie New M7. The official introduction states that the Huawei ADS2.0 advanced intelligent driving system, using the GOD network, can recognize irregular obstacles through the fusion of multiple sensors, such as laser radar, millimeter-wave radar, and cameras, including overturned vehicles, dropped large cardboard boxes, falling rocks, and fallen trees, and can decelerate and stop.
“Luxeed S7 debuts with parking valet, achieving super-distance autonomous parking, able to actively avoid obstacles and arrive on demand. The advanced intelligent driving system can recognize irregular obstacles, easily cope with complex road conditions, and can drive nationwide without relying on high-precision maps, getting better as it goes,” said Yu Chengdong. “Huawei has the most advanced intelligent driving technology. AEB is just a small case; we have many capabilities in intelligent driving that have not been released. Currently, it’s just the tip of the iceberg.”
In addition, Luxeed S7 also features the new generation HUAWEI DriveONE power platform, Huawei Tuling intelligent chassis, HUAWEI xMotion intelligent body coordination control system, and other Huawei technologies or functions, with a high level of integration.
Regarding the future market performance of Luxeed S7, Shenwan Hongyuan Securities previously stated that Luxeed S7 is benchmarked against the Tesla Model 3. Considering the preliminary channel deployment and competition pressure in the same price segment, the steady-state monthly sales are expected to be in the range of 5,000 to 7,000 units. If the subsequent store stocking efforts exceed expectations, steady-state monthly sales may exceed 10,000 units per month.
HarmonyOS Smart Travel Mode has Four Cooperative Partners
According to Yu Chengdong, Huawei’s current layout in the automotive industry can be divided into three modes: the parts supply mode that provides standardized modules, the solution mode that provides full-stack integrated solutions, and the Smart Selection Car mode, now renamed “HarmonyOS Smart Travel.” “They can be regarded as the Pro version, Plus version, and ProPlus version of Huawei’s automotive industry layout,” said Yu Chengdong.
It’s worth mentioning that just before the Luxeed S7 pre-sale conference, Huawei temporarily changed the event name from “HarmonyOS Smart Travel Launch” to “Smart Travel Solution Release.” Some analysts believe this may be due to the rejection of the “HarmonyOS Smart Travel” trademark by Huawei.
Huang Xuan, a lawyer from Sichuan Chuanrong Law Firm, stated in a media interview, “According to the provisions of China’s Trademark Law, after the applicant receives a notice of trademark rejection, the trademark can continue to be used, but the used trademark is not protected by law.” This means that although Huawei’s “HarmonyOS Smart Travel” trademark has not been successfully registered in the field of smart cars, the applicant can apply to the Trademark Review and Adjudication Board for a review and re-examination of the original case, and it may still be possible to use the “HarmonyOS Smart Travel” trademark afterward.
Yu Chengdong revealed that the current cooperative partners of the HarmonyOS Smart Travel mode are Saicest, Chery, Beiqi, and Jianghuai. It’s worth noting that Huawei’s collaboration with these automakers has different focuses. Huawei, in collaboration with Saicest, has jointly created the AITO Wenjie brand, currently including three models: M5, M7, and the upcoming M9, covering new energy SUV models.
Huawei’s collaboration with Chery is aimed at pure electric sedans and SUV models. The partnership between Huawei and BAIC Blue Valley is set to launch high-end intelligent pure electric sedans in niche areas, while the collaboration with JAC Motors may result in the development of larger new energy MPV models.
However, as the number of HarmonyOS smart travel mode partners increases, Huawei will also face multiple challenges. During the launch of the Wenjie M5, Yu Chengdong revealed, “Wenjie M5 was designed with the help of Huawei’s consumer business industrial design team and software design team, hoping to help solve the pain points of fuel and electric vehicles.” But at the same time, collaborating with multiple car manufacturers means a test for the efficiency of Huawei’s participation in automotive projects.
Secondly, in terms of channels, although Huawei currently has over 5,000 high-end experience stores nationwide, with over 60,000 retail and service outlets, not all Huawei offline stores can sell cars, and not all stores can accommodate multiple vehicles.
A Huawei car business experience expert at a Huawei authorized experience store in the Dawang Road area of Beijing told reporters, “Many (Huawei offline) stores cannot immediately place cars in the right location. Some mall stores are so small that they cannot temporarily accommodate a car and require renovation.”
On the other hand, after collaborating with multiple car manufacturers, the allocation of offline sales channel resources to different car models is also a consideration for Huawei. Regarding issues such as personnel in the automotive project team and the allocation of offline sales channels, reporters inquired with Huawei, but as of the time of writing, no response has been received.
From the current perspective, with the hot sales of the AITO Wenjie new M7, Huawei’s HarmonyOS smart travel mode has shown significant effectiveness, and many car manufacturers are accelerating their cooperation with Huawei. However, as the number of collaboration partners increases, issues such as channel allocation will become topics that Huawei must consider in the future.