In the driving seat–Huawei takes the wheel of SERES partnership

By PAN Tao

Chinese tech giant Huawei has repeatedly stated that it is not making cars. While patently true that Huawei is not actually making cars, the network superpower is increasingly enmeshed in the auto-making industry.

YU Chengdong, CEO of Huawei’s auto business, told Jiemian last month that there is no need for Huawei to make its own cars. A much better way to do it would be to lead a consortium – in this case, the Wenjie Ecosystem Alliance – and make cars in partnership with them.

The war of words took another turn on Thursday, when SERES, the main EV-making partner of Huawei, changed the name of its EVs on the publicity materials from AITO Wenjie to Huawei Wenjie.

Headquartered in Shenzhen, Guangdong province, Huawei Technologies Co., Ltd. is a multinational tech corporation that designs, develops, manufactures, distributes and sells telecom equipment and consumer electronics. Founded in 1987 by former army officer REN Zhengfei, Huawei has grown from its roots in manufacturing phone parts to building telecommunications networks for enterprises inside and outside of China.

Huawei moved into auto technology as far back as 2013, when a new unit began to develop internet-based auto applications. At a senior management meeting at the end of 2018, the company decided it would not make cars itself. Also that year, Washington passed a defense funding bill that prevented the federal government from doing any business with Huawei and several other Chinese vendors, citing “national-security concerns.”

In 2019, the company showed up at the Shanghai motor show for the first time and announced a plan to become an auto parts supplier. A month later, Huawei officially set up an auto business unit.

Back at the Shanghai International Automobile Exhibition in 2021, SERES and Huawei formally reached an agreement on cooperation to empower each other to provide high-performance, intelligent travel solutions. SERES was founded in Santa Clara, California in 2016 to produce electric vehicles. In early 2017, SF Motors’ parent company, Sokon, was granted permits to produce electric vehicles In China.

In November last year, the US banned all sales and import of Huawei products for national security reasons.

The vehicle formerly known as the AITO Wenjie, is now to be known as the Huawei Wenjie. On the news, an excitable market pricked up its ears. Huawei was finally making cars! Or maybe Huawei had just designed a cool logo to stick on the back of someone else’s car? Who knew? And who cared? The EV market will take a bite out of almost any supposition right now.

Not for the first time, both companies denied everything. There is almost nothing to be denied. Ren Zhengfei has always been opposed to making cars. In an October 2020 memo, he said "anyone who suggests Huawei build cars can find another job."

All cars manufactured everywhere are products of countless individual enterprises, often supplying crucial components. No one suggests that tire manufacturers or aluminum smelters are making cars. But cars certainly roll off production lines, and they all have names.

Beneath the calm surface, a tricky undercurrent flows. Huawei doesn’t have the equipment to manufacture cars, nor does it have people who can make cars. However, Huawei has software, chips, design, experience, quality control, and more.  All data is uploaded to Huawei, a source told Jiemian News.

This means that in terms of the partnership between the two, Huawei holds all data of the Wenjie project as well as the sales distribution channel. If SERES wants the data, it has to ask nicely.

Unhappy with this arrangement, SERES wants to see the data without Huawei’s permission and has formed a team to take the matter forward. Both sides know exactly what is going on, but neither of them wants to prick the bubble, at least not yet.

Doubts as to whether the AITO Wenjie was a product of joint R&D by SERES and Huawei seem to have little basis and serve less purpose. The claim that SERES is nothing more than an assembly line piecing parts together for Huawei, holds little water. There is little doubt that the things we think of as a “car” – doors and windows, wheels, body panels, powertrains – are not being made, nor very much influenced by, Huawei.

A SERES employee who asked not to be named said a Huawei team came to SERES in May 2021 and the Wenjie M5 and M7 were jointly developed by the two companies. The cockpit is designed and made by Huawei but product and assembly decisions are taken by SERES. The future depends on the ability of the car company. The car is the main vehicle, Huawei is a mere auxiliary.

“I think from the look of the cars to the actual production, SERES has played a huge part,” he said. “I don’t think we are just an assembly operation.”

It is important to remember that very little is changing in the real world. This is about words. The same worker in the Chongqing factory is peeling similar plastic film off the same component and fitting it into an identical slot in a vehicle that was conceived at designed long ago, at least in terms of the wording of PR.

In a previous PR change, the role of Huawei - previously described as empowerment – was switched to leadership, a rewording calculated to stimulate conjecture. AITO shops – which are actually Huawei stores – will presumably now lapse back to the old Huawei ways. But of course, that doesn’t mean Huawei manufactures cars, like it does every other item on sale in the showroom.

Last year, AITO Wenjie sold 75,000 cars, but in January, that had fallen to less than 5,000. Meanwhile, the Wenjie Ecosystem Alliance is getting bigger, with big names like Chery, JAC and BAIC in the picture.

On January 13, e-SUV SERES 5 was introduced to Europe at the Brussels Motor Show. The company claims it has received more than 20,000 orders.

SERES is looking over its shoulder and making haste to find an alternative solution in case the honeymoon with Huawei comes to an end someday.