Richard Yu wants to overturn Tesla

Author | Chai Xuchen

Editor | Zhou Zhiyu

Richard Yu wants to overturn Tesla

Abstract: Redeem oneself.

In less than a month, appearing on stage publicly three times for a car, Richard Yu spared no effort to make Aito overturn Tesla.

On September 10th, after releasing the world's first mass-produced "three-fold flagship" smartphone, Richard Yu, Chairman of Huawei's Automotive Business Unit, brought the Aito R7. This is the second car jointly created by Chery and Huawei, aiming to directly challenge the current SUV leader - Model Y.

Richard Yu stated that the Aito R7 aims to provide the experience of a "million-level" Model X from Tesla at the price of Model Y, surpassing Model Y by far in terms of intelligent driving, chassis, cabin space, and range, making it a cross-level strike.

In order to take a piece from Model Y, Richard Yu leads Aito R7 to enter the pure electric "coupe SUV" track, attempting to seek incremental growth in this niche market.

Industry insiders point out that this crossover model, which combines coupe and multi-functional SUV features, combines the high passability and safety of an SUV with the streamlined design of a coupe, blending fashion and sporty genes.

In the early years, BMW X6 was the pioneer of this niche market, quickly leading competitors to follow suit, including well-known models such as Mercedes-Benz GLC and GLE Coupe, Porsche Cayenne Coupe, and others.

In the fiercely competitive SUV market, there are few pure electric coupe SUVs, presenting an opportunity for Aito R7. However, breaking out from this market is not easy.

Overall, the coupe SUV market is not large in size, with Mercedes-Benz GLC Coupe selling only 7,061 units in 2023, less than the monthly sales of GLC; BMW's X4 and X6 also have much lower sales than X3 and X5, hovering around a thousand units per month.

This is mainly due to the fact that the classic sloping roof design of coupe SUVs, while aesthetically pleasing, sacrifices interior space, compressing rear passenger and trunk space; in addition, many coupe SUVs are derived from traditional SUVs, resulting in a high center of gravity and compromised handling; at the same time, coupe SUVs are priced high, with the Coupe versions of Mercedes-Benz GLE and GLC being 80,000 to 150,000 yuan more expensive than the regular versions, priced in the range of 500,000 to 750,000 yuan.

This puts coupe SUVs in an awkward position of being admired but not popular, making it difficult to truly break out of the niche circle, and long-term being a "big toy" for individualistic and affluent car owners.

It seems that launching the Aito R7 with a coupe style as the main feature may not be a good choice for Aito, which is urgently seeking volume. However, Richard Yu's strategy is to "dethrone" the "high and mighty" coupe SUVs, and even become a challenger in the pure electric niche market.

Of course, this goal is not easy. At the recent Chengdu Auto Show, many car manufacturers introduced new models to compete with Model Y, including IM Motors LS6, ZEEKR 7X, Aita 07, etc., all of which could be potential competitors of Aito R7 Currently, the sub-market where Model Y is located has become the most fiercely competitive track. Huawei's confidence lies in its "hardcore technology" for the Zhijie R7, which has a pre-sale price of 268,000 yuan.

According to Richard Yu, the Zhijie R7 adopts a completely new design form, while significantly expanding the interior space, surpassing luxury models such as the Porsche Cayenne Coupe and Model X; as for the handling shortcomings of coupe SUVs, Richard Yu has equipped the Zhijie R7 with the "full-blooded" Tuling platform including air suspension and CDC shock absorbers to cope with various conditions.

After breaking free from the constraints of traditional coupe SUVs, Huawei has once again boldly loaded its intelligent technology onto the Zhijie R7, including the Huawei flagship ADS 3.0 end-to-end intelligent driving system, HarmonyOS smart cockpit; as a pure electric model, the R7 also uses the Huawei "Whale" 800V battery platform and 800V high-voltage supercharging solution. It can be said that most of the technology of the HarmonyOS intelligent flagship "9 series" has been "transferred" to the R7.

In fact, not only Huawei is going all out for it, but Chery is also making a big bet on the R7.

At the recent Chengdu Auto Show, Chery Chairman Yin Tongyue stated that the Zhijie R7 concentrates the most advantageous resources of the Chery Group and also places very high demands on the supply chain. Yin Tongyue said, "The quality of the Zhijie R7 is higher than that of BBA. I have been in the auto industry all my life, and the requirements have never been so strict. This time, it has also revolutionized the fate of many suppliers."

Just as the ZEEKR 001 overturned the niche track of hunting vehicles into a new blue ocean market, the Zhijie R7 is ready to break the limitations of traditional coupe SUVs and become a "hot seller" for the brand. Huawei and Chery can also use this opportunity to redeem themselves.

As the second brand under HarmonyOS Intelligent Travel, Zhijie is positioned in the mass high-end market. Last year, it launched the pure electric sedan Zhijie S7. With Huawei's "black technology" and the competitive price of the Model 3, the car received over 20,000 pre-orders within less than 20 days of its debut, but the S7 experienced a high start and low finish.

Due to Chery's factory relocation, chip supply, and other reasons, the average monthly sales volume of the Zhijie S7 in the first 4 months was only a few hundred units. Although the S7 completed a second listing after "price reduction and increased configuration" in April this year, the sales volume still remained unsatisfactory amidst the frequent launch of new products by competitors, dropping to 1541 units in July.

This not only tarnishes Huawei's "golden signboard" but also leads to rumors of strained cooperation with Chery.

This time, the Zhijie R7 has become the bond of deep integration between the two parties. Yin Tongyue emphasized that the cooperation project between Huawei and Chery will always be the top priority strategy internally, and Chery has invested over 10 billion yuan in Zhijie.

On stage, Richard Yu admitted that Huawei's entry into the automotive industry has been a bumpy road: from the short-lived SF5, to the defeat of the first-generation Aito M7, and then the sales fluctuations of the Aito M5.

However, the Aito selection car, which has been feeling its way across the river, has successfully broken through after rapid posture correction: the M7 has become a popular national SUV, the flagship Aito M9 has dominated the entire high-end SUV track, and the executive sedan Enjoy S9 has also achieved initial success.

Now, after the storm of the Aito S7, Richard Yu has more confidence in launching the R7 Next, if Aito R7 with its crossover identity as a coupe SUV successfully disrupts the market, Richard Yu can once again prove the strength of Aito's smart selection of cars. He is also expected to lead the entire HarmonyOS Smart Mobility Corps, knock on the door of the automotive giants' club, and reshape the power structure of this century-old industry