<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/a64f5f50-38f4-4801-96d9-dbb6482910e8.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/a64f5f50-38f4-4801-96d9-dbb6482910e8.jpeg"/> Author | Wang Xiaojun
Editor | Chai Xuchen
The stories of mergers and separations in the automotive industry continue to unfold.
On August 11, a piece of news from the capital market stirred the automotive industry, as GAC Aion planned to invest no more than 30% equity in Huawang Automotive. As for this news, Aion has not yet responded.
Huawang Automotive is the core vehicle of the strategic cooperation between GAC Group and Huawei, established on March 18. The last news regarding Aion and Huawei was a downgrade in cooperation two years ago.
In the two years since their high-profile separation to a capital marriage, the renewed handshake between GAC Aion and Huawei reflects the real dilemmas and strategic choices faced by traditional new energy vehicle companies in their pursuit of high-end markets.
According to the plan, Huawang's new vehicle targets the high-end market around 300,000 yuan, a market that Aion has long coveted but struggled to penetrate. This time, with the cooperation of Huawei, which has considerable experience in the high-end market, Aion's high-end dreams seem to be on the verge of a new story.
<h2>Renewed Partnership</h2>
Since GAC Group and Huawei signed a deepening cooperation agreement at the end of November last year, the progress of their collaboration has been closely watched by the market.
On March 18, GAC Group invested 1.5 billion yuan to establish Huawang Automotive Technology Co., Ltd. as the &#34;core vehicle of the strategic cooperation between GAC and Huawei,&#34; with the first model expected to be launched in 2026.
On August 11, a key movement was reported in the capital market, as GAC Aion planned to inject capital into Huawang, holding no more than 30% of the shares.
This is understandable; on one hand, Aion is the vanguard of GAC's new energy transformation and an important lever for GAC's push into independent brands; on the other hand, in the previous cooperation between GAC and Huawei, Aion was also a key player.
Looking back to July 2021, GAC and Huawei signed a strategic agreement to jointly develop a mid-large pure electric SUV codenamed AH8. Huawei provided the CCA (Computing and Communication Architecture), while GAC contributed the GEP3.0 chassis platform, with a total investment of 788 million yuan, planning to achieve mass production by the end of 2023.
The project was initially highly anticipated, as the jointly developed AH8 model was under Aion.
However, less than two years later, a sudden change occurred. At the end of March 2023, GAC Group suddenly announced that the AH8 project would shift from joint development to independent development. Huawei was downgraded from a joint developer to a supplier role. Interestingly, the total investment amount increased from 925 million yuan to 1.233 billion yuan.
Regarding this decision, GAC's senior management explained at the time: &#34;Independent development is more flexible and has advantages in speed, and each brand's pursuit of advancement is different. GAC is more focused on the advancement in profitability, and certain personalized advancements can be temporarily abandoned.&#34;
At that time, the industry generally believed that the core of the disagreement lay in the irreconcilable conflict between Huawei's strong &#34;full-stack solution&#34; dominance and GAC's insistence on control over core technologies. Moreover, Aion was still a hot star in the new forces, with sales continuously climbing for a long time, and did not need to rely on Huawei to boost sales
Currently, the news from the capital level since the establishment of the new company in March indicates that the cooperation between both parties is progressing steadily.
At the development mobilization meeting held on August 8, GAC Group emphasized the deep integration of both parties' advantages, benchmarking Huawei's IPD and IPMS system experience to build a new process covering product definition, marketing, and ecological services.
GAC stated that Huawang Automotive will create an independent high-end automotive brand, with new models equipped with Huawei's intelligent driving software, intelligent cockpit, and intelligent vehicle control solutions. Currently, two models are planned, one sedan and one SUV, with power options including pure electric and range-extended.
<h2>Targeting High-End</h2>
From the positioning of the early models in the cooperation, the main target this time is the high-end market, which is a relatively weak area for GAC Aion.
GAC Aion is not a weak player in the new energy vehicle market. During 2022-2023, its sales once exceeded a monthly sales peak of 50,000 units, and in October 2022, it set a record for Series A financing at 18.294 billion yuan.
However, underlying concerns are hidden beneath the surface. Consumer awareness of Aion mainly comes from the B-end ride-hailing market, resulting in insufficient brand premium capability. Among the five models currently sold by GAC Aion, the AION S and AION Y, priced between 150,000 and 200,000 yuan, contributed the majority of sales.
The performance of high-end models is particularly bleak. The AION LX, which was launched earlier and positioned as the highest, has long had poor sales and a low presence within the Aion system. The latest AION RT is viewed by the industry as a further exploration into the low-end market.
Additionally, the high-end brand Haobo under its umbrella has also not achieved notable sales. After Aion launched Haobo with great fanfare in 2023, sales only reached several thousand units in the first few months, and the flagship model Haobo GT saw its sales plummet to less than a thousand units in the month following its launch. For the entire year of 2024, Haobo sold only about 17,000 units.
Aion has not been without effort. To make high-end models appear more valuable, Aion launched the Haobo SSR priced at 1.286 million yuan around 2023, but it quickly lost traction, with annual sales of only about 300 units, becoming a &#34;muscle-showing technical mascot.&#34;
Currently, sales data reveals a more severe reality, with Aion's monthly sales dropping to around 25,000 units by 2025, and July sales at 26,557 units, a year-on-year decline of 24.6%. From its peak, Aion urgently needs new growth points.
Aion's competitiveness is gradually dissipating, and for GAC, Huawei's intelligent technology has become a key bargaining chip for Aion's breakthrough in the high-end market.
According to the plan, Huawang models will be equipped with Huawei's full-stack intelligent automotive solutions, covering core technologies such as intelligent driving, HarmonyOS cockpit, and intelligent vehicle control. These technologies have been validated across various brands under Hongmeng Zhixing, providing more certainty for GAC and Aion.
GAC Group Chairman Feng Xingya emphasized on social media that the Huawang project is an important part of the &#34;Panyu Action&#34; reform, embodying the firm determination for corporate transformation and upgrading. For Aion, the Huawang project is not only about breaking into the high-end market but also about a reshaping of brand genes.
Currently, competition in the industry is particularly fierce. Everyone is looking for their own strengths or suitable partners, fiercely competing in the second half of intelligence. In the face of setbacks in both joint ventures and independent operations, GAC has to pull out bigger moves to maintain its position
Aion, as a pioneer, needs more impressive achievements.
Currently, in addition to the &#34;Four Realms&#34; of the Smart Selection Car, many brands such as Changan, Voyah, and Equation Leopard are also collaborating with Huawei. However, the specific performance of each brand will depend on its own strength. GAC and Aion also need to accelerate the completion of their own intelligent and high-end puzzle in order to have more initiative in future competition

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Aion has been struggling to penetrate the high-end market

- On August 11, GAC Aion announced plans to invest up to 30% in Huawang Automotive, a key player in GAC's strategic partnership with Huawei.  
- This collaboration aims to target the high-end market, where Aion has struggled, leveraging Huawei's expertise in smart technology to enhance its offerings.  
- The partnership reflects GAC Aion's need for a competitive edge in the rapidly evolving automotive landscape, as it seeks to redefine its brand and improve sales performance.

Betting on Huawei, GAC Aion aims to compete in the high-end market again