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Within the HarmonyOS Intelligent Drive ecosystem, ZEJ initially held high hopes but has consistently underperformed in sales, trailing behind not only Tesla but also emerging players like NIO, Xpeng, and Li Auto. Breaking through this barrier has become a joint challenge for Chery and Huawei's HarmonyOS Intelligent Drive.

Produced by|Heyan Yueche Studio

Written by|Zhang Dachuan

Edited by|He Zi

The Path to ZEJ's Breakthrough

On August 7, Chery and Huawei renewed their partnership with a cooperation agreement for ZEJ brand strategy 2.0, marking the entry of ZEJ into a new development phase. Both parties committed to investing over RMB 10 billion and establishing a 5,000-person R&D team dedicated to ZEJ. They will also set up dual design centers in Shanghai and Shenzhen, and build an exclusive technology R&D and innovation base in Wuhu. In terms of governance, ZEJ will operate independently from Chery, led by Huawei with integrated production, sales, and service. Chery will withdraw from ZEJ's management, adhering to the principle of "holding shares without commanding."

△Chery and Huawei sign a cooperation agreement for ZEJ brand strategy 2.0

ZEJ's Quest for Self-Redemption

Data shows that from January to July 2025, ZEJ's cumulative sales amounted to only 48,901 units (including 42,100 units of the R7 and 4,503 units of the S7). In comparison, Tesla, ZEJ's main benchmark, achieved retail sales of 263,400 units in the Chinese market from January to June 2025. Adjustments by both shareholders were inevitable, and ZEJ's decision to operate independently from Chery's system is the outcome of deliberations by both Chery and Huawei.

△ZEJ S7 missed the best development opportunity due to various reasons

Chery and Huawei began discussing cooperation early on, aiming to create a premium brand. In September 2023, ZEJ Automobile was officially launched, followed by the debut of the ZEJ S7 in November of the same year.

Upon its market entry, ZEJ displayed strong momentum. Thanks to Huawei's full technological support, the S7 received over 5,000 large orders on its launch day, with order volume exceeding 20,000 within a month, positioning it as a strong competitor to Tesla's Model 3. Highlights included Huawei's "Whale" 800V high-voltage battery platform, Huawei iDVP intelligent digital platform, and Tuling platform. However, post-launch, the S7 faced challenges such as chip shortages, factory relocations, and conflicts between Chery and Huawei over project dominance and resource allocation due to the similar positioning of ZEJ and EXEED, preventing ZEJ from achieving its potential.

While Huawei has full control over the AITO brand's operations, Chery does not view Huawei merely as a supplier, leading to decision-making contradictions regarding ZEJ. Despite the S7's "second launch" and the introduction of the R7, which competes with the Model Y, fundamental contradictions remained unresolved, resulting in ZEJ's sales lagging far behind Tesla.

△ZEJ's sales lag far behind Tesla

Chery's Trust in ZEJ for Brand Ascension

Currently, Chery is aiming for an IPO, necessitating streamlined brand relationships and maximized synergies.

With ZEJ's independent operation, Chery's structural adjustment is nearly complete. Chery has established a domestic business group encompassing the previous QQ business unit, Aihu (Arrizo + Tiggo) business unit, Fengyun business unit, and the previously independent EXEED brand. Additionally, Chery only retains two brands, iCAR (jointly developed with Xiaomi) and Jetour, for independent operation. This indicates that Chery has chosen ZEJ over EXEED as its next premium brand.

△The EXEED brand will be integrated into Chery's domestic business group

Chery's choice is heavily influenced by the success of the Zenith brand. As a model with an average customer order value of RMB 1 million, the Zenith S800 sold over 6,500 units in its first month, achieving unprecedented success. Compared to JAC or ZEJ's lower positioning compared to Zenith, ZEJ appears to have a greater chance of success. However, reality has seen ZEJ's popularity wane, with only 3,268 units sold last month.

Given Huawei/HarmonyOS Intelligent Drive's ability to propel Zenith to great success, if Chery delegates power, ZEJ also has the potential to rebound. From Chery's perspective, rather than internal friction with HarmonyOS Intelligent Drive/Huawei, it is more beneficial to let Huawei lead, maximizing shareholder interests. Although Chery leads domestic auto groups in overall sales, a significant portion comes from the overseas market, and the brand ascension strategy has faced hurdles, exemplified by EXEED. In this context, focusing on ZEJ's dominance is not meaningful for Chery.

△Zenith's success has made Chery recognize HarmonyOS Intelligent Drive's capabilities in building and operating premium brands

Post-independence, ZEJ launched updated versions of the R7 and S7 models, featuring comprehensive hardware upgrades, Aurora Green paint, Roland Purple interior, and the debut of a condensed mother-of-pearl film in the cabin. The highlight is the integration of Huawei's most advanced ADS 4 intelligent driving system, positioning the vehicle at the industry's forefront in intelligent driving capabilities. According to ZEJ's official disclosures, the two models received over 10,000 orders within an hour, marking a successful initial battle. Additionally, sources indicate that the large SUV R9 and HarmonyOS Intelligent Drive's first MPV model will be launched soon. To facilitate this, Chery has even suspended EXEED's MPV project to boost ZEJ's sales.

△After independent operation, ZEJ launched updated versions of the R7 and S7 models, receiving over 10,000 orders within an hour

HarmonyOS Intelligent Drive's Trajectory

For HarmonyOS Intelligent Drive, the key to breaking through lies in ZEJ. HarmonyOS Intelligent Drive's total sales for the first seven months of 2025 were 251,381 units, representing a year-on-year increase of 5.5%. This growth rate is unremarkable in the current domestic auto market. Taking July as an example, EnjoyAITO exceeded expectations with 4,154 units sold, while AITO delivered a cumulative total of 40,753 units across its entire lineup. Significantly increasing terminal sales in the short term is challenging. Therefore, for HarmonyOS Intelligent Drive, to continuously increase its market share, the focus of breaking through lies in ZEJ.

△ZEJ has become the focus that HarmonyOS Intelligent Drive urgently needs to break through

Fortunately, Chery recognizes this. As publicly stated by Yin Tongyue, Chairman of Chery Holdings, "In our cooperation with Huawei, we've had our disagreements, but we found that when we listen to Huawei, things go smoothly; when we don't, we encounter setbacks."

It's worth noting that in addition to AITO, HarmonyOS Intelligent Drive is reforming the sales channels of the other three brands. That is, shifting from the previous "four-brand megastore" model of Huawei HarmonyOS Intelligent Drive stores to separate sales channels for each brand. Specifically, BAIC, JAC, Chery, and SAIC will respectively establish sales channels for EnjoyAITO, Zenith, ZEJ, and Shangjie. This approach has achieved success with the AITO brand, helping different brands better define their positioning and provide more targeted services to users, crucial for long-term brand development. For ZEJ, which has just separated from Chery's system, this opportunity allows it to reorganize its sales network, laying a solid foundation for future new vehicle launches.

Commentary

ZEJ's separation from Chery's system and the full delegation of decision-making power to Huawei is a strategic move. For Chery, ceding some power to achieve a win-win situation is preferable to entangling in disputes over dominance. From HarmonyOS Intelligent Drive's perspective, in addition to the two newly launched ZEJ models, three new models will be released this September: the all-new AITO M7, EnjoyAITO S9T, and Shangjie H5, ushering in a new wave of product launches. Especially with the smooth relationship between ZEJ and Huawei, its development is even more promising.

(This article is originally created by "Heyan Yueche" and cannot be reproduced without authorization)