It's a sad tale for Horai Smart.

Intelligence is the future of the automotive industry, and autonomous driving has long been a cornerstone for automakers aiming to enhance their product competitiveness. However, some players in this field are still struggling to gain a firm footing.

According to 36Kr Auto, Horai Smart is currently experiencing significant turmoil at the executive level, with several middle and senior managers recently departing. Chairman Zhang Kai has also tendered his resignation, while key executives such as Technical Vice President Ai Rui and Product Vice President Cai Na left as early as April this year.

As per Qichacha's official website, at the time of writing, Zhang Kai remains the legal representative and chairman of Horai Smart Technology Co., Ltd.

Screenshot: Qichacha official website

Founded in 2019, Horai Smart was actually spun off from Great Wall Motors' Technology Center's Advanced Driving Assistance System (ADAS) Forward-looking Division. Baoding Great Wall Holding Group Co., Ltd. is the largest shareholder of Great Wall Motors, with Wei Jianjun, the chairman of Great Wall Motors, serving as the actual controller and beneficial owner of Horai Smart.

Theoretically, Great Wall Motors could leverage Horai Smart to capture the intelligent market at a lower cost, while Horai Smart could rely on Great Wall Motors for more orders. This seemed like a win-win situation, but why is Horai Smart now mired in a whirlwind of negative public opinion?

The answer may lie in its products.

Why is Horai Smart no longer valued by Great Wall Motors?

Great Wall Motors' decision to spin off its internal ADAS business was undoubtedly forward-thinking.

Two years after Horai Smart's inception, Great Wall Motors announced its "331 Strategy" for the Coffee Intelligence Driving System, aiming to achieve China's first full-vehicle redundant L3-level autonomous driving capability, the country's first autonomous driving system equipped with LiDAR, and autonomous driving with NOH capability by 2021. It also stated that all models across its five sub-brands would be equipped with Horai Smart's intelligent driving solutions.

Source: Great Wall Motors official website

At that time, Great Wall Motors, with its unique product naming and the high popularity of its tank models, was enjoying both high traffic and sales. From an external perspective, it had the potential to elevate Horai Smart to greater heights.

In late 2021, Horai Smart received nearly RMB 1 billion in Series A funding. Zhang Kai boldly predicted at the time that the total number of passenger vehicles equipped with Horai Smart's assisted driving system would exceed 1 million in the next three years. In September 2022, Zhang Kai stated at Horai Smart's brand day that "Horai Smart was responsible for the development of high-level assisted driving for 34 upcoming models of Great Wall Motors in 2022".

Screenshot: Horai Smart official website

At this juncture, Horai Smart had the money, resources, and orders. However, by April 2024, there was still no progress on Horai Smart's City NOH, prompting Great Wall Motors to introduce Yuanrong Qixing into its supply chain, primarily to provide "end-to-end" intelligent driving technology solutions. The ADAS technology solutions for the all-new Blue Mountain and all-new Alpine models are sourced from Yuanrong Qixing.

In just two years, Horai Smart transitioned from a promising startup to being sidelined, a shift directly linked to its technical prowess.

In 2024, Horai Smart launched three affordable ADAS products: HP170, HP370, and HP570, which offer high cost-effectiveness. The official stated that the HP570, priced at the RMB 8,000 level, is a City NOH product without maps that will be rolled out in over 100 cities in the future.

However, Dianchetong learned that the maximum computing power of HP570 is 100TOPS.

Source: Great Wall Motors official website

According to a research report by Gaogong Intelligent Auto, mid-range computing platforms with computing power between 20-200TOPS can support enhanced high-speed NOA. Refining high-speed NOA to be user-friendly can add value to urban commuting NOA, but better support for urban NOA requires computing power exceeding 200TOPS.

Dianchetong will not comment on the user-friendliness of Horai Smart's ADAS. However, given the close relationship between Great Wall Motors and Horai Smart, but Great Wall Motors' choice not to use its own products, it can be inferred that Great Wall Motors urgently needs a breakthrough in intelligence and is therefore more inclined to choose suppliers with stronger technical capabilities.

By the way, the ADAS systems of the WEY brand's all-new Blue Mountain and all-new Alpine models are equipped with the NVIDIA Orin-X ADAS chip, which boasts a computing power of 254TOPS, finally bringing end-to-end intelligent driving technology to mass production. Emphasizing cost-effectiveness but failing to reach the top tier in computing power is presumably the root cause of Horai Smart being "shelved" by Great Wall Motors.

Did Horai Smart succeed because of Great Wall Motors and fail because of Great Wall Motors?

In 2024, the domestic intelligent driving sector initiated a technological competition in mapless urban intelligent driving and point-to-point autonomous driving. Huawei, Li Auto, XPeng, and NIO are all ready, and traditional brands such as SAIC and GAC have also announced deadlines for mass production of mapless urban NOA.

Great Wall Motors is undoubtedly anxious, which is why it has set aside its obsession with closed ecosystems and chosen to partner with Yuanrong Qixing. However, focusing on Great Wall Motors, it has also significantly impacted Horai Smart.

New energy vehicles are the best carriers for ADAS, but Great Wall Motors' new energy vehicle sales have consistently lagged behind the overall market. Data shows that Great Wall Motors sold 103,000 and 261,500 new energy vehicles in 2022 and 2023, accounting for 9.7% and 20.8% of total sales, respectively, which is far lower than the new energy penetration rates of 25.6% and 31.6% in the same years.

Source: Great Wall Motors official website

According to official data, sales of models equipped with Coffee Intelligence exceeded 200,000 units in 2022, with user-assisted driving mileage exceeding 25 million kilometers. Among them, WEY models equipped with Horai Smart's intelligent driving solutions sold only 36,400 units throughout the year. For comparison, in 2022, Li Auto and NIO reported cumulative intelligent driving mileage of 140 million and 160 million kilometers, respectively, while XPeng surpassed 100 million kilometers in 2023.

In other words, Great Wall Motors was relatively slow in transitioning to new energy at that time, and its ADAS system did not gain much recognition, making it difficult for Horai Smart's ADAS to accumulate more valuable data.

Furthermore, Horai Smart is deeply tied to Great Wall Motors. When Dianchetong visited Horai Smart's official website, it found that all technical displays prominently featured Great Wall Motors, almost making one think they had mistakenly entered the introduction page for Great Wall Motors' intelligent driving.

Source: Great Wall Motors official website

This tie-up may alleviate concerns about order issues for the brand but significantly limits Horai Smart's market expansion vision. Other automakers may worry about data security when considering Horai Smart as a supplier.

So far, Dianchetong has not found any news of other automakers cooperating with Horai Smart.

The departure of multiple senior executives indicates, to some extent, that these leaders are not optimistic about the company's prospects. Currently, Horai Smart is struggling to shake off its dependence on Great Wall Motors on one hand and to obtain order support from other automakers on the other, placing it in an especially awkward position.

The worst outcome for Horai Smart: returning to the Great Wall Motors parent company?

Currently, Horai Smart's main business is to provide Great Wall Motors with two relatively traditional ADAS technologies: high-speed mapless NOA and memory-based driving and parking functions. Its product advantage remains cost-effectiveness.

However, Horai Smart faces the challenge of an increasing number of cost-effective ADAS systems. BYD and Chery have already lowered the purchase threshold for ADAS systems to below RMB 100,000. If Great Wall Motors continues to use Horai Smart's technical solutions, it is likely to demand further cost reductions.

Based on the latest sales data for May, Great Wall Motors' more popular SUV models in the mainstream market segments are Haval Big Dog, Haval Owl Dragon MAX, and Haval H6, with sales of around 8,000 units in May. However, the fundamental reason for their popularity is the tens of thousands of yuan in concessions offered in the terminal market, and their selling points have little to do with ADAS.

Source: Great Wall Motors official website

Under the strategy of "trading price for volume," Great Wall Motors does not have enough resources to support Horai Smart in implementing cost reduction measures, which also makes it difficult for Great Wall Motors' ADAS technology to stand out in the competition in the mainstream market segments.

According to the 21st Century Business Herald, Wei Jianjun halted Horai Smart's Hong Kong IPO plan in October last year, but Zhang Kai responded that the news was untrue and expected to regroup in 2025.

However, given the current personnel turmoil at Horai Smart, it is questionable whether it has the energy and financial resources to prepare for an IPO.

With Great Wall Motors abandoning the high-end field and Horai Smart having limited resources from other automakers, its prospects are indeed constrained. At this stage, many automakers are trying to integrate resources and focus their efforts in one direction. It is not impossible that Great Wall Motors might follow the path of Chery and merge its subsidiary intelligent driving company, Dazhuo Intelligence, into the group's research institute.

For Horai Smart, returning to Great Wall Motors should be considered the worst outcome, but it is not a terrible one either, considering that Great Wall Motors' current high-end development is still progressing steadily.

(Cover image source: Great Wall Motors official website)

Great Wall Motors WEY Brand Intelligent Driving Horai Smart Assisted Driving

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