In February 2025, the automotive world was shaken by a significant announcement from BAIC Blue Valley, revealing plans to invest 5.532 billion yuan (approximately $850 million) in upgrading and developing three new models under its Xiangjie brandThis ambitious initiative spans extended-range variants, a travel edition, and a B+ class SUV, marking BAIC Blue Valley's largest strategic investment in recent years and deepening its collaboration with tech giant HuaweiBut can this powerful partnership disrupt the established premium smart electric vehicle market? The answer might be hidden in their meticulously devised strategies.

This hefty 5.532 billion yuan investment is not merely a bailout; it represents a long-planned assault on the marketThe announcement outlined that the three sub-projects are at various stages of development: the first has entered a mature production phase while the others remain in engineering development, expected to materialize within the next 9 to 16 monthsSpeculation based on market insights suggests that this upgrade will introduce the extended-range version of the Xiangjie S9, a travel version, and a new SUV model, effectively creating a product matrix of “sedan + SUV + extended-range” vehiclesThis move aims to fill the gaps left by the previous focus on solely electric models.

This strategic positioning zeroes in on a critical industry issue: while the premium electric vehicle market is experiencing rapid growth, consumers are increasingly burdened by range anxiety and diversified needs for adaptable driving scenariosFor instance, the Xiangjie S9 has enjoyed remarkable success with a price range of 399,800 to 449,800 yuan, consistently leading sales among electric sedans priced above 400,000 yuan for six consecutive months

Advertisements

However, facing competition from hybrid models like the Denza Z9, it needs to leverage extended-range technology to broaden its customer baseEssentially, the 5.532 billion yuan investment aims to extend Huawei’s technological capabilities beyond a single blockbuster product to an entire product line, employing a ‘combined force’ approach to conquer market share.

The partnership between Huawei and BAIC has already evolved beyond a traditional supplier relationshipIn 2023, their collaboration advanced from the AITO’s Huawei Inside (HI model) to the more integrated Smart Selection Car model, with Huawei deeply involved in product design, intelligent system development, and the entire marketing chainThe creation of the Xiangjie S9 exemplifies this model, featuring Huawei’s ADS 3.0 advanced driving system, HarmonyOS 4.0 smart cockpit, and the world’s first 192-line laser radarMoreover, its smart parking technology allows for “exit and drive” functionalities, showcasing a user-friendly interface.

A recent noteworthy development includes Huawei transferring the “STELATO” (Xiangjie) series trademarks entirely to BAIC New EnergyThis not only enhances BAIC’s control over its brand but also hints that both parties are entering a new phase of “technology sharing + brand co-management.” Huawei’s Executive Director Yu Chengdong has explicitly stated that the Xiangjie S9 aims to “redefine executive luxury,” setting it as a competitor to the likes of the Mercedes S-Class and BMW 7 SeriesBehind this ambition is Huawei’s goal of establishing an ecosystem termed “Harmony Intelligent Travel,” showcasing a portfolio that covers everything from family SUVs to ultra-luxury MPVs, addressing all scenario-based needs.

The alliance between BAIC and Huawei is directly targeting the luxury segment, traditionally dominated by German brands such as Mercedes, BMW, and Audi (collectively referred to as BBA). Data projections indicate that in 2024, the market for new energy vehicles priced over 400,000 yuan in China will grow by over 60%, yet German brands still command a substantial 70% of the market share

Advertisements

The breakout strategy of the Xiangjie S9 is decidedly clear: it seeks to disrupt the market through unique intelligent experiencesFor example, the vehicle’s DATS dynamic adaptive torque system can instantaneously adjust motor output, offering a balance of control and comfortWith a 100kWh CATL ultra-thin battery integrated with an 800V high-voltage platform, it can replenish enough energy for 200 kilometers within a mere five minutes, aiming to eradicate user concerns over range.

Furthermore, the collaborative ecosystem represents a critical assetBAIC Blue Valley’s partnership with NIO Energy to create a robust charging network, alongside plans for extended-range versions, aims to construct a comprehensive travel solution that encompasses “pure electric + extended range + charging.” This dual approach of “technology + infrastructure” could potentially dismantle preconceptions that high-end electric vehicles lack practicality.

The 5.532 billion yuan partnership between BAIC and Huawei introduces a new paradigm for Chinese automotive manufacturers transitioning to intelligenceTypically, engagements between traditional automakers and tech giants sway towards “soul debates.” However, both parties have effectively restructured their roles under the Smart Selection Car model: BAIC focuses on leveraging its manufacturing and supply chain strengths while Huawei zeroes in on providing smart technological solutions, with partners like CATL supporting core electric componentsThis division of labor, embracing “specialists for specialized tasks,” may prove to be more efficient than individual endeavors by automakers.

It is essential to acknowledge the inherent risks in this collaboration

Advertisements

Advertisements

Advertisements