DJI and Huawei, giants in their respective fields, have many similarities. They were both based in Shenzhen and neither has any plans to go public at this time.
The only difference is that they are big players in different sectors: one in global communications equipment (Huawei), and the other in commercial unmanned aerial vehicles, or drones (DJI).
The two companies recently made the decision to enter the automotive industry as all-in-one hardware and software solution providers to help automakers build better and smarter models.
Their foray into the automotive market
Some time ago, SAIC-GM-Wuling Automobile announced the results of its collaboration with DJI, with the official release of the Lingxi Intelligent Driving System. The system is said to be capable of “carrying out any type of obstacle identification and response”.
However, unlike nearly every manufacturer on the market, DJI’s system-equipped Wuling model doesn’t use LiDAR (light detection and ranging) sensing hardware or even a high-computing automated driving chip. Instead, DJI capitalized on the algorithms they had developed in their UAV technology to build their smart driving feature for small vehicles, allowing them to offer a competitive price of 100,000 RMB (14,000 USD) per vehicle.
In contrast, vehicles equipped with Huawei technology, such as BAIC Arcfox, Changan Avatar and Great Wall Saloon, are all high-end models priced between 300,000-400,000 RMB (42,000-56 000 USD). Although offered at a significantly higher price, these models have the assurance of a solid hardware base, such as LiDAR, for their high-level assisted driving functions.
In this way, DJI and Huawei have adopted two different methods: the first relies on a good performance/cost ratio, while the second increases the value by offering robust features.
Motivations for entering the industry
The motivations of Huawei and DJI for venturing into the automotive industry are nearly identical.
Huawei’s smartphone business took a hit in 2020 due to US sanctions. Statistics from International Data Corporation, a global market intelligence firm, show Huawei’s global cellphone shipments in 2020 totaled 189 million units, down 21.5% year-on-year. the other. As a result, Huawei’s consumer business revenue in 2020 was RMB 482.9 billion ($67.6 billion), only a slight 3.3% year-on-year increase. on the other.
DJI’s story is similar. Although its global market share in the consumer drone market was large, it was shrinking due to tightening industry controls and flight bans, and the company’s revenue growth slowed. Data shows that DJI’s revenue and net profit grew by single digits in 2018 and 2019, and the company did not achieve a year-on-year revenue growth rate of 30 % and a net profit growth rate of 33% through 2020.
For these two companies, the smart car industry presents an attractive prospect, as it is still in the early stages of development and has a bright future. According to the 2022 China Intelligent Vehicle Development Trends Report, by 2025, the sales volume of L2-level and above intelligent vehicles in China is expected to exceed 10 million units, which is a penetration rate intelligent vehicles by 49.3%. The market size of smart cockpits is expected to exceed RMB 100 billion (USD 14 billion), making it a promising market.
Areas of competition
When splitting the smart vehicle market, the two companies chose different paths. Huawei started from the high-end sector, while DJI took the profitable route.
This has resulted in different types of collaborations and results from the automakers they have partnered with.
Those who choose to partner with Huawei tend to produce higher-end models with higher prices. For example, Great Wall Motor, a brand where the average price of a car used to be 80,000 RMB (11,200 USD) per unit, has launched a high-end model, Saloon, at a price of up to 488,000 RMB ( US$688,300). The Saloon model relies on Huawei’s LiDAR detection hardware and computing platform to support its intelligent functions.
Another example is Changan, which typically sells cars at an average price of 100,000 RMB ($14,000) a unit, which launched the high-end Avatar line in collaboration with Huawei. The limited-edition model of Avatar costs 600,000 RMB (84,000 USD).
On the other hand, most brands in collaboration with DJI produce intermediate and entry-level models aimed at the general public. For example, the XPeng P5, which is equipped with two LiDAR HAPs from DJI subsidiary Livox, is priced at 209,900 RMB (29,400 USD). The second DJI-equipped model is Wuling’s Baojun KiWi EV, priced at 102,800 RMB ($14,000).
The influence of their current positions
The difference between the ways in which companies enter the automotive industry is linked to their current positioning in their own sectors. Huawei has always positioned itself as a premium manufacturer, with the Huawei Mate series and P series considered flagships in the smartphone industry. Its Huawei Smart Home solution also far exceeds other players in the industry in terms of price, which can reach 99,999 RMB (14,000 USD).
In contrast, DJI’s approach to the drone market has always centered on aerial photography performance, quality, economic performance, and ease of use. The company launched its Phantom series in late 2012 in a market where drones were often very expensive, focusing on making drones available to as many people as possible.
Essentially, Huawei’s approach is to drive value by piling technology and functionality into its products, while DJI’s approach is to deliver cost-effectiveness by using algorithms to compensate for the limitations of its hardware.
Will this cost-effective method work for DJI outside of the drone industry? It’s hard to say for sure, as performance and reliability are often higher priorities in the automotive industry.
DJI subsidiary Livox is able to produce systems at lower cost through the use of a dual-corner prism scanner in its LiDAR system, which has fewer components. However, the trade-off is the lack of real-time information, as the system is slower. Such a system would work in static scenarios such as terrain mapping and security assurance.
However, intelligent driving systems are often placed in much more complex and dynamic scenarios, moving at high speeds and dealing with constantly changing road conditions. These require a much faster response time and higher sensitivity from their sensors, which DJI’s Dual Corner Prism Scanner may not have.
After experiencing setbacks with its LiDAR business, DJI pivoted and began selling all-in-one solutions, continuing on the path of profitable performance. The company currently provides all-in-one software and hardware intelligent driving products, including D80, D80+, D130 and D130+, among which D80 and D130 are mainly L2 level basic auxiliary driving functions and include ACC ( adaptive cruise control), auto-follow, auto-park and other functions. D80+ and D130+ are more advanced versions.
These solutions have also been integrated into the vehicles of its partners, such as the KiWi EV 2023 model designed in collaboration with Wuling, which has a D80 system. This means that the KiWi EV model can only perform assisted driving at speeds below 80 km/h, and this function mainly covers urban areas and highways. As one of the simplest products in DJI’s lineup, the D80 does not use LiDAR or high-precision cards, and the computing power of the whole system is only 16 TOPS ( trillion operations per second).
For comparison, the Arcfox Alpha-S HI, made in collaboration with Huawei, uses the Huawei MDC (Mobile Data Center) intelligent driving computing platform, which has a computing power of 400 TOPS and contains two Nvidia chips. Orin X.
This system is also used in Changan’s Avatar 11, Great Wall’s Saloon, the Li Auto L9, the XPeng G9 and the SAIC Feifan R7.
From a technical perspective, DJI’s approach has the advantages of low cost and high scalability. The company has directly transplanted its UAV technology into its intelligent vehicle systems. This technology is based on binocular vision and point cloud algorithms and is used to obtain geometric information, including depth information, to determine whether obstacles ahead will threaten driving safety and thereby eliminate reliance on LiDAR .
However, this results in limited perception and computing power. DJI’s systems, when encountering scenarios they cannot handle, will return control to the driver, a situation that can be dangerous, especially if the driver is distracted or assumes the system can handle the obstacle automatically. An example of this is the lack of high-precision mapping in the Lingxi intelligent driving system, which forces the driver to take over at misplaced intersections and roadworks.
At the other end of the spectrum, Huawei has introduced a comprehensive support system on the Arcfox Alpha-S HI version, covering sensing, decision making, steering, braking and power. The inclusion of such a system comes with a price to match, but that means it’s powerful enough to help the vehicle stop in extreme circumstances and cope with a much wider range of scenarios. .
Both companies still have some way to go in development. DJI’s product vision may need to be adjusted if it wants to compete with other smart vehicle systems. Huawei, while having the advantage of having mass-produced and installed its powerful hardware, still has some improvements to make for its software updates.
Regardless of how the two companies adjust their trajectory in the automotive industry, user experience and system reliability are critical to success. In the competition for automaker orders, who emerges victorious will depend on how they adapt over the next crucial years.
This article has been adapted from a characteristic originally written by Brother Yu and published on Box Rice Finance and Economics (WeChat ID: daxiongfan). KrASIA is authorized to translate, adapt and publish its content.