Chery Automobile has made a decisive strategic pivot in its intelligent-vehicle program, moving from an ambitious in-house development push to a full commercial embrace of Huawei-backed Yinwang Intelligent Technology for L3 and L4 autonomous driving. The two parties on June 11 signed a deepened cooperation agreement that ties Chery to Yinwang’s stack and sets mass‑production targets for high-level autonomous features during China’s 15th Five‑Year Plan period.
The public appearance of Chery chairman Yin Tongyue alongside Yinwang chairman Xu Zhijun underlined the significance of the deal: this is not a routine supplier contract but a group‑level commitment to rely on Yinwang’s technology at scale. The move reflects a broader internal retrenchment at Chery after its in‑house smart driving arm, Dazhuo Intelligent Technology, encountered a generational technology gap and organizational friction that limited its competitiveness against rapidly advancing market leaders.
Dazhuo, founded in February 2023 and initially led by ex‑Tesla/Xpeng engineer Gu Junli, pursued a pragmatic, cost‑focused route aimed at vision‑first, LiDAR‑free autonomy to serve Chery’s broad export and lower‑tier markets. That strategy produced deployable systems for some series and overseas combustion models, but it failed to keep pace with an industry shift since 2025 toward large end‑to‑end models and heavy‑asset approaches driven by supercomputing resources, vast high‑quality driving data sets, and top AI talent. The result: Dazhuo’s iteration speed and technical ceiling lagged behind rivals producing urban NOA and other higher‑level capabilities expected in premium new energy vehicles.
Organizationally, Chery’s smart driving efforts were fragmented. Parallel teams—Lion Tech on cockpits, Dazhuo on driving, and a central R&D institute running assorted projects—created silos and diluted resources. In late May 2025 Chery consolidated these units into a unified Chery Intelligent Center; Gu’s departure and the arrival of new executives signaled a phased end to the earlier “substitute‑level” in‑house strategy. Financial logic also favored retrenchment: Chery’s strong 2025 performance (annual sales above 2.8 million units and exports near 1.35 million) means the company, practiced in tight cost control and manufacturing scale, faces high risk in committing tens of billions of yuan annually to an uncertain smart‑driving arms race.
A practical catalyst for the new alignment was the success of Luxeed, Chery’s model co‑developed with Huawei. After early production scaling, Luxeed achieved consecutive months of 10,000+ deliveries by late 2025, validating a “Chery chassis plus Huawei full‑stack intelligence” model. That success accelerated integration: Huawei’s Qiankun ADS already appears on top trims of Jetour Zongheng G700 and is standard across the new FREELANDER joint venture with Jaguar Land Rover, demonstrating the partnership’s spread from a single branded line to group‑wide adoption.
But outsourcing the “soul” of smart driving creates a strategic dilemma. As Yinwang’s partner list grows—covering Changan Deepal, Avatr, Seres AITO, JAC, Dongfeng and more—automakers increasingly share similar sensor suites, planning/control algorithms and cockpit interactions. High‑level autonomy risks becoming commoditized infrastructure rather than a distinct selling point, forcing OEMs to find new ways to differentiate products built on a common intelligence layer.
Chery’s response is industrially pragmatic: concentrate strengths on manufacturing quality, cost efficiency and global channels, while leveraging Yinwang to close the gap on autonomous capability quickly. That stands in contrast to rivals attempting to “de‑Huawei.” Seres, for example, has pursued a multi‑supplier route for its AIVA brand—mixing ByteDance cockpit software, DeepRoute.ai driving stacks and CATL batteries—but recent financials show slim core margins and heavy reliance on non‑recurring gains and subsidies, highlighting the difficulty of assembling equivalent stacks without scale and competitive cost structures.
For Chery, the tradeoff is clear: avoid the expensive, high‑risk arms race of building a first‑tier autonomous stack from scratch and instead buy time and capability by partnering with Yinwang. The challenge ahead will be how Chery rebuilds product differentiation when the intelligence layer is shared across competitors. Executives appear to be betting that superior engineering, manufacturing scale and distribution can combine with Yinwang’s standard intelligence to secure market share as high‑level autonomy becomes mainstream.
As the window for adopters narrows and regulatory permissions evolve, Chery’s move positions it to compete quickly on autonomy while focusing internal resources on production and global expansion. The unresolved question is whether Chery can successfully graft distinctive brand and user‑experience “flesh” onto a standardized Yinwang chassis—an outcome that will determine whether this pragmatic pivot becomes a lasting strategic advantage or simply a defensive stopgap.
