Launching the ADP Platform: Audi and SAIC Reach a Landmark Milestone

May 20 is the perfect day to confess your feelings and show off your love. But a successful confession always stems from mutual affection and happens naturally, without forcing it. Keeping this principle in mind, Audi and SAIC announced on that very day their decision to deepen their collaboration—seemingly a match made in heaven. On this occasion, SAIC Audi unveiled its Advanced Digitized Platform (ADP) under the theme "Beauty Shared, Together Ushering in a New Chapter." This groundbreaking platform will serve as the foundation for several new, intelligent electric vehicles jointly developed by Audi and SAIC.

SAS Audi has struggled with sales challenges since its establishment three years ago. However, last December, the company achieved a historic milestone by surpassing 7,000 units in monthly sales. Both parties have mutually recognized that Audi and SAIC must invest more strategic resources into their long-term partnership. The official announcement of "deepening cooperation" came in July last year, when the two sides formally signed their collaboration agreement. Now, 10 months later, they are finally ready to unveil significant progress in their partnership. On that day, neither company disclosed the technical details of the ADP platform. Yet, during the press conference, Audi announced that Volkswagen executive Fermín Soneira would take on the role of CEO for this groundbreaking project—a personnel decision that stands out as highly unusual.

For product line and technology line projects, a single CEO position is rarely appointed. While large groups may appoint multiple business CEOs, this position is typically reserved for BUs (independent business units) or BGs (business groups). This suggests that SAIC Audi considers this project a core business, potentially even leading all future product lines. This makes it logical for Song Feiming, who has served Volkswagen for 25 years, to take the reins.

Another important factor is that this project involves collaboration between three teams: Audi, SAIC, and SAIC Volkswagen. A senior executive with a role beyond the departmental level is crucial for leadership and coordination. From this perspective, the appointment of a CEO is also reasonable. Within this "super-organizational" structure, speed is paramount. By adopting an efficient, flat organizational structure (with the CEO directly liaising with the project department), digital development tools, and an IT-based project development approach, SAIC Volkswagen has reduced its project development cycle from 36 months to 24 months. However, for SAIC Audi's "Project Number One," this pace should be further increased. Speed ​​and efficiency will be led by the localized SAIC Volkswagen, while Song Feiming's task is to ensure that Audi's DNA is not lost. SAIC Volkswagen General Manager Jia Jianxu stated, "Audi is Audi... He (Song Feiming) has veto power in the project." This also means that the new energy vehicles launched in China by Audi, in partnership with SAIC, will still be imbued with Audi DNA, and the prices should be as expected.

In fact, the two parties are jointly developing new products based on a new-generation digital platform, and previously planned to launch the platform by 2026. Now, "platform launch" is no longer a milestone, and the first new product based on the ADP platform is scheduled to launch in 2025, significantly advancing the schedule. In the current industry context of rapid development of intelligent driving and E-E architecture digitalization, Audi has no chance of seizing the initiative. However, if it can initiate at a certain point in time and instantly reach or even surpass the industry's current forefront, it will regain the initiative in product lines and technological capabilities, and ultimately, in brand development. SAIC's ZeroBeam Technology team is reportedly playing a key role in the development of the ADP platform. Despite the rapid development pace, SAIC Audi is not using ZeroBeam Technology's off-the-shelf products. Previously, several production vehicles from Zhiji and Feifan were equipped with the full-stack 1.0 "ZeroBeam Galaxy" technology. The electric vehicles jointly developed by Audi and SAIC will feature the full-stack 3.0 technology, claiming to centralize computing power across the four domains of "cabin, driving, computing, and connectivity."

Neither Song Feiming nor Zerobeam Technology CEO Li Jun disclosed details of the ADP platform. While Jia Jianxu did offer descriptions like "digital mobility companion," these haven't yet shed much light on the platform's broader understanding. It's possible that the platform doesn't completely centralize computing power, minimizing and consolidating MCU and ECU modules as much as possible, but not completely eliminating them. This suggests similarities to Huawei's solutions, but significant differences from the thinking of startups like Leapmotor.

This speculation is justified by the fact that full-stack 3.0 technology offers good integration with 1.0 and 2.0 technologies, ensuring shorter engineering cycles and system design reliability. This explains the strong confidence expressed by SAIC and Audi executives. The current joint venture framework has evolved from a purely technology-exporting role to one characterized by mutual licensing and joint development, with each party maintaining a more balanced role. Audi is responsible for overall product design, chassis, and other mechanical aspects, while SAIC is responsible for the E-E architecture and integrated hardware and software solutions. While the latter's product strength is increasingly prominent, Audi still controls the product tone and style, so it's hard to say which role holds greater weight. Multinational brands lack a technological advantage in electric vehicles in China, and the series of electrified and intelligent products derived from the ADP platform are clearly expected to turn around their business situation. For this reason, Audi and SAIC attached great importance to this press conference, with all relevant executives in attendance.

From a global operations perspective, Audi's revenue and profits are not on the same level as those of Mercedes-Benz and BMW. Audi's deliveries in China in 2023 will not lag far behind those of Mercedes-Benz and BMW. Audi's pricing structure is significantly higher than those of either company. However, Audi's China business accounts for the largest share of its respective portfolio, indicating that the Chinese market is more important to Audi. At this time, Audi has internal motivation to invest more heavily in the Chinese market.

Audi's two Chinese partners, FAW and SAIC, have a complex and delicate relationship. FAW-Audi boasts a long history, a comprehensive product line, and a user base and market reputation that cannot be matched by SAIC-Audi. The official announcement of new platforms and product lines raises questions about whether direct competition will arise between the two companies, citing FAW-Audi's PPE platform and its first product (the Q6 e-tron) due for delivery by the end of the year. This is something SAIC-Audi must consider. Jia Jianxu did not directly address this question. Instead, he used the theme of the event, "Harmony and Coexistence," to illustrate the coexistence and unique strengths of Audi's multiple platforms and product lines. These statements aren't entirely empty talk. He also mentioned terms like "staggered positioning" and "differentiation," hinting at the higher-end nature of the ADP platform's products. The definition of "high-end" is largely defined by elements like digitalization and intelligent connectivity, leaving room for imagination as to how these new value elements will integrate with the Audi brand's overall tone.

Audi has consistently pursued a dual-track strategy in China, improving its dual-partnership system. This approach aligns with Volkswagen's approach. However, SAIC Audi arrived too late, failing to capitalize on the rapid growth of the Chinese auto market, leading to initial struggles in brand development. This deepening of strategic cooperation aims to address shortcomings in Audi's China business. With existing technological capabilities, Audi hopes the Chinese side will expand its business. SAIC Group urgently needs to explore new growth areas and has ample incentive to strengthen its joint venture with Audi. After all, as a first-tier or near-first-tier luxury brand, Audi is an integral part of SAIC Group's brand identity. May 20th may mark a transition in the Audi-SAIC partnership, from principled mutual trust and win-win cooperation to a higher level of close strategic collaboration. However, subsequent implementation efforts, such as channel development, may still be a difficult communication process.

Reprinted from Sina Auto

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