In 2023, a significant transformation swept across the automotive industry, where once the focus was on straightforward price wars, manufacturers shifted towards enhancing vehicle features without increasing costsThis strategic pivot reflects a broader trend in the development of intelligent driving technologies, targeting vehicle models priced between 100,000 to 150,000 yuanMajor players like BYD and Changan have unveiled their ambitious plans to integrate smart driving capabilities in new car models, aiming to democratize intelligent driving features across more affordable vehicles.

The demand for advanced driver-assistance systems (ADAS) is rapidly growing as the industry sees a surge in intelligent driving adoptionInterestingly, over twenty firms within the automotive supply chain have partnered with DeepSeek — a leading provider of open-source large models — to advance the capabilities of automotive technologySuch collaborations signal a proactive approach towards leveraging artificial intelligence to enhance functionality and user experience.

As the auto industry moves into 2025, the competition surrounding intelligent vehicle capabilities escalates, particularly among major manufacturersFor instance, on February 9, Changan officially launched its smart strategy, “Beidou Tianshu 2.0.” This initiative indicates a commitment to discontinue the development of non-smart new products, with plans to introduce 35 new intelligent models over the next three yearsBy 2028, the goal is to achieve full scenario Level 4 autonomous driving capabilities, marking a pivotal shift towards a more saturated market of intelligent vehicles.

Hot on Changan’s heels, BYD held its strategic conference on February 10, unveiling its plan to upgrade 21 models to “intelligent driving versions.” Notably, every model priced above 100,000 yuan will come equipped with a smart driving system, and many models below this price point will also feature advanced capabilities

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Current statistics suggest that the penetration rate for entry-level L2 driving assistance systems in China has hit an impressive 52.44%, while advanced driving functions such as Navigation on Autopilot (NOA) remain underutilized at just 8.62%.

Despite the challenges, new entrants like XPeng Motors and Changan are actively striving to integrate high-level smart driving systems into their latest models, thus lowering barriers to accessThe launch of the XPeng MONA M03 at the end of August 2024 marked a turning point in this trendEquipped with a Qualcomm Snapdragon 8155 chip, the vehicle combines urban intelligent driving capabilities with a competitive price point of about 150,000 yuan, further stimulating the market.

At this juncture, the DeepSeek platform has triggered an exciting wave of AI integration into vehiclesNotable brands like Geely, Great Wall Motors, Leap Motor, and Chery have announced their intentions to merge their systems with DeepSeek, harnessing its robust natural language processing capabilities to elevate user interactions and service qualityThe industry’s perception is that deep collaborations with DeepSeek will expand into the smart driving space, enhancing the melding of multimodal data to tackle complex driving scenarios while simultaneously reducing training costs.

In efforts to boost the penetration rate of smart driving, the Ministry of Industry and Information Technology has emphasized a need for robust industry guidanceThey aim to strengthen quality standards and prevent detrimental internal competition among manufacturersThis shift marks a transition from aggressive pricing strategies to a consumption-friendly value-oriented approach.

Leap Motor aims to initiate pre-sales for its new intelligent driving model on March 10, featuring LiDAR technology with urban navigation capabilities, all priced under 150,000 yuanFurthermore, discussions sparked by BYD's statements on equitable access to intelligent driving have incited heated debates among industry leaders regarding the definition and scope of advanced smart driving functionalities.

Industry titans like Huawei's Yu Chengdong have echoed sentiments on social media, clarifying that there is a stark distinction between merely functional and genuinely advanced intelligent driving systems

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He argues that while lowering costs to make basic intelligent driving features accessible is commendable, conflating these entry-level systems with high-end functionalities is misleadingSimilarly, Great Wall Chairman Wei Jianjun emphasized that true intelligent driving technology significantly influences user experience and safety.

Despite BYD’s innovative approach, the company has yet to roll out advanced NOA capabilities for models priced below 200,000 yuan, unlike many of its competitors who have already achieved such functionalitiesHowever, BYD's efforts to bring high-speed NOA to vehicles below 200,000 yuan signal its commitment to expanding smart driving accessibility, positioning them as a key player in promoting overall industry adoption.

With smart driving metrics increasingly becoming a battleground, the competitive pressures within the automotive sector now reach suppliers as wellThe repercussions of this competition have been felt particularly in the domain of technology startupsFor instance, the once-prominent self-driving company, Zongmu Technology, has reportedly encountered operational suspension after failing to maintain financial viability, despite attracting significant investments amongst its peers.

Current trends indicate that the majority of leading players in the automotive sector are accelerating their in-house development of intelligent driving technologies, resulting in a considerable market squeeze for third-party technology providersIndustry experts caution that, as the wave of smart driving adoption accelerates, both automotive manufacturers and suppliers will face immense opportunities alongside significant risks, leading to what may resemble an elimination process within the technology sector.

In a landscape where cash flow remains a critical concern, many companies are resorting to public listings and diversifying their application scenarios to ensure survivalPreliminary reports suggest that in 2024 alone, over ten autonomous driving supply chain companies are pursuing initial public offerings

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