NIO on July 26 gave updates on some of its most important technological developments, including the world’s first five-nanometer chip for automated driving, its in-house developed operating system for vehicles, and a voice assistant powered by its large language model.

Why it matters: NIO’s fullest disclosure yet of its technological roadmap reflects how the Chinese electric vehicle maker spends its research and development money, and how it has made a strategic bet on artificial intelligence, hoping to redesign all aspects of its vehicles including self-driving and the so-called digital cockpit.

Details: Speaking at the firm’s annual Tech Day event in Shanghai, NIO founder and chief executive William Li unveiled new details of what he called the world’s first five-nanometer (5nm) processor for autonomous driving, said to offer cameras with top-notch image signal processing (ISP) functions.

• The Shenji NX9031 system on chip (SoC) delivers high pixel throughputs of 6.25 Gigapixels per second, which NIO said makes it capable of capturing pictures with higher quality resolution in minimally lit environments, compared with flagship offerings from leading chipmakers.
• Li confirmed that the company had completed the tape-out for its self-designed autonomous driving semiconductor, which marks the end of the design phase and the beginning of production, without revealing which company has been contracted to produce it. 
• Meanwhile, NIO is on track to release its advanced driver assistance system, the Navigate on Pilot Plus (NOP+) 2.0, in the second half of the year. The Shanghai-headquartered EV maker is one of the Chinese players looking to harness the power of AI to provide cars with point-to-point navigation on Chinese highways, city streets, and parking spaces in a race led by Tesla.
• NIO also announced the launch of its proprietary operating system, the Sky OS, with which the company said it would have central control of all vehicle domains, allowing it to provide more advanced user experiences. An alternative to the open-sourced Linux OS and Blackberry’s QNX, the Sky OS forms the basis of the entire car all the way from vehicle control through to intelligent driving and infotainment, NIO said.
• This will enable a NIO vehicle to have a used battery pack exchanged for a new one fully automatically at one of the company’s nationwide recharging facilities, allowing the user to leave the car to get a coffee, according to vice president Wang Qiyan.
• The Chinese EV maker will also release its Banyan 3.0 in-car user interface through over-the-air updates in late August, featuring an enhanced version of its NOMI conversational assistant, powered by generative AI large language models (LLMs), for more human-like voice interactions. NIO owners will be able to request a chauffeur to drive them via voice commands, the company said.

Context: Only a few global chip powerhouses, such as Qualcomm and Ambarella, have announced the production of their chips using a 5nm process node with manufacturing partners such as Samsung. Tesla reportedly plans to produce its next-generation full self-driving (FSD) computer on 4/5nm processes with TSMC.

• NIO previously implied that its sophisticated chip could handle more than 1,000 trillion operations per second (TOPS), comparable to the combined total of four NVIDIA DRIVE Orin chips on 7nm, and is scheduled for mass delivery with the company’s ET9 executive sedan in early 2025.
• NIO’s research and development expenditures grew 23.9% annually to RMB 13.4 billion ($1.89 billion) last year. CEO Li told the event that the company has more than 11,000 R&D personnel, adding that its years-long efforts on in-house chip development will be “of great significance” to the industry of self-driving cars (our translation).

READ MORE: Chinese EV makers Nio, Xpeng, and Li Auto expand bets on self-produced chips: report

Chinese electric vehicle maker Zeekr on July 19 introduced a new iteration of its 009 multi-purpose vehicle (MPV), including a new variant that significantly lowers the starting price of the luxury minivan and aims to capture a growing customer base of affluent Chinese families.

The refreshed 009 is the latest example of how Chinese automakers are attempting to build their luxury credentials and change the perception of premium cars both domestically and globally. The Geely-affiliated company expects to set “a new benchmark” for MPVs after the Toyota Alphard, it said. The revamped 009 boasts improved performance and range, as well as a number of intriguing features with Chinese characteristics, such as a series of in-car guided meditations.

“Chinese middle- to upper-class customers are replacing their large SUVs [sports utility vehicles] with MPVs that are becoming easier to maneuver and steer,” Jason Lin, a Zeekr vice president, said in an interview with TechNode (our translation). Like peers Xpeng Motors and Li Auto, New York-listed Zeekr sees big growth potential for the booming segment thanks to innovations in vehicle capabilities.

China’s MPV sales grew 16% to roughly 1.09 million last year and accounted for 5% of total passenger car sales, figures from the China Passenger Car Association (CPCA) showed. Jefferies forecast the segment to grow 20% year-on-year to 1.3 million units this year, of which 32% could be electric, up by 10% from last year. The Zeekr 009 competes with other all-electrics including the Xpeng X9 and Li Auto’s Mega, more popular plug-in hybrid models such as the Denza D9, and the gas-powered Toyota Alphard and General Motors’ GL8 Century.

An expanded lineup

The redesigned 009 comes to market with more variants in the hope of meeting a diverse range of customer needs, as both six- and seven-seat configurations are now available in different drivetrain and battery options with a price range of RMB 439,000-469,000 ($60,363-$64,488). The six-seat, dual-motor versions help to distance the revamped 009 from its predecessors, offering the fastest acceleration to 100km/h (62 mph) among MPVs – in 3.9 seconds – and a charging speed from 10% to 80% in as little as 11.5 minutes, making it suited for business travel.

And yet, Zeekr expects the new single-motor, seven-seat variants, with a center aisle to facilitate easy entry and exit from the van’s rear, to extend its reach to cover wealthy Chinese families, especially multi-generational households, at a more affordable price tag. Around 55% of existing 009 sales come from business clients, although private owners could ultimately provide a larger market, according to Lin.

While CATL’s Qilin battery enables the same charging speed as the higher-end variants, the new entry-level 009 has a longer driving range of 740 kilometers (460 miles) between charges. That range could be further improved to 900 km with a larger battery pack to ease consumer anxiety over charging infrastructure at an additional cost of RMB 50,000, although it takes 30 minutes for the battery to charge from 10% to 80%. It has a slower sprint time of 0 to 100 km/h in 7.9 seconds compared with its siblings, but is still comparable to the Toyota Alphard, which costs RMB 890,000 in China.

Chinese-oriented features

Although the remodeled Zeekr 009 claims to present a prestigious option for Chinese families using a range of high-quality interior materials and top-notch components, the company is also pushing hard to offer customized features with local characteristics to differentiate its vehicles from competitors. For instance, it offers a special chill mode with the car’s seats, lights, and music tailored to create an in-car environment for guided meditation, allowing owners to take a basic course with a series of video classes.

Other special modes include “Baby Sleeping”, for when younger family members take a nap, which automatically adjusts the air-conditioning and lights and turns down the volume of voice prompts. Some of the more traditional, upscale features that come standard with the car are air suspension that eliminates bumps for superior handling and ride quality, as well as Qualcomm’s latest-gen Snapdragon 8295 chips that enable the infotainment system with silky smooth transitions and fast responsiveness.

The all-new 009, set to be delivered on Monday, comes less than two years after the initial launch of Zeekr’s second model and follows an update in January, when two 2024 versions went on sale at a starting price of RMB 500,000. Zeekr is also selling the right-hand drive version of the luxury van in Hong Kong at HK$ 755,000 ($96,716) and aiming for delivery in the city in the fourth quarter of this year. The company launched a special Grand edition, targeting competition with the Rolls-Royce Cullinan in April.

Autotech startup Nullmax said on Tuesday that its latest generation of autonomous driving hardware and software package, allowing cars to navigate complex urban environments autonomously with features such as lane changing, will cost users as little as “several thousand RMB.” 

Why it matters: Shanghai and Fremont-based Nullmax is among the few players in the self-driving vehicle space claiming that cars will be able to function by themselves in urban scenarios without maps and lidar. Instead, the company said artificial intelligence models can be used to enable cars to navigate from points A to B.

• This makes its system even more cost-competitive on the Chinese market compared with Tesla’s Full Self-Driving (FSD) software, chief executive Xu Lei told reporters in Shanghai. Tesla has reportedly partnered with Baidu to leverage the latter’s lane-level navigation and standard definition mapping services, as part of its push to localize its most advanced driver-assistance software (ADAS) in the country.

Details: Xu told a press conference that his company is advocating a “pure vision” and “end-to-end” approach, as Tesla has been doing and many are following its lead, which involves deep neural networks, using cameras only to perform autonomous driving functions (our translation).

• The car could complete the highway on-ramp to off-ramp maneuver and drive through a construction zone in Chinese urban areas with affordable hardware of 7-11 cameras and a computing platform that can handle roughly 100 trillion operations per second (or TOPS), according to Nullmax.
• Xu expects some car models equipped with the technology to come to market in 2025, without saying more. Nullmax, with roughly 300 scientists and engineers, has been developing more safety-based ADAS functions for domestic automakers SAIC, and Chery, among others, TechNode has learned.
• Cars powered by Nullmax’s tech have traveled a combined 10 million kilometers (6.2 million miles). Xu added more actual driving data is required to provide cars with point-to-point navigation on city streets, while the company is training the ADAS system via simulation with AI-generated data.

Context: Chinese EV startups led by NIO, Xpeng Motors, and Li Auto have been ramping up efforts to transition from “rule-based” designs to an “end-to-end” autonomous driving method. Meanwhile, traditional car manufacturers are tapping into the power of AI by working with tech giants such as Huawei and NVIDIA, as well as startup unicorns like Horizon Robotics and Momenta.

• “What we see in the future is that the (AI-defined) AV stack will become an end-to-end model and will be trained in the cloud with massive data. More importantly, it will be validated in the cloud with simulation capabilities as well,” said Wu Xinzhou, NVIDIA’s vice president of automotive at its annual developer conference GTC in March.
• The US chipmaker in late 2021 released a system called “Omniverse Replicator” to facilitate the training of autonomous vehicles in the virtual world, Reuters reported. Chinese major EV makers, including BYD and NIO, are building their ADAS upon its DRIVE Orin computers, each of which offers 254 TOPS of performance.
• Nullmax was co-founded in 2016 by Xu Lei and Justin Song, both of whom spent time at Tesla. Xu worked on Tesla’s Autopilot computer vision team in 2015 and 2016, after leaving a senior engineering role at Qualcomm, while Song was responsible for engineering the Tesla Autopilot and car infotainment system from 2012 to 2015, according to their LinkedIn profiles.

READ MORE: Former Tesla engineer shares thoughts on end-to-end autonomous driving at WAIC 2024

Editor’s note: ‘Landing AI’ is a series of special reports focusing on the field of Artificial Intelligence curated by TechNode. By investigating the development of AI landing in China and the behind-the-scenes stories of the industry, we’re going to dive deeper into everything that’s possible under the new wave of AI.

A former Tesla engineer, now head of autonomous driving at China’s Chery, on July 4 shared her outlook on Chinese automakers’ future capacity to scale autonomous driving technology, as Tesla leads the way with its mass data and sophisticated artificial intelligence models.

Domestic companies are roughly 1.5 to 2 years behind Tesla in developing “end-to-end neural network” technology for autonomous driving. The recent release of Tesla’s Full Self-Driving (FSD) software v12 marked “a great leap forward” in applicability and user experience (our translation) according to Gu Junli, chief executive of Chery-affiliated ZDrive.ai, and a former senior staff machine learning engineer at Tesla, speaking at this year’s World Artificial Intelligence Conference (WAIC) in Shanghai.

Gu said she expects Chinese players to partially replace modules of advanced driver assistance systems (ADAS) with data-driven, rather than rule-based, neural networks by 2025. This shift comes as car companies ramp up efforts to collect fresh, multiformat data to improve models with more computing power. However, there would not be a single large neural net, where the core capability of Tesla’s latest software is built, for production cars until 2026-2027 in China, Gu added. Tesla in April announced its FSD users had traveled a cumulative 1.2 billion miles.

Recent figures from the community-run FSD Community tracker show Tesla’s remarkable progress in refining its autonomous driving features. The latest FSD v12.3.6 version can drive 372 miles (599 kilometers) between critical disengagements, compared with just a few miles it reportedly achieved two years ago, according to crowdsourced data released by the website in May. Tesla chief executive Elon Musk later forecasted on X “a major improvement in MPI (miles per intervention)” with the release of the FSD v12.5 in late June.

“This means the system has met the requirements for most users on normal daily commutes,” said Gu.

Several Chinese early movers are working to achieve a partial end-to-end pipeline for enabling their advanced driving features, hoping to gradually transition to fully end-to-end algorithms. On July 5, Li Auto revealed details about what it called “China’s first single one model” behind its Navigation on ADAS (NOA) functions. The Chinese electric vehicle startup claimed this model would use raw sensor input to generate vehicle motion plans. However, unlike Tesla’s solution of “basically photons in and controls out,” as described by Musk, it still relies on pre-defined, explicitly coded rules to produce control actions as output.

Meanwhile, other peers, such as Xpeng Motors and Huawei, have been taking partial end-to-end approaches, using separate neural networks for multiple tasks such as perception, planning, and action, while many are still struggling to improve results. According to a recent survey compiled by China’s Gaogong Industry Institute, Chinese users typically take the controls at least 1-2 times per 100 kilometers (62 miles) as their cars’ ADAS functions do not react appropriately in urban scenarios. Tesla may find issues in localizing its ADAS software due to China’s complicated traffic conditions, said Xpeng’s head of autonomous driving, TechNode reported.

Gu mentioned Chery’s plan to launch the advanced city NOA function for some premium models in the first quarter of next year, while its single deep learning network could go live in 2026. The Chinese auto major, which sold nearly 1.9 million cars last year, plans to integrate Level 2 ADAS systems into as many as 500,000 new cars sold this year, including 150,000 units for overseas markets. Based in the eastern Chinese city of Wuhu, Chery had a relatively late start in autonomous driving, with ZDrive.ai being set up early last year.  

Despite Tesla’s leading position with its training wheels finally taken off, Gu envisioned that Chinese companies would contribute to a wider and more personalized adoption of self-driving technology worldwide. State-owned Chery in April reached a joint venture deal with Spain’s EV Motors to produce cars at a former Nissan plant in Barcelona later this year, Reuters reported. Meanwhile, customers from some overseas markets could access Xpeng’s XNGP ADAS capabilities as early as next year, president Brian Gu told investors during an earnings call in May.

READ MORE: Chinese companies take on Tesla’s Full Self-Driving with non-lidar approach, end-to-end AI

Chinese carmakers Geely, NIO, and Huawei-backed Aito on Monday reported record deliveries of electric vehicles for June as the country’s EV segment recovery gathers momentum. Meanwhile, Huawei and Li Auto are emerging as the leaders among the newer players, despite BYD and Tesla still enjoying a near-duopoly position in the world’s largest EV market.

Why it matters: The rally, which contrasts with overall flat sales in the market, comes amid a temporary cooling-off period for the industry-wide price war on electric autos in the country. It also reflects companies’ sprints to make deliveries by the end of the first half of 2024. A new wave of consolidation and some reshuffling is also speeding up within the sector, with fewer smaller players staying in the game and some legacy giants falling behind.

Details: Li Auto topped the ranking among young EV makers by delivering 47,774 cars to customers in June, up 36.4% from a month earlier, as sales of its most affordable extended-range hybrid crossover the L6 started to ramp up after its April launch. Chief executive Li Xiang also attributed the sales recovery to improved efficiency, as the company restructured its sales and delivery teams recently following a failed launch of its first all-electric model, the Mega, in March.

• Huawei continues to put pressure on Li Auto despite delivering 1,633 fewer vehicles than the Nasdaq-listed EV startup in June. The Chinese technology giant said its Harmony Intelligent Mobility Alliance (HIMA), which for now includes Aito and Luxeed brands only, delivered 194,207 vehicles from January to June, which is more than the 188,981 units posted by Li Auto. Huawei will launch a new premium brand called Stelato with partner BAIC next month after it began taking orders for the first model, the S9, on May 31.
• Among traditional competitors, Geely set a new record for EV sales of 65,959 units in June. In particular, deliveries of its mainstream luxury brand Zeekr surpassed the threshold of 20,000 units for the first time since its inception. Geely management on Tuesday announced it was raising this year’s sales goal by 5% to 2 million units, while Zeekr’s annual outlook of selling 230,000 units remains on track. Lynk & Co sold 24,439 cars last month, 62% of which were EVs, a record high percentage for the Geely-Volvo joint brand.
• Changan’s EV sales rose 61% year-on-year and 14.7% month-on-month last month to roughly ​​64,000 units, of which 16,659 were Deepal-branded EVs. The automaker said it received more than 15,000 refundable orders for its first off-road sports utility vehicle, the Deepal G318, priced from RMB 175,900 ($24,186), five days after it was launched on June 13. Chery’s EV sales surged 181.5% to 180,947 units during the first half of this year, thanks to strong overseas demand for its budget cars, such as the QQ Ice Cream and Little Ant.
• Both NIO and Leapmotor reached the 20,000-unit milestone in June. NIO has sustained the growth momentum that it’s seen since April and is demonstrating the potential to deliver 30,000 cars a month once its first mainstream car goes on sale in September. Leapmotor reached the milestone for the first time last month, as the Hong Kong-listed firm now positions itself as a cheaper alternative to Li Auto. Smartphone giant Xiaomi handed over more than 10,000 SU7 sedans to customers in its third delivery month.
• Meanwhile, Tesla is feeling the heat. Sales of its China-made vehicles declined 10.5% year-on-year to 426,623 units during the first half of this year, including exports, according to figures released by the China Passenger Car Association (CPCA). The US automaker said on Tuesday it delivered 443,956 vehicles in the three months to June 30, a smaller-than-expected 5% drop from a year earlier and up 14.8% from the previous quarter, sending shares up more than 10%, Reuters reported.

Context: China’s retail passenger EV sales volume is expected to reach 864,000 units in June, representing a 30% growth from the same month last year and a 6% rise from May, while overall car sales declined 8% year-on-year, the CPCA estimated on Wednesday.

READ MORE: China’s EV sales recovery picks up pace in May, helped by promotions

As Tesla’s most advanced driver assistance software (ADAS) is becoming an immediate threat due to its impending arrival in China, major Chinese electric vehicle makers and auto tech companies are hurrying to pivot their strategies towards a more pragmatic yet challenging approach to developing similar offerings. Although Tesla’s rivals have for years been looking to cut out expensive components and master the newest artificial intelligence models, the game seems to be different this time.

Both NIO and Xpeng Motors are now embracing the so-called computer vision approach, championed by Tesla, hoping their upcoming models will achieve human-like downtown driving in cities via the use of fitted cameras and radar, rather than more expensive laser sensor units. Sinpro.ai, a supplier to NIO of ultra-high-resolution four-dimensional (4D) imaging radar, said it is prepared for delivery later this year with an annual capacity of 800,000 units. Tesla has reportedly replaced radar sensors on some models after years of attempting to remove them.

“It will be a difficult task for Tesla’s Full Self-Driving (FSD) software to deal with scenarios in China where it is common that a large number of electric scooters are usually ahead in the same lane with motor vehicles,” Li Liyun, vice president of autonomous driving at Xpeng, wrote on June 27 on Chinese Twitter-like microblogging platform Weibo. Xpeng is planning to remove lidar from its upcoming sedan, scheduled for launch later this year, local media has reported.

Xpeng and NIO are also following Tesla’s suit by transitioning to an “end-to-end” autonomous driving method after using modular-based neural networks that are heavily reliant on explicit coding. Meanwhile, more traditional automakers are turning to domestic tech companies for help, such as Huawei and DJI, to catch up with the latest AI trend. Despite big challenges pressuring the industry, some early movers have the potential to compete with the US pioneer, Liu Guanghao, partner at Shanghai-based venture capital firm Befor Capital, told TechNode.

READ MORE: China opens door wider to Tesla as local giants disrupt the EV sector with AI-defined vehicles

Vision-based approach

A break from previous strategies of using expensive chips and sensors to enable ADAS capabilities, the latest approach centers on reducing the cost of components in hopes of making more room for further price cuts. Many now have their eyes on the use of radar, ditched by Tesla in 2021 due to limitations in identifying stationary objects with low image resolution, as some parts makers now said it is coming close to lidar in terms of performance – but at a lower price tag.

“There is more overlap between lidar and our sixth-generation radar systems as we significantly improve the resolution,” Juergen Brandl, Head of Market China, Business Area Autonomous Mobility at Continental Group, told TechNode. “Radar could soon see through [objects] but lidar has some problems with the distance especially in difficult situations like fog and rain.” The German firm’s newest front-facing radar boasts a detection distance of 280 and 140 meters (174 and 87 miles) for vehicles and slow-walking pedestrians, respectively.

Advanced radar solutions like this also create three-dimensional point cloud datasets like lidars, helping automakers and developers move towards fully end-to-end models with raw data collection from multiple sensors to train their self-driving systems. “We can play a big role in the development of Level 2 plus ADAS systems in China,” Brandl said, adding that the company’s product is below the price of a lidar unit with “very good“ output in terms of point cloud data.

Some disagree however, saying the technology is still at an early stage. Production of Continental’s latest-gen radar started early this year and the company began delivering the world’s first 4D radar in 2021, which detects an object’s vertical information in addition to distance, direction, and relative velocity, generating more dense point clouds than a contentional radar. Meanwhile, major Chinese lidar makers have consistently enhanced the performance of their products and lowered the prices to just over RMB 1,000 ($137.6) per unit in recent years.

The key is whether 3D/4D radar could prove to be a more “cost competitive” option compared with lidar, said Liu. “I believe both [radar and lidar] have their special advantages and disadvantages,” Brandl said. ”I think time or the market will tell whether we need both of them or one solution only.”

Either way, prospects for early players are bright. Momenta, a self-driving car company backed by General Motors and Toyota, expects the bill of materials, or total cost of components, for the City NOA (Navigation on ADAS) function to be slashed to RMB 4,000-5,000 from the current RMB 7,000-10,000 in the next two years. The intent is to survive an unprecedented price war in China that has been ongoing for more than a year.

End-to-end AI

Chinese carmakers used to brag about their coverage of cities where their assisted driving software is said to enable cars to handle on-ramp to off-ramp driving, automatic highway lane changing, and congested streets. However, many are now pivoting their focus to provide a more human-like driving experience and a full end-to-end AI model is now seen as key to winning the battle.

Described by Tesla chief executive Elon Musk as “basically photons in and controls out,” such end-to-end neural networks play an integral role in a vehicle’s decision-making process, taking raw sensor data as input and producing control actions as output. This contrasts with the conventional approaches that see each functionality, from perception to planning and action, developed individually using rule-based designs, which are often inadequate  in addressing the vast number of scenarios that occur on the road, a team of researchers said in a recent report.

The result is that people still feel their cars pilot themselves inhumanly even when kitted out with some of the most cutting-edge ADAS on the market, partly because human driving behavior tends to be consistent rather than discrete. It is very difficult for the current AV (autonomous vehicle) stack to make coherent, long-term decisions, said Wu Xinzhou, Nvidia’s vice president of automotive at its annual developer conference GTC in March.

Recent surveys have shown automakers that customers are generally dissatisfied with existing ADAS functions. Nearly half of respondents take the controls 1-2 times per 100 kilometers (62 miles) as the city NOA functions do not react appropriately, while others make more frequent interventions, according to a recent survey compiled by China’s Gaogong Industry Institute. “When the driver has to interfere pretty often, then you cannot say this is autonomous driving,” said Brandl.

Xpeng is aiming for less than one intervention per 1,000 kilometers in major traffic areas in China, CEO He Xiaopeng announced early this year, without giving a timeframe. This was followed by a new software update for its XNGP ADAS in May enhanced by the first end-to-end AI model for production vehicles in China, according to the EV maker. NIO reshuffled its autonomous driving department recently, rolling up its perception as well as planning and control teams into a single group with a focus on new AI models, Chinese media outlet LatePost reported on June 19.

It requires huge amounts of data, for example, millions of video clips, to train AI systems, as well as deep pockets and access to AI chips. Musk told investors in April that his company will increase the number of Nvidia’s flagship AI processors it uses from 35,000 to 85,000 by the end of this year. He wrote in a post on X earlier that month that the investment in training computers, gigantic data pipelines, and video storage will be well over $10 billion cumulatively this year.

Such major investment and effort is not something all companies can handle however. “It would be so hard for most traditional automakers to do this by themselves. The best way is to pick a supplier,” Liu said.

The entry of Tesla’s FSD into China may feel like a new challenge therefore, but it may also coincide with a new era of partnerships around self-driving technologies.

Chinese automaker Dongfeng Motor will introduce the first global model from its premium electric vehicle brand Voyah as early as the third quarter of this year, in what will be a direct challenge to Tesla’s best-selling crossover the Model Y, local media has reported.

The 100% electric compact sports utility vehicle (SUV) will feature Huawei’s vision-based approach to automated driving functions on urban streets. It will also be produced in a joint plant set up with Nissan, as fierce competition has put downward pressure on the Japanese firm, a regulatory filing has shown.

Why it matters: Stellantis and Nissan’s Chinese manufacturing partner expects the model to appeal to young families and drive sales in the country’s already crowded mainstream luxury EV segment, company sources told National Business Daily (in Chinese) on Tuesday.

Details: Sources added only full-electric variants will be on offer for the Zhiyin (知音), which loosely translates as “bosom buddies” in Chinese. This is in line with a filing that was published last month by China’s top industry regulator, which shows the car has six variants with battery options using two types of cathodes – more energy-dense nickel cobalt manganese (NCM) and cheaper lithium iron phosphate (LFP).

• The five-seater SUV measures 4.7 meters in length and 1.6 meters in height with a wheelbase of 2.9 meters, according to the registration filings released by China’s Ministry of Industry and Information Technology (MIIT). This is roughly the same size as the Tesla Model Y and smaller than the first model under the Voyah brand, the Free SUV.
• The all-wheel drive version will have a dual electric motor setup with both motors providing a power output of 160 kW, while other variants will be offered with either a 215 kW or 230 kW electric motor. All the variants have no lidar components, which are normally packaged on the car roof or near the bumpers to help the vehicle sense and interpret its surroundings.
• This means the new car will utilize the so-called “pure vision” approach, a strategy championed by Tesla, relying on cameras and artificial intelligence, rather than the more visible but more expensive laser sensor units, to achieve automated driving. Voyah announced in April at this year’s Beijing Auto Show its first global model would feature Huawei’s intelligent driving software and operating system HarmonyOS.
• Dongfeng will manufacture the car at its latest joint plant with Nissan, which opened last year in the central Chinese city of Wuhan with an annual capacity of 300,000 units. Nissan has been making several electric models including the Ariya with Dongfeng at this plant to date, although it sold less than 2,000 units of its second EV-only model in the country over the past six months, figures compiled by auto service platform Dongchedi showed.

Context: Nissan’s China joint venture with state-owned Dongfeng reported sales of 723,139 cars in the country last year, representing a 21.5% plunge from a year ago. The companies last November announced plans to export vehicles from China in 2025. The Japanese carmaker was also reportedly considering a 30% cut of its annual car output in China, along with peer Honda.

• Dongfeng’s Voyah in January announced a collaboration with Huawei to develop smart EVs. The brand has three models on sale and delivered 24,869 EVs, including all-electrics and plug-in hybrids, from January to May. The automaker’s off-road vehicle lineup Mengshi also works with Huawei.

Li Auto is on track to offer its new level 3 automated driving system within the next 12 months, which would enable hands-free, eyes-off driving under certain conditions, as it transitions towards “end-to-end neural network” architecture, according to chief executive Li Xiang.

Why it matters: The comments mark an increase in competition between Tesla and Chinese automakers over the adoption of autonomous driving. The US automaker is reportedly looking to roll out the latest version of its “Full Self-driving-Driving” software in China, its second-largest market.

• The news also comes as Li Auto started calling back some former staff late last month having previously dismissed roughly 30% of its 1,100-person Autonomous Driving Group in a setback to the company’s launch of its first battery electric model, the Mega. 
• Most employees rehired by the electric vehicle maker work on the NOA (Navigation on ADAS — advanced driver assistance system) function for urban driving scenarios. Vice President Lang Xianpeng on June 7 promised surviving employees from his team that the layoff was now over, sources familiar with the matter told the 21st Century Business Herald (in Chinese).

READ MORE: China opens door wider to Tesla as local giants disrupt the EV sector with AI-defined vehicles

Details: Li Auto will roll out a new version of its NOA software in the third quarter of 2024. This version still requires the driver to be in full control but will not rely on a high-definition map. The company announced that it will launch its city NOA function to users in 100 major Chinese cities in November.

• This will be followed by a wide release of its Level 3 autonomous driving system later this year, or in early 2025, Li told the audience at the China Auto Chongqing Summit on June 8, according to short videos posted on the social media platform WeChat.
• Li said the company has been working on an end-to-end artificial intelligence approach since late 2023. The approach is using video clips from real driving situations as well as machine learning algorithms to handle the vehicles’ control. It is also exploring Visual-Language Models (VLMs), which could better learn patterns and correlate between visual data and natural language than existing offerings.
• Li Auto’s L3 conditional autonomous system will use both approaches, Li said, allowing the human driver not to monitor the vehicle constantly but to be ready to take control, according to the definitions set by the Society of Automotive Engineers (SAE). It could further evolve to a level 4 highly autonomous driving system over the next three years, Li added, without elaborating further.

Context: Automakers in China, including Li Auto, have either been applying for mapping licenses or working with map services in order to collect large amounts of highly detailed geographical data, which helps autonomous vehicles (AVs) make better decisions when performing driving tasks. However, many of them, such as Huawei and Xpeng Motors, are now looking for alternatives due to cost and complexity reasons.

• It is unknown whether Li Auto will take legal responsibility for its upcoming level 3 technology. Last year, Mercedes-Benz became the first automaker allowed to sell cars with its L3 Drive Pilot system in California and Nevada, Reuters reported. China is pushing for similar regulatory initiatives with assistance from automakers including BYD, SAIC, and NIO.
• Li Auto has been working on layoffs since May to cut 18% of the company’s workforce, which stood at roughly 5,600 as of last year, while that percentage for the Autonomous Driving Group was more than 30%, according to the 21st Century report. President Ma Donghui told investors in November the company planned to have 2,000 employees for AVs by the end of 2024. 

READ MORE: Li Auto accelerates assisted driving tech competition amid launch of first battery EV

Tesla claimed on its Chinese app on Monday that it would be rolling out its full self-driving (FSD) system “very soon” rather than the previously stated “a bit later” (our translation). The development comes as the US automaker reportedly received tentative approval from Chinese authorities to deploy its advanced driver assistance systems (ADAS) in the world’s most competitive electric vehicle market following a surprise visit to Beijing by chief executive Elon Musk. 

Local customers have expressed mixed views about the potentially game-changing technology finally coming to their country, although many Tesla owners and loyal fans welcomed the long-overdue launch on social media. The technology may not yet work well in Chinese urban driving scenarios, despite costing RMB 64,000 ($8,838); most competitors such as Xiaomi promise to offer similar functions free of charge, Li Yang, a Model 3 owner in Shanghai, told TechNode on Tuesday.

Major Chinese EV players Huawei and Xpeng Motors, who specialize in autonomous driving, have responded in a relaxed way to what is seen by many as a major win for their US rival. 

“We are confident that Huawei’s intelligent driving system is the best in the world,” Richard Yu, Chief Executive of Huawei’s Consumer Business Group, said at a press event last week as the company introduced the redesigned Aito M5 crossover. Aware of Tesla’s release last month of the no-longer-in-beta FSD software, Yu said the company has closely studied its competitor’s technology by taking test rides in San Francisco, among other US cities. 

A long-awaited battle: Experts told TechNode that the US and China have been in a neck-and-neck race to develop “end-to-end neural network” technology, seen by experts as the biggest difference between Tesla’s FSD v12 software and earlier versions.

• Tesla chief executive Elon Musk stated publicly in November that its most updated, end-to-end FSD uses machine learning rather than rules crafted by programmers to absorb driving behaviors from large datasets. The approach reduces the carmaker’s reliance on coding, expensive sensors, and high-precision maps for exact road information.
• “It is more of a 1,000 flowers blooming type of situation here in China, while the US market is guarded by a sole player,” Paul Gong, head of China autos research at UBS, told reporters on Monday in Beijing, referencing a Chinese idiom. Both the US and China are at the forefront of the technological trend, followed by Europe and the rest of Asia, Gong added.
• Although Tesla has huge amounts of data, Chinese firms have the potential to quickly catch up by ramping up their test fleets, according to Song Chaozhong, CEO of Chinese self-driving car startup eCHIEV. Song cautioned that real, “human-like” autonomous cars are still far away, despite the technology likely being a positive driver for vehicle sales. 

A booming segment: Analysts expect Tesla’s imminent launch of the FSD software in China to not only help restore Beijing’s image among foreign investors in general, but also help China extend its lead in the adoption of driver-assist technologies worldwide, and enhance its reputation as a rising powerhouse of next generation cars. 

• China has become a source of innovative engineering for global automakers, as they are now leveraging the capabilities of Chinese companies to design global vehicle offerings, Gong said when asked his view of this year’s Beijing Auto Show. He added China’s push to open its industries to greater foreign investment and competition has been “underestimated.”
• Tech-literate Chinese EV makers are poised for explosive growth thanks to growing interest from Chinese consumers in intelligent driving features, as Elon Musk earlier predicted a “ChatGPT moment” was coming for his company. Huawei on April 24 estimated that more than 500,000 cars on Chinese roads will feature its advanced driving system by year-end. 
• Xpeng is scheduled to launch its affordable brand MONA in June with the first model expected to feature an autonomous driving system without the integration of lidar and aiming for annual sales of 100,000 units. Global shipments of vehicles with ADAS features, known as Level 2 plus autonomy, could more than double to 4.5 million units this year, with China leading the game, research firm Canalys wrote in December.

Context: Tesla’s China breakthrough comes after US Secretary of State Anthony Blinken on April 25 called on China to provide a level playing field for American businesses during his second visit to China in less than a year, Reuters reported. 

• The US automaker has reached a deal with Baidu to localize its driver assistance solution with map and geographical information from the Chinese tech giant, according to Bloomberg.

Global carmakers from Volkswagen to Toyota are introducing new models at the Beijing Auto Show 2024 with the help of Chinese tech companies in an effort to defend market share amid a major shift to electric vehicles led by local car giants. 

The biannual trade event, which on Thursday witnessed a return to pre-pandemic attendance levels after a brief pause in 2022, also represents another landmark moment for the Chinese EV sector where domestic players are once again on the offensive with an array of new models. A similar event in Shanghai a year ago reportedly prompted the industry’s legacy players to either increase their efforts or rethink their brands in order to adapt to the changes.

Below, TechNode provides a summary of some of the biggest releases from both international and Chinese automakers, including BYD, GAC, Geely, Honda, Toyota, and Volkswagen. There are also some notable updates from younger players such as Xiaomi, NIO, and Xpeng, which might give a clue as to where the most competitive EV market in the world is heading. 

BYD

China’s biggest EV maker on Thursday unveiled a higher-end variant of its Qin vehicle, the top-selling compact sedan in the country last year. The new car is scheduled for launch in the second quarter with an expected price tag of RMB 120,000 ($16,560). The Qin L measures 4.8 meters in length and spans a 2,790-millimeter-long wheelbase, placing it between the Qin Plus and the Han in terms of size. It features the company’s next-generation plug-in hybrid platform DM-i 5.0, which could suggest an improvement in range and fuel efficiency. The company also introduced the Seal 06, a plug-in hybrid EV under the Ocean lineup which is about the same size as the Qin L but loaded with more stylish design language to attract younger customers. 

GAC

Aion, the third best-selling EV brand in China last year after BYD and Tesla, showcased its first global model, replete with modern technologies and angular styling, as its state-owned parent beefs up its strategy to woo customers worldwide. GAC said its all-new Aion V, scheduled for launch in July, will maintain a driving range of over 750 kilometers (466 miles) even when the mercury dips to -30 degrees Celsius, and offers a large interior space comparable to the likes of the BMW X5. The all-electric sports utility vehicle, which incorporates traditional Chinese dragons into its design, can navigate varied urban environments worldwide with features such as lane switching by utilizing advanced artificial intelligence algorithms to process sensor data instead of high-precision maps, the company said.

Geely

Volvo’s parent showed its ambition to become a disruptive force in the global automotive industry with the debut of what it described as the world’s first production model with two sliding doors and front swivel seats. Geely has taken a radical approach to how EVs are put together, giving the 4.7 meter-long Zeekr Mix an extended wheelbase of three meters achieved through a more compact electric motor, shorter front overhangs, and repositioning of the air conditioning system, among other components. This, along with the front seats that can rotate 270 degrees, would allow kids to play or families to dine together in a 1.5 square meter interior flat space. The five-seater multi-purpose vehicle, offering a 1.5 meter width opening area for passengers, targets three-generation Chinese families, especially those with elders and pregnant mothers.

Honda

Japan’s Honda on Thursday began selling its second all-electric model with time-limited discounts in China in the company’s latest effort to boost sales. The move comes after entrenched rivals such as BYD and Tesla recently rolled out more price cuts amid slowing growth. The e:NP2 SUV has a driving range of 545 km at a price tag of RMB 159,800, providing buyers with a RMB 30,000 reduction compared to its original plan, according to Li Jin, a deputy general manager of Honda’s China joint venture with GAC. Honda also debuted the Ye, a new series of all-electrics with technologies sourced from Huawei and iFlyTek among other Chinese tech firms, as part of its plan to sell only EVs in China by 2035.

Toyota

Toyota said on Thursday it will integrate lidar sensors into its two upcoming models under the “Beyond Zero” (bZ) all-electric series, as the world’s top-selling automaker looks to provide consumers with the same level of assisted driving technology as Huawei and Xiaomi. The bZ3x and the bZ3c compact crossovers will be able to automatically change lanes, and enter and exit Chinese highways when they go on sale within the next 12 months. Toyota also announced it is exploring the uses of generative AI in collaboration with Tencent, as Chinese consumers expect their future vehicles to be more capable and personalized. This follows reports that the Japanese giant is using Huawei components to enable autonomous driving functions on its China-made EVs. 

Volkswagen 

Germany’s biggest carmaker participated in Auto Beijing 2024 with major global debuts including the ID.Code concept – which offers a glimpse into its upcoming, China-specific all-electric lineup ID.UX – as well as the Audi Q6L e-tron, the first production model based on its PPE electric platform. The coupe-styled ID.Code will be equipped for highly autonomous driving and come with a sophisticated AI assistant with contributions from local designers, as Volkswagen plans to introduce the first model under the new series later this year. In addition to partnerships with Xpeng and Horizon Robotics, the automaker confirmed it is working with Chinese tech giants including DJI, as its latest Tiguan L SUV now features an advanced driver assistance system (ADAS) sourced from the drone maker.  

Xiaomi, NIO, and Xpeng

Xiaomi was the center of attention on Thursday when the Chinese smartphone giant said it had secured 75,723 reservations with non-refundable deposits for the SU7, its first EV, with a competitive price range between RMB 215,900 and RMB 299,900. Chief executive Lei Jun expects monthly delivery to exceed 10,000 units in June and the company is set to reach a milestone with 100,000 EV deliveries by this year, which would be a record speed for any Chinese EV brand. The 55-year-old entrepreneur is an icon in the Chinese tech and auto industries, with his visits to rivals’ booths becoming one of the hottest topics at this year’s Beijing Auto show.

Xpeng Motors could take on its major frenemy with the mainstream brand MONA, short for ‘Made of New AI,’ CEO He Xiaopeng told reporters during a press conference. 

Meanwhile, one of NIO‘s new affordable brands, called ONVO, is scheduled for launch in the second quarter of this year. The luxury EV maker on Thursday launched a redesigned version of its ET7 sedan with a starting price of RMB 428,000, which is RMB 20,000 lower than its original version launched three years ago.

READ MORE: Huawei, Xiaomi, and Geely’s new EVs have details leaked on Chinese government site

Hundreds of people flocked to a Xiaomi store in the southern Chinese city of Guangzhou in the late hours of Thursday evening to be among the first to take a look at what many deem to be the electronics brand’s more affordable alternative to a Porsche, as the brand announced a lower than expected starting price for its debut electric vehicle. That’s what TechNode observed during a livestream broadcast by a Chinese electric car blogger on social media app WeChat that attracted more than 200,000 viewers within an hour. 

Xiaomi has already enjoyed a debut win after securing a record 50,000 pre-orders in just a few minutes following its SU7 EV launch event. The official livestream racked up nearly 43 million views on microblogging platform Weibo, underscoring the overwhelming interest among tech-savvy Chinese consumers in the company’s first car. Those making a reservation were asked to pay a RMB 5,000 ($692) deposit as part of the process, with the tech giant expressing its thanks to customers who did so in a brief statement on the microblogging platform Weibo (in Chinese). 

The all-electric sports sedan is selling at a lower than expected starting price of RMB 215,900 ($29,881), roughly $4,100 cheaper than the popular Tesla Model 3, while touting better performance from driving range to acceleration. The dual-motor all-wheel drive version competes with the Porsche Taycan with a top speed of 265 kilometers (165 miles) per hour at a price tag of only RMB 299,900.

Xiaomi’s car launch contrasts markedly with Apple’s surprise retreat from the EV landscape, after the iPhone maker reportedly scrapped its decade-long effort to make a car recently. “We will provide every user, including those with Apple devices, a smart and connected life experience everywhere, creating seamless integration in their homes, cars, and beyond,” Xiaomi chief executive Lei Jun said during the press conference (our translation). 

“A trump card”

Lei, the 55-year-old serial entrepreneur dubbed “China’s Steve Jobs”, tried to lure users away from traditional carmakers during the two-hour event by showcasing how Xiaomi’s ecosystem would provide universal connection and integration between different devices, including phones, cars, and gadgets at home. 

Xiaomi essentially promised potential buyers that their devices would be all tied together with a click, swipe, or a simple voice command. The car’s air conditioning will cool the interior down on a hot summer’s day once the owner tells a home speaker what temperature they want before even leaving the house, according to one example given. In another, the car’s dashboard could become a centralized command station for home accessories which will be activated as the driver approaches home. 

Although rival Huawei has touted similar efforts with its EV partners, Xiaomi claimed last November that more than 655 million devices have been connected to its IoT (Internet of Things) platform, from televisions to fitness bands, making it the biggest network of its kind worldwide. “This is a trump card from Xiaomi,” said Lei when discussing the linking of the brand’s new EV with its IoT network. 

“Better than Tesla”

Meanwhile, Lei mentioned Xiaomi’s plans to be “among the top-tier players” in autonomous driving, a field where Tesla already stands out as a pioneer globally and Huawei is establishing its name at home. The company said its EVs are already capable of traveling more than 300 km on average autonomously on Chinese highways before human drivers take over and will be able to complete most trips by themselves on urban streets across China by August. 

Xiaomi is moving towards two distinct approaches by working on both a camera-based computer vision system and another advanced driver assistance system (ADAS) that relies on more sensors including lidar. The company said it will exclusively employ Nvidia’s cutting-edge chips for both systems and bring the software development completely in-house to ensure timely over-the-air updates across all its car variants. 

“In China, Tesla vehicles will not be as good as the SU7 when it comes to intelligent driving capabilities,” said Lei, adding that customers who placed their orders before the end of this year will get the software free of charge. Tesla currently charges Chinese buyers RMB 64,000 for future access to its full self-driving (FSD) package, despite it remaining unavailable in the country. Still, it is faced with competitors from BYD to Geely which also look to offer customers highly automated features with their premium EVs.

READ MORE: Key takeaways from Xiaomi’s EV pre-launch: A top offering facing a tough test

Details of new electric vehicle models from Chinese auto and tech majors including Huawei, Xiaomi, and Geely have been leaked online via an official regulatory process. Some are expected to make their debut at the upcoming Beijing Motor Show next month, positioned to compete with models from dominant rivals such as BYD and Tesla, and potentially stirring up a new price war in the world’s biggest auto market.

The companies expect the upcoming models, now making a splash online, to become bestselling or otherwise strategically important cars for their brands. Below are highlights from the registration filings released for public review by China’s Ministry of Industry and Information Technology (MIIT) on Tuesday, giving critical details of the models ahead of their official launches. 

Stelato S9

The S9 will be the first model under the new premium Stelato brand launched in partnership between Huawei and China’s BAIC and the largest sedan model of all Huawei-enabled EVs to date. The car measures 5.1 meters in length and 1.5 meters in height with a wheelbase of nearly 3.1 meters, offering passengers a spacious and comfortable interior in an effort to draw in affluent Chinese consumers. 

The all-electric executive sedan will be available in single and dual-motor variants producing 308 and 524 horsepower respectively, and will include innovative elements such as a camera-based digital rear-view mirror system as an optional add-on, according to the filings. Analysts expect the car to be launched in June for between RMB 300,000 and RMB 500,000 ($41,730-$69,550). Shares in partner BAIC Bluepark surged 32% on the mainland Chinese stock market on the news over the week. 

Zeekr Mix

China’s Geely is raising its bet on the small but growing segment of multi-purpose vehicles with its upcoming roll-out of the Zeek Mix, an all-electric five-seater van, after the launch of its larger and more business-oriented Zeekr 009 nearly two years ago. The pictures published by MIIT show a mid-size MPV with a rounded exterior and low center of gravity as well as an optionalLIDAR unit mounted on the car’s roof for automated driving. 

It is slightly shorter than the Zeekr 007 sedan at nearly 4.7 meters in length, likely making it easier to maneuver and attractive to parents, while offering a larger interior with a 3,008-millimeter-long wheelbase. The single-motor car has a 422-horsepower electric powertrain – higher than the plug-in hybrid Denza D9 from BYD, currently a top-seller in the market, but less powerful than bigger offerings such as the Xpeng X9 and the Li Auto Mega. 

Xiaomi SU7

Xiaomi on Wednesday received Chinese government approval for a new variant of its first EV, the long-anticipated SU7, equipped with lithium iron phosphate (LFP) batteries sourced from CATL and roughly 110 kilograms heavier than the one powered by BYD’s iron-based batteries. Speculation has circulated that the new power option could be CATL’s Shenxing batteries, which have boasted of a high energy density for a longer driving range and an 800-volt electrical system for faster charging compared with existing offerings. 

China’s industry regulator had previously uncovered details about another entry-level SU7 and the more premium SU7 Pro/Max, which the company claimed could accelerate from 0 to 100 km/h (62 mph) in 2.78 seconds and would be more aerodynamic than rivals’ offerings including Tesla’s Model S. Chief executive Lei Jun said on Friday that the smartphone maker will begin deliveries immediately on March 28, when pricing of the sports sedan will be finally announced.

READ MORE: Explainer: How a new round of price cuts are reshaping China’s EV market

Huawei and Chinese automaker BAIC are aiming for monthly sales of their first joint electric vehicle model under a new brand to exceed 10,000 units, as they also set their sights on markets in Asia and Europe, Chinese media has reported. 

Why it matters: The launch of the new car brand with BAIC, named Stelato and scheduled to be unveiled in April at this year’s Beijing Motor Show, would be another test for Huawei as the smartphone maker has been looking to grow its automotive business after being hit by US sanctions. 

• Huawei’s track record in EVs has so far been mixed. It has managed to bring the struggling Aito brand back to life with manufacturing partner Seres following the successful launch of the redesigned M7 plug-in hybrid crossover in September. However, the first Luxeed EV was a setback for the tech giant and its partner Chery, as buyers were confounded by delivery delays stretching for months. 

Details: Huawei and BAIC Bluepark, a mainland-listed subsidiary of the state-owned automaker, expect monthly sales of the first model under the new Stelato brand to achieve more than 10,000 units, according to an internal memo seen by Yicai (in Chinese). 

• According to the report, the executive sedan will be priced between RMB 300,000 and RMB 500,000 ($41,730-$69,550), and is scheduled to debut next month at this year’s Beijing Motor Show; it would then officially launch in June. 
• BAIC, a main partner of Daimler in China, is planning to create a capacity of around 300,000 EVs for the Stelato project, with more high-end EV models from sports sedans to SUVs in the pipeline, the report said. 
• The automaker last month told investors it is setting up a sales and service network for overseas markets, especially Europe and Asia. An existing partner to Huawei, BAIC sold fewer than 50,000 units of its Arcfox-branded EVs from 2021 to 2023. 
• Meanwhile, Huawei is set to launch its first model as part of a separate partnership with JAC Motor by the end of this year. The two companies plan to produce 35,000 units of the multi-purpose vehicle annually in a new plant scheduled for completion in 2025, according to an environmental filing published on March 1. 

Context: More Chinese automakers, such as state-owned Changan and Dongfeng, are joining Huawei’s expanding “Harmony Intelligent Mobility Alliance” in hopes of re-creating their brand images with Huawei’s smart cockpit and automated driving technologies, and leveraging its sales network.

• Aito for now remains the biggest success story of Huawei’s push into EVs, as vehicle deliveries grew 24% year-on-year to 94,380 units in 2023. Sales further increased to more than 54,000 units during the first two months of this year when most automakers reported flagging sales.

Sales of major Chinese electric vehicle makers including BYD and Geely fell by nearly half in February from a month prior, hit by the week-long Chinese New Year holiday and a prolonged cold snap, as well as ongoing economic uncertainty. 

Why it matters: The slump largely reflects the increasingly fragile position of smaller EV makers, already struggling to maintain reasonable sales volumes while larger rivals compete for market share with new models on offer for lower prices. 

• Consolidation within the world’s biggest EV market is expected to accelerate as competition intensifies and growth slows. Li Auto president Ma Donghui told investors last week that the top three brands could together claim 70% of the segment in which an EV is priced from RMB 200,000 ($27,780) by the end of this year. 

Details: BYD on March 1 reported its lowest sales since June 2022, with 122,311 vehicles sold last month, a 39.2% fall from January. New energy vehicle (NEV) sales of rival Geely, including battery EVs and plug-in hybrids, dropped 49% month-on-month to 33,508 units. 

• Great Wall Motor saw a bigger decline from a month earlier than its rivals as the auto major sold 12,253 EVs in February, a drop of 51%, while sales of Aion, a subsidiary of China’s GAC Group, were 33.2% lower than a month before. 
• Jefferies analysts attributed the decline to a seasonal demand lull in the just past Lunar New Year holiday, which reduced working days and dampened buying interest, accompanied by an unexpected cold snap that swept through most of China. 
• Smaller EV makers were hit harder than large ones, as monthly sales of both Leapmotor and Hozon Auto fell below 7,000 units, while February deliveries of Xpeng Motors and Voyah were down roughly half to 4,545 and 3,182 units respectively. 
• Most automakers have either launched cheaper new models or offered big incentives to drive sales in recent weeks. BYD kicked off 2024 with the launch of at least eight lower-cost version cars over the past two weeks, forcing rivals including Geely, Changan, and Leapmotor to follow suit.
• Huawei-backed EV maker Aito and Nasdaq-listed Li Auto, are among few carmakers to enter 2024 in decent shape, each delivering over 20,000 units last month. General Motors’ joint venture Wuling and NIO saw deliveries drop 18.4% and 19.1% from January respectively. 

Context: Analysts expected NEV sales to bounce back in March following recent price cuts by China’s major automakers, as store traffic returns to pre-Lunar New Year levels, according to a March 1 note from Jefferies, citing a Chinese dealership. 

• Overall, NEV sales in China declined 29.5% month-on-month to roughly 668,000 units in January, in part due to a high base in December when most automakers made a year-end sales push, according to figures from the China Passenger Car Association. 
• The industry group warned that numbers would drop in February to their lowest level of the year as the market entered a traditionally low season. It remains to be seen whether March will witness a sales rebound.

Geely is taking strides towards becoming a global auto leader as it finally lists an iconic sports car brand after a months-long delay. 

Lotus Technology, the electric vehicle division of Lotus, majority-owned by Geely after a financing deal in 2017, began trading its shares on Nasdaq on Friday. The brand appeared under the ticker LOT, achieved via a merger with a so-called blank-check company.

Despite China being Lotus’ largest single market, international markets are set to make a greater contribution to revenue growth and margin expansion, Feng Qingfeng, chief executive of Lotus Group and senior vice president of Geely Holding Group, told a Friday media call. 

Once a legend in the racing world with its lightweight and aerodynamic vehicles, UK-founded Lotus was for years fraught with financial trouble due in part to a mismatch between high investment costs and low-volume output. 

The $880 million infusion of capital from the deal is expected to fund Geely’s ambitious plan to fully electrify the illustrious 75-year-old racing brand by 2027 and boost its business beyond the super-luxury price segment globally. 

Global electrification boom 

Around the time Emira – the last Lotus model with an internal combustion engine – was released in mid-2021, Geely set its sights on the booming global luxury EV market set to enjoy  double-digit growth over the decade, according to Oliver Wyman, adviser on the deal. 

China’s second-biggest automaker by sales is set to expand in the US and South Korea in the second half of this year with the introduction of Coventry-designed, Wuhan-manufactured Lotus EVs featuring German engineering and Tesla-like automated driving features. 

Sales of the Eletre, an $115,000 sports utility vehicle and first of the new-age Lotus products, will begin in the US as early as September, followed by the delivery of the similarly-priced Emeya sedan next year, said Feng. Last July, Feng told the Financial Times that Lotus might use an existing plant owned by Geely-backed Volvo Cars in South Carolina, or possibly open an additional new US factory. 

The management on Friday did not give any update on the plan but expressed “full confidence” in its expansion, with its regional retail network set to be expanded to 80 showrooms from 47 in North America by 2025, despite rising US-China tensions. Global markets will account for roughly 60% of Lotus’ total sales by 2025, while China is set to contribute the remaining 40%, according to Feng.

Long road to revival

Taken public via a special purpose acquisition company on Friday, the UK-originated and Chinese-backed EV maker now has a market value of roughly $7 billion, less than a sixth of arch-rival Porsche. Yet, Lotus has set an ambitious goal of selling 150,000 EVs annually in 2028, up from 21,500 units last year, including a small number of gasoline-powered cars. 

The new phase brings different challenges. In addition to economic uncertainty worldwide, consumer sentiment for EVs is weak overall, especially in Europe, where Lotus is set to operate 105 retail stores by 2025. These challenges are compounded by policy and geopolitical risks for Chinese-backed EV makers selling abroad.

Meanwhile, EV sales in China appear to be shifting into a slower gear this year after years of accelerating growth. EVs now account for only 7-8% of new car sales in the segment priced from $80,000, lower than the “low teens” growth rate baseline estimated by the company, Feng acknowledged. Yet he continued to tout “strong growth potential” in the world’s biggest auto market. 

Management believes that a clear sales and marketing message derived from its decades of storied racing history will enable Lotus to stand out from rivals and bring it into closer competition with Volkswagen’s Porsche, which delivered over 40,600 electric Taycans worldwide last year. 

Meanwhile, Lotus Tech expects economies of scale from increased volume and competitive labor costs to bring its gross margin to at least 21% in 2025, up from 4.7% as of last June. The company has bet on a strategy similar to that of Porsche, which expanded into more affordable lifestyle luxury, from a pure focus on state-of-the-art sports cars. 

With a proven track record of turning around loss-making Volvo in just three years after its 2010 takeover, Geely has shown it can be adept at cross-border moves. The question now is, will it be successful this time?

NIO Capital, a venture capital firm founded by Willliam Li, chief executive of the namesake electric vehicle maker, has raised a new China-focused fund of more than RMB 3 billion ($416.8 million), despite a global market lull and domestic economic challenges. 

Why it matters: The fundraising milestone will allow NIO Capital to further explore the “transformative potential of innovative technologies in the automotive and energy sectors,” said Ian Zhu, a managing partner at NIO Capital, in a Monday announcement. 

• The NIO-related growth-stage investor has backed some of the rising stars in the Chinese automotive world, from battery material manufacturer Ronbay to self-driving car startups Momenta and Pony.ai. It has also invested in battery giant CATL. 

Details: The deal shows the strength of NIO Capital’s ties with its limited partners, which include venture capital investment guidance funds set up by Chinese regional governments, national funds, family offices, and listed companies, according to the announcement, which did not provide further details. 

• The Shanghai-based venture firm said it will maintain its focus on areas such as auto tech and sustainable energy with the new RMB 3 billion fund, which brings the total assets under its management to about RMB 15 billion. 
• Speaking to Chinese reporters, a NIO Capital representative stressed the fund’s independence from NIO in its final investment decision-making. “We don’t require that a parts maker only supplies to NIO,” the person said as an example of its open-mindedness, 36Kr reported.

Context: The deal comes as global private investment remains soft due to interest rate hikes and economic headwinds. 

• Fundraising totals were on track to drop 28% in 2023 compared with 2022, and the number of funds could decline by almost half, US management consultancy Bain & Company said in a note dated July 17. 
• In China, roughly 5,300 private capital funds raised a total of RMB 1.35 trillion during the first nine months of 2023, down 2.1% and 20.2% from a year earlier, according to consultancy Zero2IPO (in Chinese).

The Chinese electric vehicle segment briefly lost momentum in January as a majority of automakers reported a significant sales drop on Thursday during the traditional low season, a contrast to December when big promotions and exciting discounts gave a short-term sales boost at year-end. 

Why it matters: The decline was especially marked for BYD, which accounted for nearly a third of the country’s green energy vehicle sales last year. The biggest Chinese EV maker maintained its leading position with sales of more than 201,000 units last month, although that number represented a 41% decrease compared to December. 

• Geely and Huawei-backed Aito are among the few bright spots that have bucked the trend with their new models, becoming potential challengers to BYD’s dominance. Meanwhile, international carmakers such as Volkswagen and General Motors posted decent sales with local partner SAIC, showcasing their efforts to play catch-up. 

Ups: Geely posted its best-ever month with sales of 65,826 fully electric and plug-in hybrid vehicles last month, roughly 5,400 units more than in December and nearly six times greater than what Volvo’s parent achieved a year ago. This growth was partly due to strong sales of its Galaxy and Lynk & Co brands, which sold 19,223 and 28,176 units over the month, respectively. 

• Aito also delivered a record 32,973 cars in January. That is in line with the company’s outlook and stands in stark contrast to the same month last year when it reported deliveries of only 4,475 vehicles. The brand, launched by Huawei and its manufacturing partner Seres, said on Thursday (in Chinese) that it has secured 140,000 non-refundable orders for its redesigned M7. 
• Avatr, another Huawei-backed and Changan-owned EV brand, also posted improved sales volume for January buoyed by the positive demand for its second model launched in November. However, an ongoing shortage of Huawei’s key components may add uncertainty to the outlook of the premium brand and its peers, as reported by Reuters. 

Downs: On the other hand, China’s US-listed EV trio are the ones under pressure by reporting their lowest monthly deliveries since June, as they engage in a relentless price war with larger tech and auto forces. Both Li Auto and NIO slashed prices on current lineups last month as they prepare to launch revamped models in March, potentially causing some customers to postpone purchases. 

• Sales of Aion, which has sold a large proportion of its vehicles to ride-hailing fleets, also dropped 46% month-on-month to 24,947 units in January. The EV maker, affiliated with state-owned automaker GAC, is now ramping up efforts to go abroad, as sales in the overseas markets reached the threshold of 3,000 units for the first time last month. 
• Deliveries of Great Wall Motor and Deepal, another Changan subsidiary, also decreased by 16.2% and 7.1% to 24,988 and 17,042 units respectively, from December. Meanwhile, IM Motors, a premium EV brand launched by China’s SAIC, saw a bigger drop with its January number more than halved from a month earlier to 5,305 units.

Context: China’s sales of new energy vehicles, mainly all-electrics and plug-in hybrids, increased 92% year-on-year from Jan.1-28 partly due to the year-ago low base effect marked by a wave of Covid cases after Beijing dismantled pandemic controls in December 2022. However, that number was 24% down compared with December when most automakers made a year-end sales push, figures from the China Passenger Car Association (CPCA) showed.

BYD and FAW Group are aiming to invest in DJI’s automotive business unit – one of the few Chinese companies capable of developing partially automated driving software – as part of the latest effort by traditional automakers to catch up with rivals such as Tesla, local media has reported. 

Why it matters: The news comes at a time when a growing number of automakers and suppliers are expanding their alliances in hopes of accelerating progress in and sharing the cost of making partially automated driving passenger cars. In China, the technology is being popularized by the likes of Tesla, Huawei, and Xpeng Motors. 

• It is also the latest example of Chinese auto majors taking steps to turn their business partnerships with tech companies into deeper capital relationships. Changan Automobile recently announced it will invest in a new venture set to absorb Huawei’s car business unit. 

Details: BYD and FAW, a manufacturing partner of Volkswagen and Toyota in China, recently conveyed their message to DJI Automotive, the car business unit of the namesake drone maker, 36Kr first reported on Wednesday (in Chinese). Citing people with knowledge of the matter, the report did not put a figure on the planned investment.

• BYD is planning to roll out partially automated driving functions for future affordable models priced at RMB 200,000 ($27,920) or below in 2025 with assistance from DJI, a person close to the company told TechNode on Thursday. 
• DJI is appealing to original equipment manufacturers (OEMs) for its low-cost advanced driver assistance system, as they have been struggling to lower costs and repeatedly cut prices of their cars, another source with direct knowledge of the matter told TechNode. 
• DJI, China’s biggest drone maker, stated that its technology suite, including an affordable computing chip from Texas Instruments (TI) with only a few cameras, could enable cars with automatic lane changing and on-ramp to off-ramp functionalities on Chinese expressways. 
• Some EV makers, including NIO and Li Auto, have developed similar functions based on Nvidia’s more expensive DRIVE Orin processors, with each offering 254 trillion operations per second (or TOPS), compared with the 32 TOPS offered by a top-end TDA4 chip from TI. 
• “While BYD is not the forerunner in autonomous driving, it has the ability to be a fast follower which will likely meet the needs for the majority of Chinese consumers,” Bernstein analysts wrote in a Jan. 22 note, citing economies of scale, which allows it to collect more data for software training from its large fleet, as one of the reasons.
• BYD and DJI did not respond to TechNode’s requests for comment. 

Context: Shenzhen-headquartered DJI separated its car business into an independent company in late 2022 and became open to external funding with a target valuation of $1.5 billion, Chinese media outlet Leiphone reported in August. 

• The drone giant has worked with SAIC-GM-Wuling (SGMW), a General Motors China joint venture, since 2019, with the first model integrated with its automated driving technology, the Baojun Kiwi EV, going on sale with a price tag of RMB 102,800 in September 2022. 
• BYD showcased a Yangwang luxury off-roader that integrates an unmanned aircraft on the car’s roof in a collaboration with DJI during a press event on Jan. 16. It also announced plans to release at least 10 new models this year featuring advanced driving technology.

READ MORE:  BYD’s Denza launches cheaper driver assistance system with Nvidia amid rising competition

Huawei and Dongfeng Motor, a Chinese manufacturing partner of Stellantis, are in an ongoing collaboration to develop smart electric vehicles, the companies have announced. This adds to a string of such deals by technology giant Huawei as it accelerates its entry into the auto market. 

The partnership could help Voyah, a subsidiary of state-owned automaker Dongfeng, increase sales and expand its presence in the red-hot EV market where a wave of consolidation and reshuffling is underway, according to David Zhang, a visiting professor at Huanghe Science and Technology University. 

Why it matters: The alliance is the latest example of Huawei’s multifold endeavor to expand into EVs. It has pushed two initiatives to enhance cooperation with carmakers in particular. 

• One is the so-called “Huawei Inside (HI)” business model, signifying that cars will feature Huawei’s full-stack technologies such as automated driving software and infotainment systems. Changan Automobile and Mercedes’ Chinese partner BAIC are among its partners. 
• The other is “Smart Selection,” in which Huawei not only provides technologies but also sales channels while gaining control over vehicle development. Aito has been the biggest success story under this approach, followed by the recent launch of Luxeed between Huawei and Chery. 

Details: According to Zhang, Huawei will adopt the HI approach with Dongfeng, mainly selling the carmaker components and software, and will probably not go into as much depth as it did with Seres. 

• This would allow Dongfeng, controlled by the State-owned Assets Supervision and Administration Commission, China’s state asset regulator, to maintain control of its premium EV brand, Zhang said. 
• As more EVs embrace cutting-edge technologies, an automated driving system powered by Huawei could be a big selling point for Voyah, elevating it above other brands. The tie-up could see the companies share development and marketing costs, Zhang added. 
• In a Monday announcement (in Chinese), Huawei and Dongfeng said they will move forward with the large-scale adoption of intelligent technologies with the joint development of new cars, without giving further details. 

Context: Huawei has been working on the spin-off of its automotive business unit for several months. The company in November announced plans to establish a joint venture with Changan, stating that other existing partners such as Seres have been invited to invest in the new entity. 

• Voyah posted significant growth in sales last year with deliveries of 50,552 vehicles, compared to less than 20,000 units sold a year earlier. The automaker in August launched a revamped version of its Free mainstream luxury crossover with a starting price of RMB 266,900 ($36,532) featuring Baidu’s automated driving assistance system.

Geely on Jan. 5 launched the first battery electric sedan under its mainstream luxury marque Galaxy, which the Chinese automaker hopes will take the crown from the likes of the BYD Han to become China’s best-selling model in the mainstream sedan segment. 

“We are aiming to see the Galaxy E8 take pole position as a top-seller against the backdrop of increasing competition in the Chinese mainstream car segment,” Jerry Gan, chief executive of Geely Automobile Group, said in an interview after the launch event (our translation). The company did not provide specific sales targets, citing fluctuations in the market. 

Volvo’s parent is looking to carve out a significant piece of China’s increasingly crowded medium-to high-end car segment. Approximately 65% of the new EV models debuted at November’s Guangzhou Auto show were priced between RMB 200,000 and RMB 300,000, including the Galaxy E8, its sibling Zeekr 007, and BYD’s Sea Lion, Jefferies analysts wrote in a research note dated Nov. 28. 

BYD’s Han was 2023’s most popular electric sedan in the price segment with sales of more than 200,000 units. Geely posted sales of 83,497 vehicles under its Galaxy marque as of December, after deliveries began last June. It began deliveries of the E8 on Jan. 5 and has two other plug-in hybrid models for sale in the lineup, the L7 crossover and the L6 sedan, priced from RMB 138,700 and RMB 115,800, respectively. 

Below are five key factors that Geely hopes will carry the Galaxy E8 sedan to success:

Pricing: The Galaxy E8, a five-meter-long flagship sedan, starts at RMB 175,800 ($24,612), which is RMB 34,000 below the base price of the BYD Han EV, and RMB 6,000 lower than the smaller, hybrid Toyota Camry. Its all-wheel drive version is priced at RMB 228,800 and additionally features an 800-volt system for fast charging and acceleration from 0 to 100 km/h (62 mph) in 3.49 seconds. 

Smart cabin: Like its homegrown rivals, Geely has packed the luxury-styled but affordably priced sedan with technologies such as Qualcomm’s latest five-nanometer cockpit processor 8295, as well as a massive 45-inch wide 8K dashboard screen made by Chinese display manufacturer BOE. This makes the E8 probably the cheapest model that enables users to play hit gaming titles such as Asphalt in-car. By comparison, the 2025 Toyota Camry hybrid, which started pre-sales at RMB 181,800 in China on Jan. 1, is powered by Qualcomm’s previous 8155P processor. 

Performance: The single-motor E8 has a power output of 200 kW and is equipped with a 62-kilowatt-hour battery pack, offering a driving range of 550 kilometers (342 miles), while the entry-level BYD Han is fitted with a 60.5 kWh battery and a 150 kW motor. The top-end version of the E8 boasts 800-volt fast charging that potentially adds 180 km on a five-minute charge; for comparison, all the variants of the more premium Zeekr 007 offer an additional 610 km from a 15-minute fast charging session. 

Exterior: The capacious midsize sedan comes with a “ripples of light” design element, featuring an aesthetic front end with a 1.1 square foot illuminated graphics area comprising 158 micro-lights that can be programmed to display “over 100 different light shows,” according to Geely. It also has an aerodynamic design with frameless doors and concealed door handles, on  a 2,925-millimeter-long wheelbase, making it slightly larger than the BYD Han.

Satellite assistance: The E8 is one of the incoming models that could provide satellite call services in areas with no cellular or WiFi signal. Geely said it will launch a further 11 telecommunication satellites into low orbit in February, following the successful launch of its first nine satellites more than a year ago, geared towards offering high-precision navigation for its self-driving cars, reported Reuters.

Xiaomi held its most significant media event of the year in Beijing on Thursday: the debut of its first electric car. With a size comparable to the BMW 5 Series and a shape similar to the Porsche Taycan, the four-door sedan boasts some of the Chinese car market’s highest specifications, as cut-throat competition from maturing rivals rises.

The sleek, gadget-full all-electric sedan is aiming to become a top choice for China’s increasingly tech-savvy consumers, and certainly aroused widespread curiosity judging by the more than 46 million people who logged on for the three-hour-long unveiling on the country’s Twitter-like site Weibo. Yet from journalists and insiders alike, the reaction was mixed. 

From the event, TechNode has selected some of the car’s highlights. 

Main specs

The high-performance SU7 can sprint from 0 to 100 km/h (62 mph) in 2.78 seconds, as it climbs to a top speed of 265 km/h. It is claimed to be the world’s most aerodynamic production car with a drag coefficient (Cd) of 0.195. By comparison, the Taycan Turo can hit 260 km/h and Tesla’s Model S has a Cd of 0.208. It also comes just a month after rival Huawei launched the Luxeed S7 sedan at 0.203Cd. 

Xiaomi said it uses two 9,100-ton mega casting press machines to produce the front and rear underbody pieces, giving the car a torsional stiffness of 51,000 Nm/degree, nearly twice the number of the Ford F-150 Raptor and higher than any other car on the road. The technology, first adopted by Tesla, has since been embraced by Chinese EV makers from Geely-affiliated Zeekr to Huawei-backed Aito.

Vehicle autonomy

Xiaomi’s chief executive Lei Jun presented aspects of the company’s self-driving initiative for public viewing, highlighting that the premium version of the SU7 will incorporate two Nvidia Drive Orin processing chips plus a laser sensor unit on the car’s roof to carry out certain partially autonomous driving functions. Xiaomi also showed a short video of the car drawing into a tight garage space autonomously.

The Chinese tech company has set a goal for its advanced driver assistance software to be available to drivers in 100 major Chinese cities by the end of the next year, according to Lei. Huawei and Xpeng Motors are for now the leaders of this booming market, with established carmakers from BYD to Great Wall Motor trying to catch up.

Smart cabin

The SU7 will be the latest Chinese car model powered by Qualcomm’s smart cockpit computing platform SA8295, after the Zeekr 001 FR and its sibling Jiyue 01, and its infotainment system will turn on in just 1.5 seconds. It is also integrated seamlessly into the Xiaomi ecosystem with the adoption of the company’s self-developed operating system, the HyperOS, which takes only 30 minutes or so to carry out important updates, according to the company. 

CEO Lei said the SU7 would create the same smooth experience that anybody with a Mi Phone is used to, as various apps are pushed from their phones to a 16.1-inch in-car dashboard once they sit in the car. Other devices, from tablets to home appliances, also seamlessly work with the vehicle, an integration trend led by auto and tech majors such as Huawei, Geely, and NIO.

Conclusion

Xiaomi will have to pick an appropriate price tag, given it starts with a somewhat broad, unclear positioning, said You Xi, a seasoned economic and financial writer and co-founder of Chinese online media platform Communication Planet. “It remains challenging for the company to extend its brand into EVs,” You added, citing similar offerings from multiple competitors among his reasons (our translation).

The smartphone giant plans to introduce two variants of the SU7 to “contemporary elites with taste in lifestyle and technology” in China over the next few months, said Lei. Some experts have predicted the premium version of the car, with an estimated driving range of 800 kilometers (497 miles), could cost consumers at least RMB 300,000 ($41,124).

Chinese EV maker NIO on Dec. 23 unveiled a long-wheelbase executive sedan model, the ET9,  with a price range of $112,160. The model boasts its own self-driving chip, marking the first utilization of the five nanometer process technology in China’s auto industry. 

The four-door executive flagship, equipped with proprietary technologies such as a sophisticated yet lightweight chassis system and a superfast-charging battery pack, reflects NIO’s commitment to redefining the upper premium vehicle market, William Li, the company’s founder, chairman, and chief executive, told press at the annual NIO Day event on Dec. 23. Li further referred to the target segment as ”a spiritual home base“ for international luxury carmakers (our translation). 

With a pre-sale starting price of roughly RMB 800,000 ($112,160), NIO’s answer to the Porsche Panamera could serve as a low-volume halo car and is scheduled for delivery in the first quarter of 2025. Larger rivals from BYD to Geely have also launched similarly-priced offerings, indicating their aspirations to upscale and grab a slice of the luxury market.

Here are some of the key specifications of the ET9 presented by NIO at the company’s annual gathering held in the northwestern Chinese city of Xi’an. 

Design highlights: Different from old-money cars that Western brands typically offer, the NIO ET9 features a sleek and contemporary look with high ground clearance, large 23-inch wheels, and cutting-edge gadgets such as laser sensors on the roof and sides for an all-round view of the car’s surroundings. 

• The interior boasts a modern design language. The car features an almost two-meter (six-feet) console that extends through the length of the cabin and is integrated with equipment such as a 10L fridge and folding tables, offering passengers first-class-style seats and comfort.
• The grand tourer measures 5.3 meters in length and 1.6 meters in height with a wheelbase of nearly 3.3 meters, making it longer than the Bentley Flying Spur and almost as tall as a regular off-roader. The back seats can be reclined as much as 45° and come with full-body massage programs. 

Autonomous driving: The ET9 will be powered by NIO’s first self-developed system on chip (SoC), the Shenji NX9031, for partially automated driving. NIO stated it will be the first Chinese automaker to use chips with five-nanometer process technology, providing its vehicles a computing power comparable to the combined total of that created by four industry-leading processors. 

• By comparison, NIO’s existing lineups are equipped with four Nvidia DRIVE Orin chips that handle up to 1,016 TOPS on seven nanometers. The purpose-built chip is a strategic move as it could improve processing efficiency and machine learning algorithm coupling for autonomous driving, Jefferies analysts said on Monday. 
• Li declined to provide further details about the semiconductor. Tesla has reportedly turned to Taiwan’s TSMC to produce its next-generation full self-driving (FSD) computer on 4/5 nm processes. Homegrown rivals Li Auto and Xpeng Motors are also developing their own chips for vehicle intelligence. 

Large cylindrical battery: The ET9 will incorporate NIO’s in-house developed, 46105-type cylindrical lithium-ion battery cells. This implies a size of 46 millimeters in diameter and 105 mm in length with a cylindrical shape, a technology also embraced by Tesla in the hopes of increasing ranges and lowering costs. 

• NIO asserts that its new batteries have a cell-level energy density of 292 watt-hours per kilogram (Wh/kg), and a 120 kWh pack can provide a range of 255 kilometers (159 miles) after five minutes of charging at a 5C rate, facilitated by a 900-volt electrical system. By comparison, CATL’s latest Qilin battery would allow Li Auto’s Mega van to cover 500 km on a 12-minute charge at a 5C rate. 
• NIO did not reveal many further details, except for Li’s comments to investors during a Dec. 5 earnings call stating plans to outsource battery manufacturing for reduced investment and improved margins. The EV maker is reportedly in talks with Great Wall Motor-backed Svolt to set up a joint venture for making batteries in its car manufacturing base of Anhui. 

Smart chassis: NIO also launched an intelligent chassis suspension system which the company claimed would provide a refined driving experience featuring a steer-by-wire system, rear-wheel steering, and adjustable suspension altogether for the first time in a mass-produced consumer car.

•  NIO said the so-called SkyRide Intelligent Chassis System, in combination with hydraulic components, could be raised or lowered by 50 millimeters in one second to help passengers in and out of the car. In April, BYD introduced a similar offering that could automatically adjust to different road conditions and driving styles.
• In a 50-second video clip presented by NIO on Dec. 23, an ET9 prototype offered an apparently smooth ride when driving over multiple speed bumps and showcased a four-tier tower of Champagne glasses on the front body panel which remained in place despite the road surface. The flagship sedan is also highly maneuverable with a turning radius as low as 5.45 meters, a record also achieved by Xpeng with its upcoming X9 van.

Huawei is doubling down on electric vehicles with plans to run as many as 800 showrooms in China next year dedicated to the joint car brands that it has launched with manufacturing partners, aiming to become a more visible player in the world’s biggest auto market. 

Why it matters: The new shops, expected to present a broader portfolio with larger spaces compared to Huawei’s current policy of showcasing vehicles in its regular appliance stores, will allow Huawei to display models and arrange test drives for more potential buyers. They will also be part of a branding overhaul to enhance Huawei’s brand image as a major car tech company. 

• Huawei began selling EVs powered by its technologies and manufactured by partners via its sales network for smartphones in early 2021 under its “Smart Selection” approach, in which Huawei reportedly provides sales channels and has more control over vehicle development.

Details: In what could be the tech giant’s fastest period of growth in its history, Huawei is planning to operate 800 car showrooms next year and increase that number to 1,000 in 2025, people familiar with the matter told Chinese media outlet 36Kr. 

• Those new shops will feature a new brand called the Harmony Intelligent Mobility Alliance (HIMA), a collaborative initiative for carmakers and a rebranding of Smart Selection based on Huawei’s proprietary Harmony operating system. 
• Some of the smaller locations could start from 2,500 square meters, allowing six cars to be displayed in-store while also doubling as a delivery center with another six for-sale vehicles in parking spaces outside, according to a franchise disclosure document obtained by 36Kr. 
• Huawei’s preferred flagship stores require a wider area of 8,000 square meters or more, and the company is renovating some existing retail shops to showcase the new HIMA brand with improved layouts, according to the report. 
• Some existing locations do not showcase the newly launched Luxeed S7 due to limited space, the report said. Huawei currently has three models on sale in partnership with Chongqing-based manufacturer Seres and state-owned carmaker Chery. 
• Huawei did not respond to TechNode’s request for comment. 

Context: Sources added that a retail and distribution network of 800 shops next year will be comparable to that of Huawei’s major rival Li Auto, which operates nearly 400 direct-sales stores and 320 maintenance centers as of November. 

• Huawei is quickly expanding its EV lineup in collaborations with existing partners, which also include Changan and JAC. It is set to launch the M9, a full-size sports utility vehicle, with Seres at a price range of between RMB 500,000 and RMB 600,000 ($69,972-$83,966) on Dec. 26. 
• Aito, an EV brand set up by Huawei and Seres in December 2021, delivered nearly 19,000 vehicles in November on the back of strong order volume for its redesigned M7 crossover. It operated a network of 1,000 retail locations and service centers in 230 Chinese cities as of June. 
• Meanwhile, long-time rival Xiaomi is on track to launch its first EV model, the SU7, and is reportedly preparing showrooms for car sales with the first batch of display models expected to arrive early next year.

Volkswagen’s software unit Cariad and Chinese auto tech startup Horizon Robotics expect to recruit 300 employees by the end of this month for a newly established joint venture called Carizon, in an effort to meet growing local demand for advanced driving technology. 

Why it matters: The hiring spree marks the German auto major’s latest effort to develop its own in-vehicle software following an announcement last year of a $2.3 billion investment deal for a 60% stake in the JV in partnership with Horizon. 

Details: The two companies have not officially provided details of the recruitment plan, but Horizon’s co-founder and technology chief Huang Chang, leading a team of more than 100 engineers, has reportedly joined the JV. 

• Su Jing, a former head of Huawei’s autonomous driving team who has been on board at Horizon since earlier this year, will lead the development of advanced driving systems based on Horizon’s next-generation computing solution Journey 6. 
• Beijing-headquartered Carizon was officially set up on Nov. 20 with a registered capital of RMB 6.8 ($940 million), with VW and Horizon taking 60% and 40% stakes in the entity respectively, according to Chinese corporate data site Tianyancha.
• The JV will focus on rolling out automated driving technology powered by Horizon’s Journey series processors and integrated into VW’s upcoming battery EVs in China, according to an announcement dated Dec. 8. 
• VW and Horizon are on track to deliver their first collaborative development effort as early as 2025, Cariad China’s chief executive Chang Qing told Chinese reporters last month. This will allow VW vehicles to function independently on Chinese highways and certain urban streets, a feature popular with Chinese consumers.

Context: VW has made a series of moves to step up the pace of its software development for the Chinese market, including a $700 million deal for a 5% stake in Chinese EV maker Xpeng Motors unveiled in July.

• The German carmaker is also forming a JV with China’s ThunderSoft to improve its infotainment systems and car cockpits, Reuters reported in April, while partnering with smartphone maker Vivo on a similar effort.
• VW sold roughly 2.3 million cars in China for the first nine months of 2023, recording a year-on-year decline of 3%, of which roughly 117,100 units were EVs, up 3.9% from a year ago. It delivered 341,100 EVs in Europe over the same period, an increase of 60.9% from last year.
• Horizon said in April it has shipped more than 3 million computing solutions for over 120 car models from prominent Chinese automakers ranging from BYD to Geely. Self-driving startups such as Pony.ai and Qcraft are developing assisted driving technology based on its processors.
• US chip powerhouse Nvidia is also ramping up its self-driving car efforts in China with plans to expand its workforce locally after recently hiring Wu Xinzhou, a former vice president at Xpeng Motors, TechNode has reported.
• Speaking to Chinese media outlet LatePost in July, Wu said that foreign companies would need to establish research and development teams of “at least several hundred people” locally to be able to compete with Chinese carmakers and self-driving car companies (our translation).

More Chinese automakers are planning to adopt NIO’s battery swap technology as two giants join the program – Changan and Geely. NIO on Wednesday said it will partner with Geely to develop a common standard for electric vehicle battery packs and create a sprawling network of swap stations for both consumer cars and commercial fleets, just a week after Changan said it had become NIO’s first ally in a similar effort. 

The move could give a further boost to NIO’s long-term plan to split its money-losing recharging infrastructure unit into a standalone business with financing from outside investors, two people with knowledge of the matter told TechNode on Wednesday. Meanwhile, Geely and NIO will explore the possibility of establishing a shared battery swap network in overseas markets, said one of the people, without elaborating further. 

NIO and Geely declined to comment when contacted by TechNode on Thursday, referring instead to the announcement published by the two companies.

Car industry experts foresee the acceleration of the Chinese EV industry’s migration to a more unified standard for battery specifications and swap techniques originated by NIO. Still, the EV maker and its bigger allies could face a bumpy road despite their eagerness for a unified swapping standard until a number of business and technical hurdles are cleared. 

A common standard? 

It is clear that Chinese authorities are behind the move given that Changan is state-owned and given Geely’s position as the poster child for the Chinese privately-owned car industry, said Lei Xing, former chief editor at China Auto Review. Xing expects no real progress to be made within the next 12-18 months given the challenges in achieving a clear consensus for designing new batteries compatible with their recharging networks. 

A market-wide standardization may also not happen without government intervention. It’s one thing to require a certain plug type, and quite another to force standardization of batteries and chassis configuration, said Daniel J. Kollar, head of automotive and supply chain at business development consultancy Intralink Group. 

“This could have major effects on several design aspects and possibly even lead to certain limits on innovation and supplier choice,” Kollar added.

NIO may also find the need for considerable back and forth with its partners in order to get its swap technology closer to becoming the industry standard. It’s going to be NIO dictating its intellectual property to swapping partners, but Geely and Changan may want to have a say as well, said Tu T. Le, founder of business intelligence firm Sino Auto Insights. 

“There’s a lot that needs to be settled still,” Le added, citing Geely running its own swapping system as one reason. Volvo’s parent began operating its first battery swap station for commercial fleets in the southwestern municipality of Chongqing in late 2020, with plans to run 300 more by the end of this year.

A big relief?

Although it is too early to predict where NIO’s power business may end up, it is possible that a new entity jointly invested in by NIO and multiple other carmakers could be in play – something akin to what Huawei recently announced for its vehicle business unit, according to Xing. “This would ease the financial pressure on NIO and make them de facto outside investors of the startup.” 

The partnership would probably shoulder some of the investment burden for NIO with cash injections, although it may not help them sell cars, Le said. The increase in adoption of swapping will likely result in short-term improvements to their bottom line, but the big question is if it will result in more vehicle sales. 

The Shanghai-headquartered EV maker has built up a nationwide network of more than 2,100 swap stations, each reportedly costing more than RMB 3 million ($420,000) on average. That number is expected to surpass 2,300 by year-end. It delivered 126,067 vehicles for the first ten months of this year, in line with the industry’s average growth rate but lagging behind rivals such as Li Auto. 

“It’s hard to see how this is going to change NIO’s fortunes in the long run to a significant degree without added help from their new partners – either via providing a boost to their marketing reach or supporting the development of mid-market solutions,” said Kollar.

Huawei is spinning off its automotive business unit, enabling Changan Automobile and other manufacturing partners to invest, in a move aimed at turning the loss-making car division into a profitable operation amid fierce competition. 

Why it matters: The reorganization is a rare move for Huawei – a company under 100% ownership of founder Ren Zhengfei and its staff since 2003, according to its official website – as the Chinese telecommunication giant puts a date of 2025 on its target of profitability for its as-yet loss-making auto business. 

• Deemed by Citic Securities analysts as “a milestone” for the Chinese auto industry, the move is expected to help Huawei court new industry allies and gain investment to pursue intelligent vehicle technology. Established automakers such as SAIC have reportedly voiced concern about Huawei’s move into electric cars. 
• The equity structure of the new entity may be comparable to that of the United Automotive Electronic Systems, a joint venture formed by German auto supplier Bosch and several Chinese carmakers including SAIC, FAW, and Dongfeng in 1995. This would allow more automakers to benefit from collaboration, and not just Changan, analysts wrote in a Nov. 26 note. 

Details: The new joint venture will focus on areas already covered by Huawei’s Intelligent Automotive Solution (IAS) business unit, including the development of intelligent driving software, digital cockpit systems, and digital platforms, among others, according to a regulatory filing published by Shenzhen-listed Changan dated on Monday. 

• Huawei will take at least a 60% stake in the new entity but will no longer directly compete against the new company in principle. Changan and its relevant parties will acquire no more than a 40% stake in the JV. The two companies plan to discuss the details of the transaction and sign an agreement within six months, the filing said. 
• The establishment of the new entity will have no impact on the ongoing collaboration between Huawei and Chinese car manufacturer Seres, according to a Nov. 26 statement. Seres, which makes Aito-branded EVs for Huawei, added it has been asked to participate in the investment and is in discussions to jointly develop intelligent electric vehicle architecture.
• The entity will prioritize diversified ownership, said the filing. It is anticipated that various parties will engage deeply in the development of the open vehicle platform, said Richard Yu, CEO of Huawei’s consumer business group and chairman of the IAS BU, who compared the platform to “a train engine.” 

Context: Huawei, state-owned Changan and Chinese battery maker CATL announced a partnership to establish EV brand Avatr back in late 2020. The companies have sold roughly 20,000 units of the Avatr 11 battery electric crossover since delivery began last December, launching their second premium model with a starting price of RMB 300,800 ($41,240) earlier this month. 

• Huawei has also been selling EVs since mid-2021 with lesser-known Seres, formerly the Chongqing Sokon Industrial Group, followed by the launch of the first Aito-branded EV last September. Huawei said in early October that it had secured more than 50,000 non-refundable orders for the redesigned version of the M7, Aito’s second model, less than a month after its launch. That number was updated to more than 100,000 as of Monday.
• The Chinese tech giant is also partnering with domestic manufacturers Chery, BAIC, and JAC, showcasing the first model under the new Luxeed marque jointly set up with Jaguar Land Rover’s manufacturing partner Chery on Nov. 9. The Luxeed S7 sedan will be officially launched on Tuesday and the respective new models co-built with BAIC and JAC are set to hit the market in 2024. 
• Huawei reportedly invested $1 billion in its automotive business in 2021 and has since maintained its push into the Chinese intelligent EV market in an effort to diversify its revenue sources and offset the impact on its core businesses from US trade restrictions. The IAS BU recorded revenue of RMB 1 billion during the first half of this year, accounting for around 0.3% of its total revenue. 

READ MORE: Xpeng and Huawei-backed EV maker set new delivery records as demand grows for self-driving tech

As automakers continue their struggle amid an unrelenting price war in China, both established brands and startups are showcasing their latest products at the Auto Guangzhou 2023 show in a bid to take pole position ahead of what promises to be another year of tight competition. 

Traditionally one of the country’s largest car shows, this year’s Auto Guangzhou offers a glimpse of how intense competition in China has been, and how successful it has been at flushing out weaker foreign marques as domestic rivals fall over one another in a mad rush to crack the market. 

“Joint car manufacturers are faced with unprecedented challenges against the backdrop of the current situation,” said Wen Dali, a deputy general manager of GAC-Toyota, a joint venture between the Japanese automaker and its Chinese partner (our translation). More than 20% of the JV’s new car sales over the next three years in China are set to be new energy vehicles, mostly battery-run electric vehicles (BEVs) and plug-in hybrid EVs (PHEVs), Wen added at a press event on Friday. 

Here’s a quick roundup of some of the highlights from the Guangzhou International Automobile Exhibition, which kicked off on Friday in the capital of China’s Guangdong province. 

BYD – Sea Lion 07

The BYD Ocean family of electric cars on Friday welcomed a new sibling and its latest answer to the Tesla Model Y, the Sea Lion 07, crafted by Wolfgang Josef Egger, BYD’s design chief and a former head designer at Audi Group. 

The mid-size crossover boasts distinctive design elements with its muscular fenders, bold air inlets, and clean character lines on all four corners, while the high shoulder lines and the dual, through-type waistlines give the vehicle a sporty vibe. The features are intended to make the car look unique from miles away, Fan Jihan, a deputy director of BYD said on Friday during the show.

Slightly larger than Tesla’s Model Y at 4.8 meters in length and with a 2,900-millimeter-long wheelbase, the top-end all-electric car is expected to have a driving range of more than 700 kilometers (435 miles), compared with the 688 km claimed by the long-range version of its US rival. Scheduled for official launch later this year, it will be equipped with BYD’s latest advanced driver assistance system (ADAS), according to the company.

Geely – Zeekr 007 

This year’s Auto Guangzhou saw the debut of the long-awaited Zeekr 007, the first electric sedan under the premium marque of auto major Geely. 

The latest model from Stefan Sielaff, formerly a head of design at Bentley, the 4.9-meter-long all-electric vehicle comes with 1,711 high-intensity lamp beads powered by 75 automotive chips. This enables the car’s LED headlights to display a dazzling, customized lighting sequence with animation about 90 inches wide, showcasing some of the most advanced lighting technology by a Chinese carmaker. 

Meanwhile, the Zeekr 007 features an 800-volt battery system, which offers a driving range of up to 870 km on a full charge and can travel another 610 km on 15 minutes’ extra charge. Zeeker claims it to be the quickest accelerating road car of the same class ever made, going from 0 to 100 km/h (62 mph) in 2.84 seconds, while also being one of the earliest models to use Qualcomm’s latest 5-nanometer cockpit chip 8295. 

The company aims to begin delivering the car in January at a lower-than-expected pre-sale starting price of RMB 224,900 ($31,059). 

Xpeng Motors – X9

Xpeng on Friday was on its home court when it unveiled details of its first flagship multi-purpose vehicle (MPV) the X9, which the Guangzhou-headquartered electric vehicle maker expects will stand out from existing offerings with superior comfort and top-notch performance. 

With a competitive pre-sale starting price of RMB 388,000 ($53,544), the seven-seater has a claimed interior space of 7.7 square meters, which makes it 12% bigger than the Toyota Alphard, a worldwide top-seller in the chauffeur-driven luxury people mover category, according to chief executive He Xiaopeng. 

The family van is also said to have the best third-row seats on the market that can be adjusted for recline to a desired angle of nearly 180 degrees and folded down flat to increase cargo capacity. Meanwhile, the luggage compartment offers space for seven suitcases. 

The Xpeng X9 is claimed to be the world’s first MPV equipped with rear-wheel steering as a standard configuration, which reduces the car’s turning diameter to an industry record of 10.8 meters (35.4 feet), making it easy to maneuver. 

Li Auto – Mega

Li Auto has finally made available the details of its long-anticipated MPV, the Mega, with an exterior echoing the bullet-style look of China’s high-speed trains. The seven-seater van boasts the world’s fastest charging speed among electric vehicles of all kinds, capable of traveling up to 500 km on 12 minutes of charge powered by CATL’s next-iteration Qilin batteries. 

It has a drag coefficient (Cd) of 0.215, which the company claimed is the lowest Cd rating for an MPV, while it will consume 15.9 kilowatts (kWh) of electricity for every 100 km of travel, also among the lowest in the industry. 

The company, which has delivered more than 500,000 plug-in hybrid SUVs as of September, confirmed plans to build 300 supercharging stations in China by year-end. Pre-sales of the Mega started on Friday with a price tag of around RMB 600,000 ($82,800) and delivery scheduled for February 2024.

READ MORE: Chinese carmakers showed up big time at Auto Shanghai 2023

Images of what could be Xiaomi’s first electric vehicle model have leaked online ahead of the car’s expected launch next year. The photos from the Chinese Ministry of Industry and Information Technology show a large sedan with styling similar to the Porsche Taycan, adorned with a Xiaomi logo. 

Why it matters: Automakers are required by Chinese regulators to apply for registration before officially selling vehicles in the country, and the government ministry’s post indicates that the debut of the first Xiaomi car is approaching. 

• Xiaomi has begun trial production of its first EV at its facility on the outskirts of Beijing, with the vehicle expected to hit the market as early as February, a person with knowledge of the matter told Chinese media outlet National Business Daily on Wednesday. 
• A Xiaomi representative declined to comment when contacted by TechNode on Thursday, but in late October, chief executive Lei Jun reaffirmed the company’s plan for the car to go on sale in the first half of 2024, according to an Oct. 25 post published on the Twitter-like platform Weibo. 

Details: The Xiaomi SU7 is around five meters long and spans a 3,000-millimeter-long wheelbase, making it bigger than many mid-size sedans such as Tesla’s Model 3. It has a total mass of 2,430 kg and a curb weight of 1,980 kg, based on the registration details revealed by the MIIT on Wednesday. 

• The car features a sleek, athletic low profile with Xiaomi’s logo on the front and its name on the rear hatch, similar to the Porsche Taycan, a likeness brought to light by a Chinese auto influencer. The images also show a couple of wheel options and a choice of yellow brake calipers.
• The SU7 will be able to reach a top speed of 210 kilometers per hour on a relatively affordable, iron-based lithium-ion battery from BYD. The top speed of the premium SU7 Max will be 265 km/h, with the higher-end model equipped with a more expensive, nickel and cobalt-based battery pack from CATL. 
• An electric motor will provide a power output of 275 kW and 220 kW respectively, while the top-end version will integrate laser sensor units on the roof to enable partially autonomous driving capabilities, according to images released by MIIT.
• The five-seater sedan will be manufactured at Xiaomi’s factory in the Beijing Economic and Technological Development Zone, which has an initial annual capacity of 150,000 units, although its production application was filed in the name of a subsidiary of state-owned automaker BAIC.
• This appears to confirm speculation that BAIC, a manufacturing partner of Mercedes-Benz in China, has joined hands with Xiaomi, meaning the smartphone maker is still waiting for final approval to begin manufacture from the Chinese authorities. 

Context: Xiaomi and Huawei are among the Chinese technology giants with the potential to become major players in the EV space with advanced intelligent capabilities and a broad sales network, which remain difficult for many carmakers to replicate, Morgan Stanley analyst Tim Hsiao commented on an earnings call held by Xpeng Motors on Wednesday. 

• Huawei said on Oct. 6 that it had secured over 50,000 non-refundable orders for the revamped M7 sports utility vehicle less than a month after its launch. The number was updated to more than 90,000 as of Wednesday, local media outlet IT Home reported. 
• The telecoms giant started pre-sales of the first electric sedan under the new Luxeed brand with automaker Chery on Nov. 9, followed the next day by the launch of the Avatr 12, a premium crossover co-developed with partners Changan Automobile and CATL. 

READ MORE: Five things to know about Xiaomi’s new electric car company

Huawei on Thursday revealed its first electric sedan under the new Luxeed marque in collaboration with automaker Chery, saying it will compete with Tesla and Mercedes Benz’s premium offerings at a price comparable to the cheapest models of its international rivals.

“After some deliberation, we will make all versions of the Luxeed S7 available for purchase despite making a loss,” Richard Yu, the chief executive of Huawei’s consumer business group, told the media during a press conference in Shenzhen (our translation). This will allow more customers to try Huawei’s smart vehicle technology at an affordable price, said Yu.

The aggressive pricing strategy unveiled at the Luxeed S7’s launch marks the latest push by the Chinese technology giant to crack the world’s biggest and most competitive electric vehicle market. Huawei hopes it will be a new revenue source to offset the negative impact of US restrictions on its smartphone business. 

Here’s what we know about the newly-launched Luxeed S7 sedan:

Pricing: The sedan comes at a minimum price of RMB 258,000 ($35,381), RMB 2,000 lower than Tesla’s entry-level Model 3 in China. Pre-sale started on Thursday and the official launch is scheduled for Nov. 28.

Automated driving: The Huawei-Chery electric sedan is the first model to use the tech giant’s latest proprietary Harmony operating system. Its autonomous valet parking feature enables the car to park itself in lots and then return to a designated spot using a remote-control assisted function.

The premium versions of the Luxeed S7 will include Huawei’s laser sensor units and its Advanced Driving System (ADS) that uses deep learning networks and computer vision algorithms, including one called the General Obstacle Detection network, for navigating its surroundings. 

Huawei has claimed its partially autonomous driving technology will be accessible on major city roads across China by the end of the year, potentially ahead of rivals including Xpeng Motors. 

Main specs: Yu specifically identified Tesla’s Model S as Huawei’s major competitor, claiming that Huawei and Chery’s full-size luxury sedan outperformed its rival’s in terms of range, energy efficiency, and luxury. 

The top-end Luxeed S7 will have a driving range of more than 800 kilometers (497 miles) and be capable of driving another 400 km on 15 minutes of supercharging using Huawei’s facilities. By comparison, the dual-motor Tesla Model S has a 715 km range and can add 347 km in 15 minutes. 

The car also impresses with high energy efficiency, consuming an estimated 12.4 kWh per 100 km, compared with 13.2 kWh and 17.5 kWh achieved by the rear-drive Model 3 and the dual-motor Model S respectively. “This is far ahead of our rivals,” said Yu, using a phrase that has become a Huawei-related buzzword on the Chinese internet. 

The S7 slightly beats out the Model S with a drag coefficient of 0.203. Meanwhile, it offers a 0 to 100 km/h (62mph) acceleration of 3.3 seconds, just under the 3.1 seconds reported by the Model S performance version but faster than the Porsche Taycan 4S, according to Yu. 

Interior: The sleek, aerodynamically favorable sedan boasts of a larger cabin space than its major luxury competitors with an interior length of 1,910 mm. The Mercedes E300L and the Tesla Model S measure 1,898mm and 1,816mm in interior length respectively, according to figures cited by Huawei during the press conference. 

The S7 also comes with a sporty design concept for the inside, featuring a wide dashboard, a 12.3-inch smart screen, as well as an oval-shaped steering wheel, allowing drivers to see the whole display, rather than having to view it through the steering wheel. 

In addition, it has adopted so-called zero gravity seat technology for the front passenger seat. This allows the human body to take on a neutral spinal posture, reducing the amount of stress placed on bones and joints, while the backs of the rear seats are heated, ventilated, and 27/32° adjustable.

READ MORE: Huawei-backed Aito now has 50,000 orders for its redesigned M7 model

Xpeng Motors said on Nov. 3 that it will offer some existing owners of its P5 sedan discounts on new purchases after hundreds of customers accused it of failing to deliver promised advanced driver assistance features, which were supposed to be available across the country. 

Why it matters: The complaints, which went viral on Chinese social media last week, mounted after Xpeng on Oct. 24 unveiled plans to roll out its latest advanced driver assistance system (ADAS), the XNGP, nationwide by next year. The company said it will be applicable to existing models including the G6, G9, and P7i, without mentioning the P5. 

Details: Xpeng said in a statement issued on Nov. 3 that it will offer an RMB 20,000 ($2,747) coupon for people who have subscribed to Xpilot, its previous generation driver-assist software, along with their purchases of the premium version of the P5 sedan. The benefit could be used for a new purchase of one of Xpeng’s most popular models, including the G6, G9, P7i, or its upcoming X9 van. 

• The announcement comes after more than 700 P5 owners recently published an open letter, obtained by National Business Daily, asking the company for an explanation as to why its partially autonomous feature for urban driving has remained unavailable to them in most domestic cities, despite the company’s promises.
• Xpeng further explained that the availability of its previous-generation ADAS feature “relies heavily on” high-definition maps, which has reportedly required automakers to secure approval for using mapping data in their vehicles, partly resulting in slow progress in adoption (our translation). 
• The EV startup released the so-called City Navigation Guided Pilot (NGP) function first to Xpilot users in the city of Guangzhou last September and has since expanded the adoption to five major cities including Beijing, Shanghai, and Shenzhen. 
• “We will strive for more new features and improved user experience, despite many challenges,” Xpeng said in the statement, adding that more functions will be available to P5 owners through over-the-air updates next year, including steering assist and more music streaming apps. 

Context: Xpeng began delivery of the P5 electric sedan back in October 2021, with its premium versions featuring two lidar sensors to facilitate more reliable automated driving functions at a price range of between RMB 199,900 and RMB 223,900 ($27,453-$30,749). It sold 19,618 units of the car over the last 12 months, according to figures from the auto services portal Dongchedi.

• The automaker is shifting to a more affordable approach for autonomous driving, which will reduce its reliance on technologies such as lidar and HD maps as part of a plan to roll out its XNGP system in 50 domestic cities by December. 
• The Xpilot system, formerly Xpeng’s rival to Tesla’s Autopilot system as reported by CNBC, is unavailable for driving scenarios without the support of HD maps, according to a Q&A document published by the company last November.

Chinese electric vehicle makers Xpeng Motors and Aito on Wednesday posted record-breaking figures for monthly deliveries, as the pace of adoption of self-driving technology accelerates among local customers despite slowing growth in China’s electric vehicle segment as a whole. 

Strong orders for Huawei, Xpeng, and DJI’s city NOA (Navigation on ADAS) products mark the start of the commercialization of smart driving, Jefferies analysts wrote in an Oct. 24 note. They added that Chinese automakers are becoming more willing to “test the waters” with chips by Huawei on some of their vehicles.

Why it matters: The latest figures highlight a brutal price war that has been continuing for months in the market, and the struggle automakers are facing in having to choose between lower prices or losing market share. 

• Xpeng in June unveiled the G6, its crossover answer to Tesla’s Model Y, at a price tag 20% lower than its US rival in China. Aito’s all-new M7 sports utility vehicle now costs RMB 40,000 ($5,468) less than the version launched a year ago.

Riding the self-driving boom: Xpeng Motors handed over 20,002 electric cars to customers in October, crossing the 20,000 unit milestone, nearly a threefold increase from a year ago and  31% growth from September. 

• Aito also reported a record delivery number of 12,700 units last month. The Huawei-backed brand does not report its delivery figures consistently, but its Shanghai-listed manufacturer Seres posted sales of 40,389 EVs for the first nine months of the year. 
• The two companies appear to have taken an early lead in an emerging battlefield for partially autonomous technology among consumer carmakers. More than half of the orders of Aito’s redesigned M7 SUV were placed for versions with Huawei’s Advanced Driving System, Chinese media outlet Caixin reported on Oct. 7, citing company insiders. 
• The Max versions of Xpeng’s G6 crossover, which features the company’s XNGP assisted driving technology, accounted for 70% of total orders in the first month after the launch, chief executive He Xiaopeng said in August. Both companies said their vehicles would be able to travel autonomously most of the time in dozens of major Chinese cities by the end of the year. 

EV startups: Li Auto also accomplished a delivery milestone last month, distributing 40,422 vehicles, making its year-to-date deliveries 284,647 units, the highest among the country’s nascent EV startups. The company has upped its goal to 50,000 units for the remaining two months of the year, CEO Li Xiang said on Wednesday on the Chinese Twitter-like platform Weibo.

• NIO’s October delivery of 16,074 units represented a 59.8% growth from this time last year and a slight 2.8% increase month over month. The company has delivered 126,067 vehicles as of October this year, still far from the annual goal of 245,000 units revealed by CEO William Li in March. It is now aiming for monthly delivery of more than 20,000 units in the fourth quarter of 2023. 
• Leapmotor’s delivery of 18,202 EVs last month comes after the Zhejiang-based EV maker recently announced a deal with European major Stellantis for a $1.6 billion war chest and turned its negative gross margin into a positive for the past quarter. Rival Hozon delivered 12,085 units, representing a decrease of 32.9% year-on-year and 8.5% month-on-month. 

Established majors: BYD’s growth momentum continued to some extent in October as the company saw sales surpassing 301,000 vehicles with a mild 5.2% rise from a month earlier. Analysts expect China’s biggest EV maker to achieve its annual goal of selling 3 million cars this year, as the company on Monday launched a wagon version of its popular Song SUV and readied to sell its long-anticipated Bao 5 off-roader.

• Sales for Aion declined 19.6% from a month earlier to 41,503 units, as the GAC subsidiary ramps up production of its new models, company insiders told financial media outlet CLS. Changan-affiliated Deepal delivered 15,513 vehicles in October, a 10.7% decrease from September. 
• Zeekr delivered 13,077 vehicles last month, up 29.2% from a year ago and 8.5% from September. On Aug. 11, the two-year-old premium EV brand, set up by Volvo parent Geely, cut the price of its 001 hatchback by up to RMB 37,000 to RMB 269,000 for a limited period until the end of this year. 
• Voyah saw its deliveries grow 21% on a monthly basis in October after the Dongfeng-backed EV maker launched its redesigned Free SUV in August, with the model arriving 15% cheaper than the previous version and equipped with Baidu’s advanced driver-assist system. 

Context: Retail sales of new energy passenger vehicles, including all-electrics and plug-in hybrids, are expected to reach 750,000 units in October, up 34.6% year-on-year and 0.9% month-on-month, according to estimates from the China Passenger Car Association. The past two months, known as “Golden September, Silver October,” are traditionally peak seasons for auto sales in China.

Chinese automaker Geely on Oct. 27 unveiled its biggest bet ever on intelligent vehicles with the launch of the first Jiyue-branded model, which the company says is capable of driving itself on busy urban streets in partnership with search engine Baidu. 

The automaker stated its vehicle relies heavily on a camera-based approach to capture detailed visual information and then respond appropriately, removing expensive laser sensors from its hardware suite to keep costs down. Tesla is reportedly a rare advocate for using the so-called vision-only approach, while most other brands opt for multiple sensors to mitigate safety concerns of their self-driving technologies. 

“I believe we provide users a better self-driving experience [than existing players] in most major Chinese cities,” Luo Gang, Jiyue’s chief operating officer, told reporters during an interview, adding that the Jiyue 01 outperforms Tesla’s offerings in digital services such as its AI assistant (our translation). Tesla’s full self-driving (FSD) function is currently unavailable in China. 

The Jiyue 01, a battery sports utility vehicle, comes in two versions with a price range between RMB 249,900 and RMB 339,900 ($34,148-$46,446), slightly lower than its pre-sale price and differing based on acceleration, driving range, and number of electric motors, among other specifications. Customers are also encouraged to pay RMB 19,900, a 60% cut from its sticker price, for all the premium functions of its self-driving software. 

Here are some of the news and highlights from the launch event held in Shanghai by Jiyue, formerly known as Jidu before Geely and Baidu set up a new venture in August. 

Self-driving tech: Jiyue said its advanced driver-assistance system, the Robo Drive Max, is already available to drivers in Shanghai, Hangzhou, and Shenzhen, meaning the cars can navigate complex urban streets in the three big cities with autonomous features such as overtaking, lane changing, and on-ramp/off-ramp driving. The firm is targeting nationwide availability for the software by 2024, which would mean it matched rival Xpeng. 

• Chief executive Joe Xia claimed the car could drive itself from point to point without many user interventions by using less costly high-definition maps and training multiple neural networks such as occupancy networks in big data sets, rather than relying on lidar. Rival Xpeng is also removing two radar sensors for its upcoming MPV model but retaining lidar technology for enhanced safety, TechNode has reported.
• The five-seater Jiyue 01 is equipped with 11 cameras and 17 ultrasonic sensors and radars. The company believes it is building public confidence in autonomous car safety, as Baidu has tested its autonomous car fleets without accidents for more than 70 million kilometers (43.5 million miles). Baidu has been handling various corner cases over the past decade, which greatly improves the safety of the system, said Luo. 

Smart cabin: The Jiyue 01 also boasts the most advanced voice recognition software on the market for in-car services, which can respond intelligently in milliseconds without losing its connection, as the company deploys artificial intelligence models and moves data analytics from cloud computers to the vehicle. The system is also set to evolve and become more alert to the needs of its owners, powered by Baidu’s ChatGPT-like chatbot, Ernie Bot. 

• Notably, the automaker is bringing voice activation outside the car, saying it is the world’s first model that allows autonomous valet parking via just a spoken command without the driver sitting in the car, from as far as two kilometers away, according to an announcement. A company employee demonstrated the feature with several reporters joined by TechNode in an indoor parking lot on the sidelines of the event. 
• Xia added that the vehicle’s in-car system is powered by Qualcomm’s most advanced smart cockpit computing platform, the SA8295, which provides a processing power of over 60 trillion operations per second (TOPS), compatible with that of flagship smartphones available on the market. This would allow users to play the hit racing game Asphalt with a 35.6-inch display across the dashboard, as would NIO owners do with their handsets and a smaller screen. 

READ MORE: Baidu’s EV firm Jidu aims to take on Tesla

Xpeng Motors teased how it sees the future of electric vehicles on Tuesday with the debut of its first multi-purpose vehicle model and a new timeline for the expansion of its self-driving software, as it faces an unprecedented offensive from major rivals like Huawei in a hotly competitive battleground.

Chief executive He Xiaopeng also revealed that the company has made significant progress in bringing flying cars closer to reality, while showcasing a working prototype of its humanoid robot, in a move reminiscent of Tesla’s introduction of its Optimus bot last September. 

Here are the key highlights from Xpeng’s annual 1024 Tech Day event. 

First MPV 

Navigating within a sharp and narrow turn at low speed on the stage at Tuesday’s event, Xpeng’s X9 is claimed to be the world’s first multi-purpose vehicle model equipped with rear-wheel steering as a standard configuration. This would allow the seven-seater, three-row van to handle “just like” a regular-sized sports utility vehicle, said He (our translation). 

Xpeng’s next-generation smart cabin system, the XOS, will also be available first to the owners of the X9, which is set to be formally launched at the upcoming Guangzhou Motor Show on Nov. 17. Powered by Qualcomm’s five-nanometer 8295 processor, the in-car software will offer a split screen mode, allowing drivers and passengers to run different applications simultaneously side-by-side for efficient multitasking.

Marking Xpeng’s entry into the Chinese MPV segment, the all-electric X9 will have to compete with an increasing number of similar offerings by established makers including BYD’s Denza brand, Great Wall Motor, and Dongfeng’s Voyah marque. Huawei-backed Aito and Li Auto are also set to launch their first MPVs later this year, targeting China’s growing three-generation families with larger interior car spaces.

Self-driving availability

Xpeng has also begun its switch to a more affordable hardware suite by removing some sensors from its incoming X9 model, betting more on cameras and artificial intelligence for its XNGP advanced driver assistance system, according to He. 

The Chinese automaker has updated its self-driving technology with what it described as some of the most advanced occupancy networks in the industry, comprising a deep neural network that reconstructs barriers and vehicles and predicts occupancy in a three-dimensional space for collision avoidance. 

A similar move has allowed Tesla to remove several ultrasonic sensors from its vehicles while enabling high-definition spatial positioning, longer range visibility, and the ability to differentiate between objects with its Full Self-Driving Beta software, which was announced by the US automaker last October. 

CEO He said Xpeng will deploy its XNGP system for urban traffic roads in 50 cities by December and make the functions available to drivers across China and Europe by 2024. It is competing with Huawei, which has quickly emerged as a rising player in the industry and previously announced a nationwide roll-out of similar features by year-end, while rivals BYD and Li Auto are playing catch-up.

Flying cars and robots

Experimenting with different approaches around flying cars, Xpeng also showcased two prototype aircrafts, or electric vertical takeoff and landing vehicles (eVTOLs). One of them boasts a two-in-one design that can fold up its wings and other components into the vehicle body, although He acknowledged that there are still some safety issues to be addressed. 

The 46-year-old serial entrepreneur sees greater potential for the commercial adoption of the other prototype, which is built on a modular system allowing the separation of the flight and automobile components. This model has a spacious interior with five seats while on the road and is powered by an extended-range hybrid engine, which can also recharge its aircraft component as it drives; up in the sky, the model is capable of carrying two passengers in an all-electric mode.

Xpeng further surprised the audience on Tuesday as its humanoid robotic prototype, the PX5, made its first public appearance. The company showcased the robot’s ability to navigate different terrain and pick up hand-held objects such as pens in a video. He envisions a near future where such AI machines could help look around in its factories or even mingle with customers at showrooms, hopefully by this time next year, he added.

Aito, a Chinese electric vehicle brand backed by Huawei, has received more than 50,000 non-refundable orders for its redesigned M7 in less than a month. The orders follow the Sept. 12 public launch of the sports utility vehicle, which features Huawei’s Harmony operating system and assisted driving technologies. 

Why it matters: The latest sales figures, as revealed by a senior executive at Huawei, show tentative signs of a bounce-back for Aito from a months-long slump and could be a boost to the confidence of Huawei’s car manufacturing partners. 

• Aito has also been buoyed by Huawei’s comeback in the smartphone market with the recent launch of its Mate 60 Pro series, following the US ban on exports of advanced semiconductor technology to the Chinese technology giant. 

Details: The revamped M7 crossover has racked up more than 50,000 pre-orders with non-refundable deposits of RMB 5,000 ($685) as of Friday, Richard Yu, the chief executive of Huawei’s consumer business group, said in a post on Chinese social media app WeChat. 

• Yu described the growth momentum of the new M7 as “a miracle,” adding that more than 10,000 customers placed their orders over the past two days. He called on sales employees to ramp up delivery to meet the growing demand (our translation). 
• Accumulative orders per store averaged more than 80 following the launch on Sept. 12, according to figures posted Saturday by Sun Shaojun, founder of consumer behavior research agency CarFans. Aito said in June it operated a network of around 1,000 retail locations and service centers in 230 Chinese cities. 
• Sun added that a surge in store traffic for Huawei’s new smartphones has boosted the sales of the Aito-branded EVs, produced by Chinese manufacturer Seres, over the recent National Day holiday season. Huawei began selling EVs with its little-known partner via its retail network in 2021.
• Roughly 40-50% of the M7’s buyers are Huawei smartphone users and were coming to the stores for the Mate 60 handsets, Jefferies analysts wrote in an Oct. 5 note, citing an executive of a Chinese auto dealership. Customers compare the six-seater with Li Auto’s L7, BYD’s Tang, and the Ford Edge, analysts said.

Context: Huawei on Sept. 12 unveiled the redesigned version of the M7 SUV, featuring Huawei’s Harmony operating system at a starting price of RMB 249,800 ($34,299), which is around RMB 70,000 lower than the initial version launched a year earlier.

• The vehicle also comes with Huawei’s latest assisted driving software, ADS 2.0, which will allow it to travel by itself on busy urban streets nationwide as early as December, making it one of the most ambitious players in the Chinese self-driving car space.
• Huawei has offered future owners of the new large-sized plug-in hybrid early access to purchase its Mate 60 smartphones. The Mate 60 Pro flagship handset reportedly incorporates a self-developed 5G processor, a breakthrough for the Chinese tech giant following US sanctions in 2019. 
• Two-year-old Aito has seen sales slump during most of 2023 amid fierce competition from more established rivals such as BYD and Tesla. Seres, which produces Aito-branded EVs, recorded sales of around 33,000 units for the first eight months of this year, representing a 15.6% decline year-on-year. 
• Meanwhile, Huawei has partnered with several other domestic automakers including Changan and BAIC. It is also on track to launch the S7 with carmaker Chery in November, the first sedan under a new marque called Zhijie in Chinese that will compete against Tesla’s Model S.

Chinese premium electric vehicle brand Denza on Tuesday revealed a cheaper version of its advanced driver assistance system (ADAS) in collaboration with US chipmaker Nvidia, as the BYD affiliate ramps up efforts to compete against leading self-driving players such as Xpeng Motors and Huawei. 

Denza is also eyeing overseas expansion, having established its presence in the China market with year-to-date deliveries of nearly 80,000 EVs as of August. The company expects overseas sales to begin as early as next year, including in Australia, Southeast Asia, the Middle East, and Europe. 

Why it matters: The companies said the launch of the affordable assisted driving technology could reduce the barrier to a transition to intelligent mobility. The system facilitates Denza’s vehicles to navigate most highways in China as well as some busy urban streets in major domestic cities. 

• BYD launched the N7 crossover under the Denza marque in July, with the top-end version powered by Nvidia’s ​​DRIVE Orin processor, which offers 254 trillion operations per second (or TOPS). Now all N7 models can be equipped with Nvidia’s DRIVE Orin chips for automated driving, according to a Wednesday statement. 

Details: The new autonomous driving system will enable on-ramp to off-ramp driving, as well as automatic lane changing on Chinese highways, for Denza’s flagship N7 SUV. It has a price tag of RMB 15,000 ($2,053) and is powered by Nvidia’s DRIVE Orin processor, which can handle up to 84 TOPS. The N7 SUVs that feature the technology will have two lidar sensors removed to reduce costs. 

• The companies say that the higher-end version, priced at RMB 23,000, will allow the vehicles to function by themselves on bustling city streets for the daily commute, using a feature named City NOA (Navigate On Autopilot). Denza’s general manager Zhao Changjiang said the company would release its Highway NOA feature to N7 owners starting in December, followed by an over-the-air update of the City NOA early next year. 
• Tong Liu, vice president and general manager of China auto business at Nvidia, said that he was “impressed” by the efforts made by BYD in developing intelligent cars over the course of their three-year collaboration, calling BYD/Denza a “strong advocate” of commercializing self-driving technology (our translation). BYD’s Dynasty and Ocean lineups are also using Nvidia’s semiconductor. 

Context: Several Chinese auto and tech companies have announced ambitious plans for the adoption of assisted driving technologies for urban driving, akin to Tesla’s full self-driving (FSD) function that has yet to be made available in the country. 

• Volkswagen-backed Xpeng Motors in June launched its City Navigation Guided Pilot feature in Beijing and is on track to expand the capability in at least 50 domestic cities by the end of this year, while Great Wall Motor has set a target of covering 100 cities by 2024.
• In the meantime, Li Auto vehicles will be able to navigate on fixed routes for daily commuters in 100 major Chinese cities by year-end, following weeks of training with its collection of datasets. Rivals Nio and Geely’s Zeekr are also planning to roll out similar features later this year. 
• Huawei is by far the most ambitious company in the field in China, with its head of consumer business Richard Yu stating on Sept. 12 that Huawei’s self-driving system would be applicable nationwide for both highway and urban driving with Aito-branded EVs by December, Caixin reported. 
• BYD has made a series of moves in recent months to enhance its research and development capacity, especially for autonomous driving, including organizational restructuring and talent hiring. More than 80% of the 30,000 fresh graduates recruited by the company this year were research personnel. 

READ MORE: Baidu and Huawei take on global giants with new in-car software offerings at Auto Shanghai 2023

China’s Great Wall Motor (GWM) will bring its next-generation in-car operating system to market next year, and stick to the ambitious goal of rolling out its semi-autonomous driving function nationwide by the end of 2024, according to a press event held on Tuesday. 

The company is undertaking a targeted push to create a scalable and unified software platform for future vehicle models across multiple different brands, a concept that has become mainstream in the years since Tesla entered the market. A significant increase in the number of software updates, aimed at improving the driving experience, is expected from next year, vice president Nicole Wu told TechNode at the event, held in the northern city of Baoding, where the company is headquartered. 

China’s third biggest private automaker by sales volume, GWM had a relatively early start in autonomous driving and in-car technologies. It began testing self-driving cars with the creation of a dedicated division called Haomo.ai in 2019 and became the second Chinese automaker after Xpeng Motors to build a supercomputing center, this January. Now, the company has set up a new artificial intelligence research lab to bring generative AI tools into play in future car models. 

Here are some of the highlights of TechNode’s interview with GWM executives, including vice president Nicole Wu, senior director Jiang Haipeng, director She Shidong, and Yang Jifeng, head of the AI lab. 

Major digital cockpit progress

GWM will roll out an app store and implement it across all brands, as part of its upcoming in-car operating system, Coffee OS 3.0, scheduled for release in the first half of 2024. The store will give users access to common third-party services and infotainment apps fine-tuned for car-friendly usage, as more customers expect a smartphone-like experience in the car. 

By working with smartphone makers such as Huawei and Xiaomi, the new system will allow drivers to use a handset while operating their vehicle. She Shidong added that owners will be able to play video games and watch movies in their cars by connecting gaming consoles, augmented-reality glasses or other devices, with the car dashboard using wireless or bluetooth connections.

By making constant updates of driving and infotainment features possible, the Coffee OS 3.0 is intended to take the in-car experience to a new level. Wu envisions each new GWM model getting a major software update every two to three months. Tesla and Nio released 2.8 and 1.3 software updates per month on average respectively in China during the first half of 2022, according to figures from domestic consultancy Ways. 

Ambitious self-driving goal

GWM has maintained its goal of launching Navigate on HPilot (NOH), a function similar to Tesla’s full self-driving (FSD) technology, to drivers in 100 cities around China by 2024. The software will first be available to owners of its Blue Mountain flagship SUVs in Beijing and Shanghai by next March, according to Jiang. 

This will enable vehicles to change lanes, overtake, and make turns automatically on Chinese city streets without high-precision maps. Jiang added that a set of common middleware plays an important part in creating a platform for assisted driving software that is updateable and scalable at a reasonable cost. 

Chinese auto and tech companies have been competing for a leading position in this space at a time when Tesla’s FSD function has yet to become available in the country. Xpeng’s XNGP advanced driver assistance system is set to be available in 50 major cities by the end of this year, while Li Auto’s EVs will be capable of traveling on fixed routes by themselves after training for weeks in 100 cities. 

Bring generative AI to vehicles

GWM is also looking to greatly expand its in-car system capabilities through the integration of emerging technologies such as generative AI tools. Its first aim is to use AI to anticipate user preferences and create high-quality infotainment content in some new car models in the fourth quarter of this year.

The company’s newly established AI Lab has been exploring the use of large language models in GWM vehicles. Yang expects significant improvement with the upcoming Coffee OS 3.0, especially in voice recognition and natural language understanding, expecting that the latest operating system will be able to give detailed, relevant responses to users’ queries using AI.

Rival players are all developing ChatGPT-like virtual assistants for use in future car models. Geely is scheduled to launch its RMB 128,000 ($17,600) Galaxy L6 SUV on Saturday with a proprietary AI model that can read children’s picture books. Both GWM and Geely-affiliated Ecarx earlier partnered with Baidu to develop AI assistants based on the latter’s GPT-style large language models.

Lynk & Co, a brand jointly owned by China’s Geely and Volvo Car, launched the 08, its long-anticipated plug-in hybrid crossover on Sept. 8. The automaker says the car has a starting price of RMB 208,800 ($28,815) and is powered by an in-house designed seven-nanometer (nm) chip, claimed by the company to be China’s first.

The compact sports utility vehicle is the first model under Lynk & Co which is exclusively plug-in hybrid. This marks a significant shift for Geely and Volvo as they make a determined move away from the internal combustion engine.

Having grappled with slowing growth in an increasingly competitive market, Lynk & Co expects the mid-sized 08 to be a high-volume model in the mainstream luxury SUV segment, competing against rival offerings including BYD’s Tang, Li Auto’s L7, and the Aito M5.

Why it matters: The Lynk & Co 08 is equipped with two SE1000 automotive chips, which is the first high-performance seven-nanometer semiconductor for cars designed by a Chinese company. The car can perform over 16 trillion operations per second (TOPS), Geely said in a statement. This is twice the number of Qualcomm’s Snapdragon SA8155P, the US tech giant’s flagship automotive cockpit platform. 

• It is also the first model to use Flyme Auto, an operating system jointly developed by Chinese smartphone maker Meizu and Ecarx, an auto tech startup backed by Geely’s chairman Eric Li. This offers an infotainment system that seamlessly connects users’ smartphone apps to the vehicle’s navigation screen.

Details: The Lynk & Co 08 uses a 1.5-liter four-cylinder engine along with a large 39.8-kilowatt-hour battery pack, providing a maximum driving range of 205 kilometers (127 miles) in all-electric mode and 1,400 km on a full tank plus full charge. Delivery is scheduled the begin later this month. 

• It uses little energy on short trips and ensures cost-competitive travel for daily commutes. By comparison, BYD’s Tang hybrid seven-seater and the Li Auto L7 extended-range hybrid run for up to 189 and 170 km, respectively. 
• The SUV boasts fuel consumption of 5.5 liters per 100 km, comparable to the 5.3L/100km of the BYD Tang DM-i, one of China’s best-selling hybrid models, and surpassing the Li Auto L7’s 7.6L/100 km. It can accelerate from 0 to 100 km/h (62 mph) in 4.6 seconds.
• The five-seater compact offers passengers a relatively large interior space measuring 4.8 meters in length and spanning a 2,915-millimeter-long wheelbase, close to the bigger but more expensive Nio ES6 and Li Auto L7, which are priced from RMB 338,000 and RMB 319,800, respectively.
• Priced between RMB 208,800 and RMB 288,000, the SUV is packed with advanced technology and luxurious design features, such as a 92-inch, augmented reality-based display, the largest of its kind in the industry, as well as a Harman Kardon audio system and frameless doors. 

Context: Lynk & Co reported a modest 6% year-on-year growth in sales for the first half of this year, while its peer Zeekr, a premium electric vehicle brand launched by Geely in early 2021, posted a remarkable 124% annual growth over the same period. Seven-year-old Lynk & Co, which formerly focused on China’s gas-powered vehicle segment, sold 180,127 vehicles last year, representing an 18.3% decline from a year ago.

• Ecarx announced the incorporation of the Flyme Auto into the Lynk & Co 08 SUV in March, followed by the public debut at this year’s Auto Shanghai show a month later. 
• Ecarx was founded by Geely chairman Eric Li and close associate Shen Ziyu in 2016, and set up a joint venture, SiEngine, to develop auto chips with Arm China two years later, Reuters has reported.
• Geely entered the smartphone industry with the establishment of a venture called Xingji Shidai in 2021, and renamed it Xingji Meizu after it acquired smartphone maker Meizu in mid-2022. 

BYD’s most credible competitor to the Tesla Model 3 would have a 25% cost advantage over models produced by European automakers even if it were manufactured locally in the continent, UBS said on Tuesday, taking costs resulting from protectionism into account.

Why it matters: The findings demonstrate the growing competitiveness of Chinese automakers led by BYD in making centralized, unified, and up-to-date car systems with highly integrated components and self-run supply chains, UBS analyst Paul Gong told reporters in Shanghai on Tuesday. 

• This could help Chinese brands maintain their cost competitiveness even as they transition from exporting to local production in some of the world’s most developed markets. Gong made the comment after the investment bank completed a tear-down analysis of the BYD Seal, calling it “a good balance” between technological advancement and cost optimization.  

Details: New research from UBS’s evidence lab that took apart the Seal electric car, BYD’s closest peer to the Tesla Model 3, reveals that the medium-sized sedan is 15% more cost-efficient than locally made offerings by the US automaker at its Shanghai facility. 

• This percentage would be extended to 35% when compared to Volkswagen’s similar offerings manufactured in Europe. This means it would cost BYD $10,500 less to produce each Seal in China than a Volkswagen ID.3 in Europe, UBS analysts wrote in a Sept. 1 note. 
• For Chinese-branded EVs, exporting from China to Europe is cheaper than manufacturing locally. Even so, Chinese EV makers would still maintain a 25% cost advantage over rivals if they produced in Europe, Gong added. 
• UBS attributed the gap primarily to BYD’s technological and engineering integration of vehicle components. Additionally, the investment bank noted that 75% of the auto parts, ranging from batteries to power semiconductors, were made in-house. 
• BYD could strike a balance between performance and cost by offering a relatively simple assisted driving system at a cost of less than RMB 3,000 ($411), significantly lower than the industry standard of around RMB 20,000. 
• The teardown, aimed at uncovering the secrets of BYD’s success, reinforced UBS’s confidence in the rise of Chinese EVs. The investment bank expects Chinese automakers to double their global market share to 33% by 2030 and increase their European market share to 20% from last year’s 3% over the same period. 

Context: BYD began deliveries of the Seal battery sedan, its closest competitor to Tesla’s Model 3, at a starting price of RMB 209,800 last July, followed by the launch of a cheaper version from RMB 189,800 in May.

• The Warren Buffett-backed EV major said on Monday that it has sold more than 100,000 units of the all-electric vehicle in a year. The vehicles are mainly produced in the eastern city of Changzhou. 
• On Tuesday, at this year’s IAA Mobility show in Munich, the company announced that it plans to sell the Seal to European customers at a starting price of €44,900 ($48,184) in the first half of 2024.

Chinese EV maker Zeekr made a splash on Sept. 1 when it launched its first high-performance, track-focused vehicle – one which it hopes will establish new benchmarks in the field and compete with established brands such as Porsche and Tesla.

The 001 FR, which Zeekr is calling the world’s best-performance electric vehicle, uses four silicon-carbine motors for sophisticated torque vectoring, producing a powerful 1,265 brake horsepower, compared with 887 hp of the Porsche 918 Spyder.

The high-performance brake, completely redesigned from the original 001, can, the company claims, accelerate from 0-100 km/h (0-62 mph) in 2.07 seconds, faster than the 2.1-second acceleration to 60 mph of the Tesla Model S Plaid. The new model promises to be an everyday supercar, with a rapid battery charge from 10% to 80% in 15 minutes.

The debut comes at a time when Chinese manufacturers are rushing to launch premium offerings with eye-catching performance specs in a quest to upscale and compete in the global luxury EV segment. 

Zeekr has not released pricing details for the 001 FR, but has said the car will be made available in limited supply of up to 99 units a month from October. This will bring it into competition with another high-end rival, as BYD begins deliveries of its RMB 1 million ($150,000) electric SUV later this month. 

“Global luxury brands have ruled the performance car segment throughout the era of internal combustion engines … but Chinese electric vehicles are now capable of competing head-to-head against European top-tier supercars,” Andy An, chairman of Geely Auto Group and CEO of Zeekr told reporters in an interview after the launch. 

TechNode also spoke to Chen Qi, vice president of Zeekr and a former Huawei executive, about the company’s approach to autonomous driving as it looks to expand overseas. Geely’s premium EV subsidiary is establishing its footprint in Europe as part of its goal to deliver 140,000 units this year while looking to sell shares publicly in the US. 

Below are highlights from a group interview after the launch, which have been translated, condensed, and edited for clarity:

On limited production of the 001 FR 

An: The Zeekr 001 FR comes with a comprehensive list of high-performance equipment among which are extremely rare parts mostly needed and reserved for professional race cars. 

For example, more than 70% of Brembo’s carbon-ceramic brake systems are provided to today’s top-tier race cars, with less than 20,000 units available for road cars annually. We are individually crafting the 001 FR to ensure the highest standards of quality are attained, which together with other factors restricts the sports car’s output capacity to less than 100 units a month. 

Our customers have reacted remarkably well: the first 99 units of the 001 FR were sold out in 15 seconds after reservations opened [on Sept. 1] and the number exceeded our annual production capacity 20 minutes after that. I think this is because the 001 FR represents the state of the art as a sports wagon, which could improve sales and help establish Zeekr’s image as a technology-driven company. 

On Zeekr’s self-driving roadmap 

Chen: Zeekr has pursued a dual strategy of initiating in-house development as well as outsourcing to catch up with rivals in self-driving technologies. We are pushing forward a new program to bring autonomous driving for urban scenarios with future models using Nvidia’s semiconductor chips.

Meanwhile, it requires a relatively long period of testing and validation for existing Zeekr models to navigate Chinese urban roads with Mobileye’s advanced driver-assist technology. Mobileye has been an early mover in creating its digital maps to enable self-driving cars and we will use its assisted driving systems mainly in the European market. 

Automakers are deploying assisted driving technology on a city-by-city basis because more effort is needed to enhance the neural network’s generalization ability in various practical driving scenarios. [Editor’s note: Transformer is a new deep neural network architecture first mentioned in a 2017 Google paper and later used by Tesla to convert location data gathered by cameras into three-dimensional space for motion planning and control. Many assisted driving software have since been written using the transformer algorithm.]

We are accelerating efforts to roll out driver assistance software, first applicable on major Chinese highways, and we will then let our cars navigate complex urban streets automatically. 

On Zeekr’s US listing plan  

An: Zeekr will venture into the capital markets. But it is not the top priority for our management at the moment. There is no update on Zeekr’s listing plan following approval from the Chinese regulator. We will keep an eye on investor sentiment before taking a chance to go public. 

Zeekr has set an annual delivery target of 650,000 units by 2025 as one of the top three luxury EV makers worldwide since its inception and remains confident under pressure. We’ve made significant progress in a comprehensive way, including building a substantial cost advantage over competitors other than Tesla, and will reach the goal with the launch of a new model later this year, followed by two all-new ones in 2024 and 2025. 

On global expansion 

An: Zeekr started exports to Europe with 500 Zeekr 001 cars last month and will begin vehicle delivery first in Sweden and the Netherlands as early as September and in several other European countries next year. We are also preparing to enter regional markets including Southeast Asia, the Middle East, and Latin America, but will keep our focus on Europe at the moment. 

We expect to see a significant contribution to sales from overseas markets in the future. Chinese electric vehicles are gaining momentum in the global auto industry and we will make use of this to go upscale and expand globally.

READ MORE: Experts bullish on Chinese automakers’ global push as SAIC seeks EU foothold

Tesla has released the long-anticipated, redesigned Model 3 with a sharper appearance and a range of new features in China, although at RMB 259,900 ($35,809), its starting price is higher than expected, according to a poll published on Friday on the Chinese Twitter-like social media platform Weibo.

Why it matters: The US automaker’s pricing strategy for the revamped sedan had attracted enormous attention from Chinese customers prior to its announcement, due to the car’s significant success in the electric vehicle market and Tesla’s recent policy of price cuts in the country.

• Although the launch price is not as low as some were expecting, the revamped Model 3’s arrival has still caused some rival EV makers to announce new deals for Chinese drivers. Xpeng Motors reacted immediately on Friday by offering zero-interest financing for up to 24 months or a price reduction of RMB 10,000 to buyers of its P7i. New owners of the electric sedan, priced from RMB 249,900, will be given a RMB 6,000 Dynaudio audio system for free by the end of this month. 

Details: In a poll conducted on social media site Weibo on Friday, more than 15,000 out of roughly 21,000 respondents said that they would not consider buying the newly-designed Model 3 due to “insufficient budget or an overly expensive price tag” (our translation). 

• Roughly 3,400 participants expressed their intention to purchase the new Tesla as of writing, attracted by a “competitive price or new features.” The poll was released on Friday morning by Chinese internet portal Sina, the parent company of Weibo. 
• The new Model 3 would “have no equal” if it were priced at around RMB 200,000, yet some domestic brands are more attractive at the RMB 260,000 price range, a Weibo user with the handle Kejigangzi in Chinese Pinyin commented in one highly-upvoted response. 
• In an announcement posted by Tesla on its official Weibo account, some internet users spoke critically of the car’s pricing not meeting their expectations, stating that they would be waiting for the price to go down. 
• The EV giant on Friday launched the reworked mainstream premium sedan in rear-wheel drive and all-wheel drive versions, priced from RMB 259,900 and RMB 285,900, respectively, compared with its previous base-version Model 3 at a price tag of RMB 231,900. 
• The revamp comes after Model 3’s initial launch back in 2016, and sees an improvement in driving range from 556 to 567 kilometers (352 miles) for the baseline version. The all-wheel drive version has a driving range of 680 km, reportedly powered by a new Lithium Iron Phosphate (LFP) battery sourced from CATL. 
• The all-new Model 3 gets a 15.4-inch infotainment screen, slightly larger than the 15 inch one seen in the previous version, in addition to an eight inch display for rear passengers. It also introduces new features and equipment such as ambient interior lights and ventilated seats. 
• However, the updated Model 3 removes a physical shifter, replacing it with an automatic system that may ask users to activate gear shifting on the touchscreen, a feature unfamiliar to Chinese EV owners, an analyst who asked not to be named told TechNode. 

Context: Tesla initially began selling locally-made Model 3s in China at a starting price of RMB 355,800 in late 2019. The company shipped 412,805 units of the vehicle from its Shanghai facility during 2020-2022, making it the best-selling premium electric sedan in the world’s biggest EV market, according to figures from the China Passenger Car Association. 

• Tesla sparked an EV price war in China at the beginning of 2023 when it slashed prices across its range. The carmaker announced significant price cuts for the Model 3 and Model Y lineup in China on Jan. 6, with the Model 3’s starting price dropping RMB 36,000 ($5,314) to RMB 229,900, and the Model Y dropping RMB 29,000 to start at RMB 259,900.

READ MORE:  China EV price war: Xpeng, Huawei-backed Aito join Tesla in cutting prices

Xpeng Motors chief executive He Xiaopeng said on Monday that he anticipates annual sales for an upcoming model, co-developed with Didi Chuxing under a new brand, to reach 100,000 units, in an unexpected partnership between the electric vehicle maker and the ride-hailing platform.

Why it matters: The move marks Xpeng Motors’ latest effort to expand its product lineup and extend its brand reach into the fleet market. The alliance is expected to help Xpeng significantly reduce costs and generate economies of scale in the production of highly autonomous cars, said He.

• While the deal will help Xpeng accelerate its EV manufacturing growth and facilitate the development of self-driving technologies with more driving data, it can help Didi monetize its smart auto segment and attract drivers with vehicles suitable for ride-hailing, Bernstein analysts wrote on a Monday note.
•  Nonetheless, doubts were voiced over Xpeng’s ambitious sales goal, citing limited market size and fierce competition. “BYD was the only OEM (Original Equipment Manufacturer) to deliver more than 100,000 units, and the remaining top players all have their own ride-hailing affiliates,” wrote Bernstein analysts.

Details: Speaking to Chinese reporters during a media briefing, CEO He expressed confidence in the forthcoming A-class sedan, scheduled for production next year. He believes the model will enhance Xpeng’s performance, but does not specify a timeframe for his annual sales volume goal. The company delivered 41,435 EVs for the first half of this year with six namesake-branded models on sale.

• The EV startup is currently developing the model with assistance from Didi under a project codenamed Mona. He believes that this could become “a hit product” featuring Xpeng’s self-driving technology at an expected price tag of around RMB 150,000 ($20,594). 
• The compact sedan will also be the first model under a new mainstream sub-brand, which He said will be positioned to target the Chinese consumer EV segment while also facilitating Xpeng’s expansion within the fleet market segment.
• As part of the collaboration, Xpeng will acquire Didi’s smart EV business, which comprises the design, research, and development of EVs with intelligent features. This acquisition will be accomplished through the issuance of approximately HK$5.84 billion ($744 million) worth of new shares to Didi.
• China’s biggest ride-hailing service will become a strategic investor in Xpeng with a stake of 3.25% after the deal,  helping take Xpeng’s newly branded EVs nationwide via its strong shared mobility market, according to a statement. 
• In Hong Kong, Xpeng’s shares surged 10.9% to HK$72.2 on Monday following the announcement. 

Context: The news comes a month after Guangzhou-based Xpeng announced a collaboration with Volkswagen to jointly launch two VW-branded B-class EVs in 2026. B-class vehicles are normally larger than A-class vehicles and have larger engines.

• Xpeng is not the only Chinese EV maker exploring new brand options to reach a wider customer base. Rival Nio has recently made notable progress in the development of two entry-level brands codenamed Alps and Firefly, with both scheduled for launch in 2024. 
• Didi initially had ambitious plans for its carmaking business, assembling a team of 1,700 employees dedicated to working on the project, with the aim of releasing a consumer EV in mid-2023, multiple Chinese media outlets reported. It even launched a battery-electric hatchback tailor-made for ride-hailing in collaboration with BYD in November 2020, Bloomberg reported. 
• However, the ride-hailing giant had been under an 18-month investigation for alleged national security issues which began right after its mega-public listing on the New York Stock Exchange in June 2021. Meanwhile, Chinese authorities have imposed strict regulations on the release of EV production licenses in recent years.

READ MORE: What to expect from Volkswagen and Xpeng’s new partnership

Li Auto’s chief executive Li Xiang launched a series of business startup courses on Chinese audio content platform Dedao on Monday. With this move, the entrepreneur is aiming to tap a wider customer base and showcase his firm’s thought leadership, local media reported. 

Why it matters: During a livestream, Li mentioned that the target audience for his newly-launched online product development program significantly overlaps with Li Auto’s intended user base. He expects the marketing initiative to help the automaker further expand its influence in the electric vehicle market, media outlet Jiemian reported. 

Details: The program consists of 16 audio-based online courses, each lasting approximately 12 minutes, and aims to educate the audience about the fundamentals of product management, including the methodology for designing successful products, crafting powerful pricing strategies, and increasing operational efficiency and profitability.

• The program also offers insights into what makes a startup more competitive, including tips for building a collaborative and unified team, based on Li’s extensive startup business experience of over 20 years in the Chinese tech and auto industries. As of the time of writing, more than 15,000 users have subscribed to the paid program, priced at RMB 99 ($14), according to Dedao. 
• In one of the lessons observed by TechNode, Li recalled the initial challenges Li Auto faced while positioning itself as a manufacturer of EVs for Chinese families with children and grandparents, a potentially lucrative segment that was neglected by competitors, some of whom had voiced concerns that the customer base might be too small, Li said. 
• On the online education platform, some influential users have voiced their support for Li Auto and its founder. Li Auto’s success story is “worth learning and researching” (our translation), posted a user whose account was labeled as a manager at SAIC-Volkswagen, a Chinese joint venture of the German automaker.
• Li Auto entered a segment with high growth prospects and offered products at competitive prices for families, said another Dedao user, who labeled himself as a brand manager at Great Wall Motor. Li Xiang is already an outspoken and prolific user on China’s Twitter-like microblogging platform Weibo, with 2.2 million followers.

Context: Li Auto delivered 139,117 units of plug-in hybrid crossovers in the first half of 2023, surpassing last year’s total of 133,246 units. 

• The Beijing-based EV maker expects to deliver more than 100,000 units in the third quarter and anticipates posting monthly deliveries of 40,000 units during the last three months of this year, CEO Li told investors on Aug. 8.

Xingji Meizu, a smartphone company controlled by Geely founder Eric Li, has decided to discontinue its chip development business for cost-saving reasons. The move is expected to result in layoffs of dozens of staff members, including some fresh graduates, local media outlet Meiren Auto reported on Tuesday.

Why it matters: Xingji Meizu is the latest company to abandon its pursuit of critical and emerging technologies in the Chinese auto and tech industries, reflecting the challenges of a faltering economy and intensifying competition. 

• The news comes just days after electric vehicle maker Nio delayed the development of its own batteries to ease cashflow constraints. Similarly, in May, rival phone maker Oppo announced the closure of its chip design unit Zeku after five years of operations.

Details: In a statement sent to financial media publication CLS on Tuesday, Xingji Meizu said the company is closing down its in-house chip design program in the face of global economic uncertainties, and will instead sharpen its focus on product innovation and user experience.

• Xingji added that it will offer compensation as required by law, along with internal job transfer opportunities, to ensure the rights and interests of employees, especially fresh graduates, without revealing further details. Geely did not respond to TechNode’s request for comment. 
• The company’s chipmaking institute employs approximately 200 people, and dozens of recent graduates are likely to be impacted by the layoffs, according to Meiren Auto. “[The news] came just three weeks into the job,” one of the new employees told the outlet. 
• Development has mostly stalled since the launch of the institute, according to a person with direct insight into the company’s operations. Chief executive Shen Ziyu told Chinese reporters in March that emerging technologies, including chipmaking, were at the center of Xingji’s strategic efforts, alongside smartphones and in-car systems.

Context: Geely’s other affiliates have reported progress in semiconductor technology. The most recent example is the Lynk & Co 08 SUV featuring an in-car operating system built upon a supercomputing platform provided by Ecarx, another auto tech firm founded by Shen Ziyu and Geely’s Eric Li. 

• Siengine, Ecarx’s joint venture with Arm China, was responsible for designing seven-nanometer chips intended for use in computers in partnership with leading global chipmaker TSMC, Shen told Reuters back in March 2021.
• Xingji Technology, a company established by Li, acquired nearly 80% shares in beleaguered smartphone maker Meizu last summer, which preceded the establishment of Xingji Meizu and the release of Meizu’s first high-end handset series in two years this March.
• Xingji Meizu is also leading the business development of Geely-owned Swedish automaker Polestar in the Chinese market, having set up a joint venture with the EV maker in June. 
• Geely founder Li first revealed his plans to enter the smartphone market back in 2021.

Chinese EV giant BYD is taking on a record 30,000 fresh graduates this year, with research personnel accounting for 80% of the total intake, in a move intended to shore up its research and development department, a company representative has confirmed. 

Why it matters: The hiring drive comes as BYD looks to retain its dominance in the Chinese electric vehicle market as rivals continue to offer a competitive challenge. The move contrasts sharply with general hiring trends as China faces soaring youth joblessness. 

• China’s unemployment rate for those aged 16 to 24 rose to a record 20.8% in May, according to the National Bureau of Statistics. One Peking University professor said she expected that number could rise to nearly 50%, according to a July 20 report by Reuters. 

Details: Around 31,800 fresh graduates have come on board at BYD since the start of 2023, more than 61% of whom have a master’s or doctorate degree, and over 80% of whom will work in R&D projects. State-owned newspaper People’s Daily was the first to report the story on July 29.

• The Chinese automaker has been hiring research employees in electronics and electricals, new energies, and semiconductors, to be mainly based in Shenzhen, Shanghai, and the northwestern city of Xi’an, according to a job post on its official website. 
• A BYD spokesperson confirmed the news when contacted by TechNode, without offering further details. 

Context: BYD has been expanding its R&D team for several years with the number of engineers hired by the company growing 31.5% year-on-year to around 40,400 in 2021. That number increased 72.6% year-on-year to nearly 70,000 as of last year. The company had around 570,000 employees in 2022, of which around 75% were production workers, financial media outlet Caixin reported.

• The Chinese EV giant, which had a relatively late start in the autonomous driving field, recently hired between 4,000 and 5,000 software engineers, Reuters reported on May 17, citing the company’s senior vice president Stella Li. It has also been running an intelligent driving research unit in Shanghai since last year, the Reuters article said, while reportedly restructuring its vehicle engineering institute. 
• The company is rushing to reach the top end of its full-year sales target of 3.6 million EV units, which would almost double last year’s total. It has sold nearly 1.3 million units this year, as of June. BYD spent RMB 20.2 billion ($2.83 billion) on R&D last year, up 90.3% from a year ago, and has developed key components in-house including EV batteries, electric powertrain systems, and vehicle control technologies. 

As Chinese automakers begin to beat overseas rivals on their home turf for the first time, analysts at AlixPartners, a global consultancy, expect their international push to net them a 30% global market share by 2030.

Among the biggest Chinese car manufacturers, SAIC and BYD have announced plans to build their first regional facilities in Europe and South America for easier access to booming EV markets through local production. Chinese EVs have already made big in-roads into the reputational market for stylish designs, high-tech features, and low cost.

Established global carmakers, no matter where they are operating, can only maintain their competitive positions by learning from the Chinese industry, Stephen Dyer, a co-leader for AlixPartners’s Greater China business, told reporters on Wednesday in Shanghai. “Those that ignore this future disruptive force do so at their own peril,” he said.

The big picture

AlixPartners sees recent moves by Chinese automakers as a way to further boost sales volumes and reduce risks from volatile exchange rates and potential logistics issues in overseas operations. China overtook Japan as the world’s top vehicle exporter in the first quarter of 2023 and is extending its international presence from under-developed regions to more developed ones such as Europe.

A major threat to western original equipment manufacturers (OEMs) could emerge by 2030 in the shape of Chinese carmakers. AlixPartners expects the latter’s global car sales to grow in market share from 16% in 2022 to 30% in 2030. In Europe, market share could grow from 2% to 15% over the same period, while Latin America and Southeast Asia show even greater potential with Chinese carmakers expected to have an estimated 19% market share in each by 2030, up from just 1% last year.

Dyer said he is convinced that Chinese brands could achieve success in the highly competitive European market, by employing the same “winning formula” they have been crafting at home. “Chinese automakers will have a chance to win favor, especially from younger European buyers, with their in-car technologies,” added Dyer, speaking in Mandarin Chinese (our translation).

Lessons to be learned from China

AlixPartners suggests global automakers may need to rethink their emphasis on traditional vehicle attributes such as durability and handling, adapting fast as Chinese-style competition comes to their markets.

Chinese brands have made a mark by providing feature-rich offerings at affordable prices, responding to local consumers’ preferences for stylish design, engaging interiors, and advanced technologies while accepting “good enough” reliability and performance, said Dyer.

READ MORE: Chinese carmakers showed up big time at Auto Shanghai 2023

Nearly 60% of Chinese-brand vehicles sold in 2022 and priced between RMB 80,000 and RMB 120,000 ($11,040-$16,560) were equipped with advanced driver assistance systems, considered a standard feature on higher-end models, compared with only 15% sold by foreign brands, according to AlixPartners’ analysis.

China’s homegrown makers, especially the younger ones, take a less cautious approach to vehicle development with an aggressive appetite for risk, using digital simulations to reduce the amount of physical testing for fast development and delivery to the market. Traditional overseas carmakers normally complete two years of extreme winter and summer testing, while Chinese brands often carry these out simultaneously in different parts of the world, according to Dyer.

Automakers’ latest plans

AlixPartners estimates that Chinese brands will secure a combined 51% share of China’s auto market this year, taking gas-powered vehicles and EVs into the equation, versus 49% by their foreign counterparts. This would mark the first time that Chinese automakers would have overtaken their more established foreign rivals in the market.

Having become leading forces in the world’s biggest EV market, brands such as BYD, SAIC, and Chery are upping their efforts to expand overseas by announcing the establishment of new plants near their local customers. 

SAIC said on Tuesday that it has been searching for a site for the carmaker’s first EV manufacturing facility in Europe in a move the company said would help secure a stable business environment over the long term, Chinese media outlet Caixin reported. Volkswagen’s Chinese partner expects sales to almost double to 200,000 units this year.

On the same day, BYD unveiled its plan to establish a $620.2 million industrial complex in Brazil, which will include three plants for the production of EVs and key components and is scheduled for operation as early as mid-2024. This would be the first production hub outside Asia for the Warren Buffett-backed EV giant. BYD is also reportedly closing a deal to take over a German factory from Ford.

Another giant Chery is mulling several facilities in the UK and Southeast Asia, while GAC and Great Wall Motor have similar plans in Thailand and Vietnam, respectively.

Chinese EV makers saw a flat month overall in May, with 0% growth in the market from April. However, some EV makers are squeezing out growth more than others. BYD, Aion, and Li Auto managed to report monthly growth of around 10% to 14%, while Nio saw delivery figures sink to its lowest level in 12 months. Xpeng Motors and Zeekr look on track for a modest recovery. 

Why it matters: Total sales in China of new energy vehicles, including all-electrics and plug-in hybrids, were relatively flat in May despite an outstanding performance by major Chinese electric vehicle makers, highlighting the growing advantage of domestic players over foreign counterparts amid rising competition.

• Automakers mostly saw a slowdown in new order intakes and foot traffic at showrooms during the second half of May due to a new surge in Covid cases, weak consumer sentiment, and the phase-out of regional subsidies by some local Chinese governments, analysts at investment bank Jefferies wrote in a note on Thursday, citing Sun Shaojun, founder of auto consumer service platform Carfans.
• Sun expects a strong recovery during June and July, as multiple domestic players begin mass delivery of new models. Sales of passenger EVs were around 483,000 units during May 1-28, up 82% thanks to a low base from a year ago due to Covid lockdowns. However, May deliveries showed no growth from the previous month, according to figures from the China Passenger Car Association.

Strong growth: BYD reported a record high in monthly vehicle sales at 240,220 units, up 108.9% from a year ago and 14.2% from April. This was buoyed by price cuts from dealerships and the launches of multiple cheaper models, including the new Han and Tang models with smaller batteries and the entry-level Seagull. Its premium brand Denza also posted impressive results of 11,005 vehicles delivered.

• GAC’s EV unit Aion and EV startup Li Auto also hit new milestones with deliveries of 45,003 and 28,277 vehicles last month, representing a monthly growth of 9.73% and 10.1%, respectively. The two companies have set goals of selling up to 600,000 and 300,000 vehicles this year, which would more than double their totals from last year.
• Hozon and Leapmotor both reported strong May sales of 13,029 and 12,058 units, respectively, after announcing “price protection” measures in March to counter a months-long price war ignited by Tesla. Historically a budget carmaker, Hozon said it delivered 1,716 Neta GT sports cars, launched last month and priced from RMB 178,800 ($25,276).

Under pressure: Nio on Thursday revealed that its monthly delivery figures have fallen for four months in a row to 6,155 units in May, as fierce competition and an aging product lineup continue to weigh on the Shanghai-based EV maker. On May 24, the company began handing over its all-new ES6 crossovers to customers and said mass delivery of its redesigned ET5 sedans would begin later this month.

• Xpeng’s May delivery was 6% higher from a month earlier, as the EV maker began delivering the P7i, a revamped version of its popular P7 sedans in March. The modest growth was due to supply chain constraints, with chief executive He Xiaopeng recently telling investors the company would “significantly” ramp up production of the key components for P7i with partners in June.
• Geely’s premium brand Zeekr posted deliveries of 8,678 units last month, a 7% increase from April. Its new compact SUV, the X, is scheduled for delivery this month. Rival Deepal began shipping the S7, its second model, on Tuesday, with monthly deliveries of Changan’s EV marque reaching 7,021 units in May, a 9.5% decline from April.
• Aito’s sales rose 22.8% month-on-month to 5,629 units in May. The Huawei-backed EV maker began selling a top-end version of its M5 plug-in hybrid crossover equipped with Huawei components and software for automated driving in April, with delivery scheduled to begin on June 18. Meanwhile, sales of Dongfeng’s EV unit Voyah fell 10.1% to 3,003 units from a month ago.

Nio on Wednesday launched a new version of the ES6, the brand‘s top-selling SUV. The EV maker has priced the new vehicle from RMB 368,000 ($52,027) and said it offers a driving range of 930 kilometers (578 miles) with its new 150 kWh solid-state battery pack. 

Why it matters: First launched in 2018, the ES6 has long been Nio’s top seller and performed strongly in China’s electric SUV category. The new version of the ES6 has the potential to become a high-volume car for the luxury automaker, which has faced slow growth as more established automakers enter the EV sector.

• Nio first unveiled details of its 150 kWh battery packs in January 2021, when the company claimed the battery would use a solid electrolyte instead of the liquid electrolyte found in existing offerings, providing high energy density and improved safety.
• The EV maker initially planned to deliver its ET7 sedans with the battery pack in the fourth quarter of 2022. However, in September 2022, CEO William Li told investors during an earnings call that production would be delayed “for several months.”

Details: The new ES6 with a 75 kWh battery pack is on sale for RMB 368,000 ($52,027) and offers a 490 kilometer driving range. The 100 kWh battery pack version is priced at RMB 426,000, offering a 625 kilometer driving range. Delivery began immediately after the launch on Wednesday night.

• The price of the ES6 can be reduced to RMB 298,000 if buyers choose Nio’s “Battery-as-a-Service” program, but they will have to budget in a monthly RMB 980 battery leasing fee. 
• The company did not reveal the pricing for the 150 kWh version of the new ES6, but CEO Li promised that delivery would begin in July during an online press conference on Wednesday, without providing any further details.
• The compact SUV can accelerate from 0 to 100 km/h (62 mph) in 4.5 seconds and has a dedicated computer to control chassis components, which the company said would improve the car’s balance and control.

Context: The five-seater ES6 has been Nio’s most popular vehicle model since it was first introduced in December 2018 and was the top-selling electric SUV in 2020, according to figures from the China Passenger Car Association. Nio has delivered more than 120,000 units of the original ES6 as of writing.

• The company currently has seven models on sale and covers a price range between RMB 300,000 and RMB 650,000. Li said it had set a target to double the company’s delivery volume from the 122,486 units it achieved last year.
• However, it delivered just 31,041 vehicles for the first three months of this year amid fierce competition, a 20.5% increase from a year earlier but a 22.5% decline from the previous quarter. By comparison, peer Li Auto delivered 52,584 units over the same period.

Speed is key if Continental and its auto clients are to have any hope of defending their market share in China, given the competition they face. Auto suppliers might be used to providing very specific solutions for single customers in Europe, “but in China this is not a good idea,” said Frank Petznick, Executive Vice President of the Autonomous Mobility Business Area at Continental AG.

While foreign auto executives express nervousness about the rise of their Chinese rivals, Continental’s global mobility head says he is not surprised. He says he has been “pretty aware of” of the pace of China’s progress in electric vehicle technology for a long time.

Offering products ranging from tires to dashboard displays, Continental is now growing its business in high-performance computers for automated driving, with GAC’s Hyper GT luxury coupe one of its early adopters. Speaking on April 19 on the sidelines of the Auto Shanghai show, Petznick told TechNode that companies must be lean, localized, and standardized in developing technology for the world’s biggest and most vibrant auto market.

Having lived in China for a decade before the Covid-19 outbreak, he also gave a broader perspective on the Chinese autonomous car industry and competition between global Tier-1 suppliers and local tech companies. The German auto parts giant is pushing to develop advanced electric and connected solutions not only for the China operations of multinational car majors but also for local manufacturers with global ambition.

READ MORE: Baidu and Huawei take on global giants with new in-car software offerings at Auto Shanghai 2023

Below are Petznick’s comments on the rapidly changing Chinese auto industry. The text has been condensed and edited for clarity.

China speed

The Chinese market is working completely differently from Europe, and much faster. In order to be prepared for the market, we need local companies that can put pressure on us to speed up and become more dynamic in the market. That’s why we decided to form a joint venture with Horizon Robotics two years ago. We wanted to make a Chinese joint venture that would be closer to the local market.

Global automakers underestimated China’s speed [with regard to EV transition] over the last three years, but now they are getting super nervous because they have seen what’s going on. EV companies in China have a higher demand for autonomous driving. They integrate the entire technology into their cars and can sell to local young people who just want to buy fancy cars.

A lot of the cost of ADAS [Advanced Driver Assistance System] comes from developing specific software, and what Continental can do very well is integration. We figure out what is a common part, roll out standard components in a fast and cost-competitive way, and then add specific functions to make a difference. I think this is the key [to success] in China, but many Western companies have not understood that yet.

Think local

We are working closely with our Chinese customers and developing systems in China and for China. Global automakers in China also want to use local solutions because they are afraid of being too slow and too late. The other thing is that many Chinese brands are going global very fast. It means we could also help some of our Chinese customers use a more global approach.

Every Chinese brand now has a global ambition, though new OEMs [original equipment manufacturers] are much faster at going global than traditional ones. Since the border opened [late last year], we have seen a growing number of Chinese OEMs coming to our headquarters in Frankfurt and Hanover to talk about having a global setup. In the meantime, we have the same discussions when we come here.

We have different solutions for different regions, but the software and functions are the same. We would like to help the global OEMs develop in China and help local OEMs develop in the global world. This is what we are trying to do: bridge the two.

Autonomous driving

There are some very good startup players in the US, but I believe robotaxis will become real in China before the rest of the world. There are still many difficulties in getting approval for vehicles with close to Level 3 driving capabilities. Some cities have allowed this, others have not. It’s very scattered. 

I see significantly faster development in terms of the infrastructure and the regulations needed in China. That’s why I think China could be the world’s first robotaxi-friendly country. The rest of the world could focus more on commercial trucks, which are more of a highway thing and not as complicated as robotaxis in the cities.

We are developing software basically for all levels of autonomous driving by using a lot of the expertise from our partners. The competition is very tough. You always see companies jumping forward and others catching up, but the good news is that if you can survive in this market, you can survive anywhere in the world.

Competing with tech giants

Tech companies such as Huawei and Baidu are going to be Tier-1 suppliers, while we are shifting to be more on the tech side. We need to be more agile and have a more local mindset in order to be fast enough.

We have launched a couple of products, such as a full-fledged smart camera based on processors from a Chinese partner. We are also making high-performance computers where ADAS will also be a part of it. We will be going into series production with the partners we have now. You will see these cars on the road very soon.

I don’t think we have to turn ourselves into a new Baidu. This would be going too far over to the other side. Chinese tech firms are trying to be more Tier-1 and we are trying to be more like a tech company. We are basically learning from each other. We have discussed globally that we have to become a tech player, and in the China context, we need to do that tomorrow.

As China’s car industry quickly embraces new energy vehicles, the country’s tech giants and startups are competing head-on with established global auto parts manufacturers to help automakers develop unique in-car software experiences and assistant driving features.  

Tech majors like Huawei and Baidu are positioning themselves as automotive suppliers by providing comprehensive software systems along with a full range of electronic components for the smart, connected, and electric vehicles of the future. Meanwhile, global tier-1 suppliers Bosch and Continental are localizing more of their tech capabilities to adapt to the fast-changing Chinese market.

Here’s a roundup of some of the upcoming automotive tech that debuted at this year’s auto show in Shanghai.

Baidu: Seeking long-term ties with carmakers

Two years after setting up a dedicated unit to develop self-driving tech for consumer cars, Baidu made a strong commitment to automakers by declaring itself their “best partner” in smart, electric vehicles in China in a statement made on April 16 ahead of this year’s show.

Low-cost deployment is one of its major selling points. The search engine giant launched the Apollo City Driving Max on April 16, claiming it is by far its most powerful advanced driver-assistance system (ADAS). The AI giant also claims that the new system is the only pure vision-based approach for automated driving on Chinese urban roads, meaning it operates without the use of pricier lidar sensors.

Baidu also introduced its new high-definition mapping technology at a relatively lower cost than rivals, adopting a crowdsourced approach to compile map data to help EVs get around by themselves. “This is unique to Baidu,” said corporate vice president Rob Chu. The company expects such efforts to pay off in the long run, allowing it to form consistent and reliable partnerships with auto manufacturers.

Huawei: Competing against Tesla’s software offerings 

Huawei has had a bumpy ride after making a splash at Auto Shanghai 2021 with the public debut of its assisted driving technology, as two of its major manufacturing partners – BAIC’s Arcfox and lesser-known Seres – have both found themselves facing lackluster sales.

On April 16, the technology giant unveiled the second generation of its Advanced Driving System, which was designed to let vehicles navigate not only on highways but also around complex city streets like Tesla’s full self-driving beta software. Huawei’s consumer business head Richard Yu made the announcement in Shanghai, claiming that the Chinese telecom firm has surpassed Tesla in handling on- and off-ramps among other traffic scenarios, according to its testing results.

The system will be released to users in at least 45 Chinese cities by the end of this year, where high-definition mapping services are currently unavailable to them.The system was built upon multiple sensors and cameras to reduce the reliance on mapping. A high-end version of the Aito M5 electric crossover is the first model to adopt the technology, while the Avatr 11, co-developed by Huawei and its partners Changan and CATL, and the Arcfox Alpha S will also adopt the system. 

Bosch: Chinese OEMs a major growth driver

German auto supplier Bosch debuted its fourth-generation computing platform for in-car entertainment at the Shanghai auto show, highlighting the ongoing trend of cars relying on software to differentiate themselves in a crowded marketplace.

Entirely developed by its Chinese team, the information domain computer has undergone four upgrades over the past two years, facilitating automakers’ fast and customized development of in-car applications, according to Dr. Markus Heyn, chairman of Bosch’s mobility solutions business sector. This also enables vehicle owners a seamless and smart cockpit experience both in the vehicle and on the cloud.

Heyn said he was personally impressed by the wide range of new brands and electric vehicles that are on display at this year’s Auto Shanghai. “I am extremely proud that Bosch is a part of this rapidly growing and evolving industry and serves as a global partner for our customers in China,” added Heyn. Chinese original equipment manufacturers (OEM) accounted for nearly 60% of the mobility solutions business sector of the engineering group’s total sales in China last year.

Continental: Keeping up with China’s fast transition to EVs

Continental on Wednesday showcased for the first time a high-performance computer that is capable of assisted driving and body control, giving carmakers a more agile process of software development. More than 30 new vehicle models will be using Continental’s supercomputing solution by 2024, the company said, with GAC’s EV unit Aion becoming one of its early adopters.

The German auto parts maker sees standardization as a strength in keeping up with China’s fast transition towards smart EVs. The company set up a joint venture with local startup Horizon Robotics back in late 2021.

“A lot of the cost in ADAS is coming from developing specific software. We figure out what is a common part and roll out standard components in a fast and cost-competitive way, and then we add some specific functions to make a difference,” said Frank Petznick, head of the autonomous mobility business area at Continental. “I think this is the key [to success] in China and many Western companies have not understood that yet.”

Horizon Robotics: Landing BYD as a major client

This year’s Auto Shanghai also reflected the rise of domestic suppliers. Horizon Robotics is one of the Chinese suppliers helping auto companies to secure their supply chain and reduce costs. Horizon said on Tuesday that it will team up with Chinese EV leader BYD to develop software and hardware systems for automated driving to use in the latter’s cars.

Multiple BYD cars will be manufactured later this year based on Horizon’s Journey 5, which is made specifically for computing in connected and intelligent vehicles. The move marks “a significant achievement” in the two companies’ strategic collaboration since 2021, according to Dr. Yu Kai, founder and CEO of Horizon Robotics.

Backed by a list of auto majors including Volkswagen, Horizon already supplies tech to automakers including Geely and Li Auto. The company also announced a partnership with EV maker Hozon Auto on Tuesday to build assisted driving platforms set to hit the market as early as 2024.

Geely on Thursday revealed the L7, its first model in the new Galaxy electric vehicle lineup. The compact SUV enters the market as a direct competitor to BYD’s popular Song Plus model, with a similar size, driving range, and price tag.

Delivery of the L7 is scheduled to begin in the second quarter. Geely will release anywhere from one to seven models of the electrified, software-defined Galaxy lineup by 2025, targeting medium- to high-end buyers with a range including four plug-in hybrid electric vehicles (PHEVs) and three all-electrics, Gan Jiayue, chief executive of Geely Automobile Group, said during a press event.

Why it matters: Geely aims to make the long-anticipated Galaxy L7 a high-volume, landmark model and wants to become China’s next answer to BYD and Tesla in the country’s crowded electric vehicle race.

Details: The L7 is a similar size to BYD’s Song Plus SUV, at 4.7 meters in length with a 2,785-millimeter-long wheelbase. The plug-in hybrid will have a driving range of about 1,370 kilometers (851 miles) on a full tank of fuel and a full charge, compared with BYD Song Plus’ 1,200 km range.

• The vehicle will be equipped with an operating system designed by Ecarx, an auto chip software firm backed by Geely founder Li Shufu, and uses Qualcomm’s 7nm cockpit chip 8155. The setup allows passengers to play high-demand triple-A games while the car is in motion. 
• Pre-bookings for the SUV are now open, for a deposit of RMB 599. The car is estimated to fall in the price range of RMB 150,000 to RMB 300,000 ($21,647 to $43,294). By comparison, BYD’s Song Plus DM-I is priced in the range of RMB 154,800 to RMB 218,800. 
• Geometry, another of Geely’s affordable premium EV brands, is to pivot to the budget segment of the market with a price range of under RMB 150,000. Vice president Lin Jie told Chinese reporters he expects the two lineups to strengthen the company’s presence in segments that could account for more than 65% of the future new energy vehicle market (including EVs and PHEVs).

Context: Geely expects more than a third of its car sales to be either all-electric or hybrid vehicles this year, vowing to sell at least 600,000 electrified cars as part of a 1.65 million volume goal in 2023. The Zhejiang-based automaker posted total sales of roughly 1.4 million units last year, of which around 328,700 were electrified.

• Geely operates several EV brands, including Lotus, Polestar, and Zeekr, while Geometry contributed nearly half the company’s 2022 NEV sales. Zeekr has announced a goal to double sales of its premium EVs with an average price above RMB 330,00 to 140,000 units this year.
• BYD’s Song model was China’s most popular SUV of any kind last year, recording sales of 478,811 units with an annual growth rate of 137.4%, according to figures compiled by the China Passenger Car Association. Tesla followed with delivery of 315,314 Model Y vehicles, while Great Wall Motor booked sales of 250,120 units of the Haval H6.

Baidu will launch its first electric vehicle model using its new conversational artificial intelligence (AI) technology, with the intention of providing a ChatGPT-like experience that enables natural conversation between owners and their vehicles, an executive from the company said on Tuesday.

Why it matters: This is the latest move by the Chinese technology giant to improve its core search engine business and drive widespread adoption of AI for a range of uses.

Details: Jidu Auto, the electric vehicle arm of Baidu, will be the first company to adopt AI technology at this level of sophistication for smart EVs, chief executive Xia Yiping told reporters at a corporate event in Beijing on Tuesday.

• Xia reaffirmed the company’s plan to deliver its first production model, the Robo-01 sports utility vehicle (SUV), in the third quarter of 2023 with a “very competitive” price tag (our translation).
• Launched in October, the crossover can travel around 600 kilometers (373 miles) on a single charge, as TechNode previously reported. Pricing details have so far only been revealed for a special edition version of the vehicle, which will start from RMB 399,800 ($55,245).
• Xia said he was optimistic about the company’s sales growth in light of Tesla’s significant price cuts, adding that the sudden move reflected the US automaker’s waning competitiveness in the Chinese market.

READ MORE: Baidu’s EV firm Jidu aims to take on Tesla

Context: Baidu said on Feb. 7 that it has been pushing internal testing of its ChatGPT-like chatbot tool called ERNIE Bot, or Wenxin Yiyan, and intends for it to make a public debut next month.

• OpenAI’s ChatGPT bot has sparked a craze in the Chinese internet space, prompting dozens of Chinese tech companies, including Alibaba, NetEase, and JD.com, to announce their own AI chatbots over the past month.
• Media outlets and traditional businesses are also lining up to incorporate the latest AI technology into their services. Trip.com Group, China’s biggest travel services provider, announced today it is among the first batch of partners listed to integrate Baidu’s chatbot technology into its service platform.

READ MORE: Alibaba, Baidu, NetEase, iFlytek…Chinese companies rushing to prove they have tech similar to ChatGPT

Skirmishes have surrounded China’s speedy uptake of electric vehicles in the past year, with industry giant BYD reigning supreme but an increasingly large crowd of challengers looking to muscle in on the action. Once-promising startup Xpeng Motors and major automaker Great Wall Motor have been among those to falter in 2022 – and the war is far from over.

Industry observers link BYD’s success to China’s national shift towards electric vehicles, the company’s highly-integrated supply chain across key components, and a rising consumer preference for high-quality, cost-competitive automobiles as recession looms. 

Xpeng’s recent setbacks, however, reflect structural weaknesses at the company, including limited competitiveness and low operational efficiency in a crowded marketplace. Now, the risk of falling behind the competition has become real for the Guangzhou-based company.

Even Tesla faces an eroding market share in a highly competitive field, thanks to an onslaught of new models from various domestic rivals. Meanwhile, foreign auto giants from Volkswagen to Ford have long lagged behind Chinese counterparts in transitioning to green energy.

Here, we look at the annual results of China’s EV leaders and attempt to explain the dynamics behind some of the biggest winners and losers of the past year.

Winners and losers 

Despite being a bright spot in a slowing auto market, China’s two-year run of huge growth in the EV sector hit unexpectedly fierce competition as it shifted into a lower gear in the second half of 2022.

BYD was the biggest winner of the year, with annual sales of 1.86 million electric cars. The company’s output was more than triple 2021’s figure of around 600,000 units, comfortably exceeding its goal of 1.5 million units.

Tesla was left a distant second. The company’s sales started to slow last year as concern grew about an underlying mismatch between supply and demand. In 2022, the US automaker delivered 439,770 China-made vehicles to local customers, a 37% increase from a year ago and significantly lower than its 50% growth target for overall sales volume.

Besides BYD and Tesla, multiple Chinese EV makers including Nio and Xpeng embarked on 2022 with optimism and ambitious sales targets. However, only a handful managed to hit their goals. Aion (the EV arm of state-owned automaker GAC) and Hozon kept their word by selling around 271,000 and 152,000 EVs respectively last year. Geely’s premium EV brand Zeekr also achieved its goal by delivering just over 71,000 vehicles.

China’s US-listed EV makers mostly underperformed. Nio played tough to secure around 80% of its 150,000-vehicle delivery goal, while Xpeng delivered just over 120,000 units of its 250,000 unit target.

Why BYD dominated the market

In December, when most automakers struggled to protect their market shares by offering generous discounts as the Chinese government phased out EV subsidies, BYD went the opposite way by announcing a price rise of up to RMB 6,000 ($870) across its lineup. The move proved BYD’s role as “price maker” in the mass market, analysts at Jefferies wrote in a Dec. 1 report.

Analysts attributed BYD’s dominance partly to its success in ramping up manufacturing capacity and building a secure, integrated supply chain from batteries to chips. In 2022, when the company tripled its annual car capacity to around 3 million units at its eight manufacturing locations, according to public information gathered by investors, it also more than doubled its battery capacity to 285 gigawatt-hours (GWh), according to estimates by Founder Securities. A company spokesperson declined to comment on the capacity figures.

Also, the automaker has adopted a dual strategy of betting on both all-electrics and plug-in hybrid EVs (PHEVs) as range anxiety continues to be a top concern among local buyers. BYD offers nearly 70  models in major configurations and price categories. This helps the company stand out in a crowded market where many competitors pick a type and limit buyers’ options.

Why Xpeng and Great Wall Motor are losing ground

As China’s EV sales reported nearly 100% annual growth in 2022, Xpeng Motors and Great Wall Motor are among the most surprising names for whom sales growth dipped well below the industry average. The two companies sold 120,757 and 131,834 EV units last year, posting a flat increase of 23% and a 4% decline from a year earlier, respectively.

Multiple factors have put pressure on the two companies, including weaker consumer sentiment and interest rate hikes. 

The sales slump at Great Wall Motor indicates a major setback in the company’s slow shift to EVs. In 2022, monthly sales of the company’s Haval H6, once China’s top-selling gas-powered crossover, fell 75% to around 20,000 units from historic highs, as it appeared to be outpaced by popular EV models produced by Tesla (Model Y) and BYD (Song Plus). 

Ora, the company’s dedicated EV sub-brand, saw sales decline by 23% year-on-year to 103,996 units. Nevertheless, Great Wall Motor’s management has big plans for 2023 — promising to launch more than 10 EV models, including five new PHEVs under the Haval brand and two new models under the Ora marque.

Xpeng is facing a more complicated external environment, as well as the threat of increased pressure from rivals, said David Zhang, a school dean at Jiangxi New Energy Technology Institute. Not only are sales of big name rivals such as BYD and GAC’s Aion gaining momentum, but younger makers such as Hozon and Leapmotor are increasingly catching up. That’s the broader context behind Xpeng currently restructuring its business, according to Zhang.

Meanwhile, Xpeng is exposed to a potential demand mismatch risk in the short-term, as consumer confidence in vehicle intelligence technologies lags behind ambitious plans to bring self-driving cars to the market, analysts from Zheshang Securities told local media outlet Jiemian.

The Alibaba-backed EV maker has pledged to put more effort into overall car-making after reporting three consecutive months of dropping sales as of October and losses of RMB 6.78 billion ($1 million) for the first three quarters of 2022. It is also dealing with an aging product portfolio and implementing cost control measures to boost efficiency and drive sales, with chief executive He Xiaopeng promising to refocus on the core company after spending some time and energy on emerging businesses such as flying cars.

“We have high expectations for 2023. It’s a game of both competence and persistence. We have winning cards to play the game, and the evolution is making good progress,” a company spokeswoman said when contacted by TechNode.

Trend 1: Bring everything in-house

In-house manufacturing of key components has become one of the biggest trends in China’s EV industry over the past year, as many automakers look for ways to reduce supply chain vulnerability amid persistent chip shortages and the surging cost of battery materials. Among them, BYD is widely seen as a role model for this vertical integration strategy: the automaker builds its own supply chain and performs most of the activities required to bring its vehicles to market.

Already the world’s second-biggest battery maker and a major domestic supplier of power semiconductors for automobiles, BYD is now looking to expand production capacity significantly and accelerate the development of new products. Founder Securities expects BYD’s capacity to increase to 445 GWh-worth of batteries to close the gap with dominant player CATL by the end of 2023. In November, the company abandoned an initial public offering plan for its semiconductor unit as it decided to focus instead on expanding the capacity of a local plant by 80% to reach 360,000 wafers in 2023.

Other major industry players, from state-owned GAC to US-listed Nio, have also been racing to develop battery and semiconductor technologies in-house to ensure a secure supply of the key components. Here are some recent moves and potential developments for the companies heading into 2023:

• On Nov. 18, Svolt, an EV battery startup backed by Chinese automaker Great Wall Motor, filed initial paperwork for a public share sale on Shanghai’s Nasdaq-style Star market. The company is looking to raise RMB 15 billion to build three manufacturing plants with a combined annual capacity of around 106 GWh.
• On Dec. 29, GAC began building an RMB 2.2 billion drivetrain plant in Panyu, a city in the southern province of Guangdong, with mass production to kick off at the beginning of 2024. Initial capacity will enable it to assemble drivetrain systems for 400,000 battery EVs and 100,000 plug-in hybrid vehicles annually by 2025.
• On Dec. 21, Xpeng confirmed that it has set up an RMB 5 billion subsidiary to produce battery packs on its own but will still source battery cells from partners. On Oct. 25, peer Nio made a similar move by forming an RMB 2 billion subsidiary for battery manufacturing, in addition to a $32.8-million research facility for battery development.
• On Oct. 10, Chinese media outlet LatePost reported that both Nio and Xpeng had formed hundred-strong teams to work on chips for autonomous driving, while Li Auto had been hiring chip designers for more fundamental semiconductor components.

Trend 2: Short-term bumps

Analysts have warned about the prospects of a bumpier year for EV makers in 2023, and sure enough, the industry is already seeing some sharp movements. On Jan. 6, Tesla made a big splash by cutting the prices of its China-made vehicles by between 6% and 13.5%, a move that Sun Shaojun, a popular Chinese car blogger, described as kicking off an industry-wide battle for survival in the year ahead.

Sun added that many rivals would probably have to follow suit in the face of such a big promotion by an industry leader. Meanwhile, analysts at Bernstein expect competition to heat up with as many as 126 new battery EV models and 55 new plug-in hybrid models coming to market in 2023, a 40-50% increase on last year.

In anticipation of a post-Covid recession and in light of EV subsidies being scrapped, sales are expected to slow this year. Credit Suisse’s sales forecast of 9.4 million EV sales in China is one of the more bullish on Wall Street, while Bernstein more cautiously holds that 8 million units will be sold in the country this year.

An ongoing growth story 

And yet, long-term growth prospects remain buoyant, as demand shifts from policy-led to consumer-driven, Bernstein analysts wrote in a Jan. 5 report. UBS shared the sentiment, expecting the new energy vehicle (NEV) penetration rate, mainly for all-electrics and PHEVs, to grow by 10% this year to reach 37% of all new car sales.

2022 proved to be a big year for Chinese EVs. The central government achieved its goal of EV adoption approaching 25% of total car sales three years ahead of schedule, as industry sales nearly doubled to 6.8 million units. Still, pressure on margins is likely to persist in the near term for smaller companies, which have already been exposed to high battery material costs.

Looking ahead, China has cemented its growth momentum in the global EV race, but industry players should expect short-term sacrifices to hit their profits as they glimpse a bigger and brighter future.

Xpeng Motors is aiming for profitability on an operating level by 2025, according to an internal speech from chief executive He Xiaopeng to employees. The electric vehicle maker will also focus on redeveloping business strategies, dealing with corporate restructuring issues, and bolstering corporate value in 2023. 

Why it matters: He’s comments come on the heels of a turbulent year for Xpeng during which the company faced major setbacks, including a 23% sales drop in the second half of 2022 and an 80% plunge in market capitalization from a year ago.

Details: Xpeng expects to break even in 2025 with its earnings margin before interest, taxes, depreciation, and amortization reaching 17%, according to a report from 36Kr that cites comments made by He at an internal meeting on Wednesday.

• The management is more optimistic than some analysts’ predictions. Bernstein estimates that Xpeng will turn its adjusted operating margin from -5.1% in 2024 to 0.3% in 2025. That number was estimated to be -33.1% last year, according to Bernstein.
• He also pointed out that employee morale at the electric car company is low due to falling sales and share prices and that Xpeng’s productivity as a company is not where it should be, vowing greater restructuring efforts to simplify operations this year.
• Meanwhile, He highlighted the company’s push to forge ahead with vehicle development from the perspective of customers, adding that all future Xpeng vehicles will be equipped with safety-based driver assistance technologies.
• Xpeng will also accelerate its overseas expansion in the next few years, with plans to launch two new vehicle models for the global market in 2023, followed by a third in 2024, according to He.

Context: Xpeng reported an annual growth rate of 23% in vehicle sales in 2022, significantly lower than the industry average of around 90% and falling behind US-listed peers Li Auto and Nio, who posted year-on-year growth of 47% and 34%, respectively.

• The Alibaba-backed EV maker has been undergoing a major restructuring since late last year with the establishment of several committees and financial teams to enhance efficiency and control costs. It also announced price cuts of up to 15% for its vehicle lineups earlier this week amid rising competition with Tesla.
• Xpeng is not the only Chinese EV maker taking steps to streamline operations. On Jan. 1, Nio chief executive William Li told employees that low-productivity teams and insignificant projects would be “streamlined and optimized” this year in light of a slight increase in budget, according to an email seen by 36Kr.

Nio Capital plans to incubate a separate brand called Zhixing (our translation) that focuses on making luxury off-road EVs and could launch its first model at a price of around RMB 1 million ($150,000) in 2025, local media outlet LatePost reported.

Why it matters: The move could help Nio to enter a more expensive segment and extend its market reach by managing a growing portfolio of targeted brands. The Chinese electric vehicle maker already has a strong reputation among China’s upper middle class. 

Details: Zhixing, an EV startup formed in early 2022, will raise a seed round of “dozens of millions of dollars” from Nio Capital, a venture capital firm founded by William Li, chief executive of the namesake automaker, LatePost reported on Monday citing unnamed sources.

• Zhixing will target affluent, adventurous Chinese customers with luxury off-road electric vehicles, planning to launch its first model at home and internationally in 2025. The sports utility vehicle will be priced at around RMB 1 million and built on the third generation of Nio’s NT platform, the report said.
• Zhixing will also collaborate with Nio for supply chain and charging infrastructure. The partnership could help the firm save a significant amount on development costs. 
• The vehicles will feature an 800-volt battery system for ultra-fast charging and a swappable battery pack to access Nio’s recharging network.
• Founded by Zhao Lei, a former senior director of user experience operation at Li Auto, Zhixing is establishing teams across China, Europe, and America. It has hired Roger Malkusson, a former vice president of vehicle engineering at Nio, as head of Europe.
• On Sept. 27, Zhao officially set up Zhixing (Beijing) Information Technology Co., Ltd. with registered capital of RMB 100 million, according to the Chinese corporate information platform Tianyancha.
• Representatives of Nio and Nio Capital declined to comment when contacted by TechNode on Tuesday. Malkusson did not respond to TechNode’s request for comment.

Context: Experts say that there remains strong demand from wealthy individuals for luxury EVs in the coming years despite broader economic challenges, with several Chinese automakers venturing into the booming segment. Luxury cars priced above $80,000 will expand at a compound annual growth rate of 8% to 14% through 2031, while the markets for cars priced below $80,000 could remain relatively flat from a global standpoint, McKinsey & Company said in a report on July 8.

• BYD has made a similar move by showcasing its first two luxury car models under its new Yangwang brand on Jan. 5 and will open separate showrooms for the brand in several Chinese cities in the first quarter. GAC also said its first sports car under the Hyper marque will have a starting price of RMB 1.29 million.
• Geely completed its majority acquisition of the British sports car brand Lotus in 2017. Last October, the carmaker launched its first electric SUV, the Eletre, with a starting price of RMB 828,000. Nio Capital also has a minority stake in Lotus.
• Nio is also entering the affordable EV segment with plans to launch two sub-brands to target more price-sensitive buyers with a budget under RMB 300,000, while Nio’s namesake brand sits in the middle with a price category between RMB 300,000 and RMB 500,000.

Chery, a Chinese automaker and a manufacturing partner of Jaguar’s Land Rover, will launch a new electric vehicle brand in March in the hope of getting a slice of the country’s growing premium EV segment, local media reported.

Why it matters: State-owned Chery is the latest automaker to partner with Huawei for an electric car manufacturing project, following similar moves by BAIC, Changan, and GAC. The new brand could give it the potential to challenge market leaders and help Huawei expand its in-car reach.

Details: The EV-only brand will target high-end car segments and will have a similar relationship to parent Chery as Zeekr has to Geely, sources told Chinese trade media Yiche on Monday.

• Chery plans to build the first two models, including a sports sedan and a large-size crossover, based on its new EV platform E0X and use Huawei’s in-car software and Qualcomm’s 8295 processor, the report said.
• Scheduled to debut in March and for delivery by the end of 2023, the new models will have a driving range of at least 700 kilometers (435 miles) on a single charge and be powered by CATL’s latest “Qilin” battery pack, financial media outlet Caixin reported, citing people familiar with the matter.
• The vehicles will also utilize artificial intelligence chips from Horizon Robotics, which allow users to access advanced driver assistance capabilities such as automatic lane switching on Chinese highways. Chery is an investor in Horizon, alongside Volkswagen and its partner SAIC.

Context: In September, Chery announced plans to make EVs in collaboration with Huawei under the latter’s Zhixuan (“smart choice”) model, by which the smartphone giant not only supplies key components but also allows partners to sell EVs through its retail sales channels. The companies said that one of the first two models would be priced above RMB 300,000 ($42,944).

• Last week, Huawei and Chery also revealed respective partnerships with battery giant CATL, making this a three-way partnership, similar to that between Huawei, CATL, and Changan for the launch of premium EV brand Avatr last November.
• Huawei and Seres, a smaller manufacturing partner, have made impressive sales gains with deliveries of more than 66,000 Aito-branded EVs in the nine months that ended in November. The two companies plan to launch their third production model late next year, Chinese media LatePost reported Tuesday.
• Known as a brand of budget cars, Chery reported sales of more than 221,000 new energy vehicles, mainly all-electrics and plug-in hybrids, for the first 11 months of this year. This represented a 148% year-on-year increase and accounted for around 20% of its total sales.

Bosch said on Monday it is co-developing a new generation of its advanced driver assistance system (ADAS) with Chinese self-driving car company WeRide, aiming for delivery in late 2023. The system has also secured the first pilot customer, which the German auto parts maker has yet to disclose. 

Why it matters: This is the latest example of German auto firms strengthening their in-car software offerings in the face of competition from Tesla and local peers like Huawei. 

Partnership with WeRide: Delivery of Bosch’s advanced driving technology is scheduled for late 2023 to an undisclosed Chinese car manufacturer. The tech will be similar to Tesla’s Autopilot system and enable cars to operate on both Chinese motorways and busy urban streets.

• The two companies hope to secure two to three new clients by that time. Engineers are currently training and fine-tuning the automated driving algorithms running on production cars, Zheng Xinfen, a senior vice president of Bosch China, told reporters during a media event on Monday.
• Bosch revealed its investment into WeRide in May when Tony Han, chief executive of the autonomous vehicle unicorn, told Chinese media that the collaboration would be the largest of its kind in terms of order volume in China.

An indispensable market: China has been leading the world in electric vehicle adoption and in-car technology development, said Xu Daquan, executive vice president of Bosch China, citing examples such as strong demand from local customers for automated driving software.

• Xu noted that the auto parts maker has been facing urgent requests from local clients to deliver products as quickly as six months as a result of the rising consumer preference. “Accordingly, it makes sense for us to localize research and development with partners to meet the trend.”
• Xu added that German Chancellor Olaf Scholz’s recent trip to Beijing reflected the stance of German industries on business relations with China. “China is such a big market, and it’s vibrant. In that sense decoupling from China should not be a pursuit of German businesses.”

Cash-burning competition: Looking to generate revenue from intelligent and connected car services, industry players have placed their cash on future areas such as autonomous driving and digitalization.

• In April, Volkswagen opened a China subsidiary of its standalone software unit, Cariad, as the German automaker looks to develop products tailored for local customers. This was followed by a $2.3 billion investment to set up a joint venture with Chinese auto tech unicorn Horizon Robotics a few months later. Cariad recorded 978 million euros (roughly $1 billion) in losses for the first half of 2022.
• US-listed Chinese EV trio Nio, Xpeng Motors, and Li Auto favor an in-house strategy. On Friday, Nio’s CEO William Li told analysts that he expected the company’s research and development expenses to remain steady at around RMB 3 billion ($430 million) each quarter, with no significant contribution from automated driving software to its gross margin.
• Huawei has partnered with state-owned automakers BAIC and Changan in automotive software, in addition to selling EVs with automaker Seres. Meanwhile, big automakers SAIC and General Motors have turned to Chinese startup Momenta for partial automation technology.
• Volkswagen in January announced a partnership with Bosch to develop automated driving software and use them on its vehicles since 2023, Reuters reported. Speaking to analysts during an earnings call on Oct. 28, Volkswagen’s CEO Oliver Blume said the partnership with Bosch will be “more for the Western world.”

Jidu Auto, the electric vehicle arm of Chinese search engine giant Baidu, is joining a long list of Chinese companies to take on Tesla by positioning the brand in the premium segment and highlighting its strength in autonomous driving tech.

In recent media appearances, Xia Yiping, chief executive of Jidu, stated that the new automaker can compete with Tesla by leveraging the data and algorithm prowess from its parent company.

A former tech lead of in-car connectivity at Fiat Chrysler, Xia noted that he believes the race among automakers to build intelligent vehicles has only just begun in China.

On Oct. 27, Jidu showcased a special version of its first consumer car Robo-01 that it made in partnership with Chinese automaker Geely. The company plans to launch the standard version next April, which Xia told TechNode could be “very competitive” on price (our translation). He also noted a short-term target of selling at least 10,000 vehicles monthly.

Below is the highlights from a group interview at the car launch event, which have been translated, condensed, and edited for clarity:

Is it too late for Jidu to enter the Chinese EV game as a new competitor?

The EV offerings from our competitors are far less diversified, especially regarding the intelligent and connected capabilities they can offer. The competition has just begun, which I believe will be more about the deployment of semiconductors, algorithms, and computing power rather than vehicle manufacturing, as time goes on, and that’s where our capabilities lie.

We are looking to be a serious player in the medium-to-high-end EV segment, especially in the price range of RMB 250,000 ($34,370) and above, and where in-car intelligent technology has been a major selling point. Our core users are young, educated, tech-savvy, and upper-middle class, and in that sense, there is a big competitive overlap between Jidu and Tesla.

If you compare Jidu’s Robo-01 with Tesla’s Model Y, I would say our vehicle provides a roomier and more luxurious interior, as well as a longer driving range. 

Several competitors have already begun releasing advanced driver assistance systems (ADAS) for city environments. What is your advantage and how do you ensure the reliability of vehicle software?

(Note: Rival Xpeng Motors on Sept. 19 released its so-called City Navigation Guided Pilot, a feature similar to Tesla’s Full Self-Driving that allows vehicles to navigate on both highways and city streets. Huawei’s partner Arcfox closely followed with the release of its Navigation Cruise Assist (NCA) software a week later.)

Jidu’s advanced driver assistance capabilities, including those for highways and urban streets, will be fully ready once we begin vehicle delivery to customers later next year. All the variants of Robo-01 will be equipped with lidar sensors and applicable to all Jidu’s intelligent functionality.

We are developing the most advanced electrical and electronic architecture, where we must ensure the complexity of future vehicle systems and fulfill the higher demand for network bandwidth and functional safety. We run algorithms on Baidu’s supercomputers, and I think that’s one of our advantages.

Auto intelligence is not just about software engineering. You need to fully understand when it comes to where the semiconductor industry is headed and how sensors can better enable autonomous driving, among other fields. Not everyone can do that, but that’s in our DNA.

Jidu will begin delivery of Robo-01 later next year. Can you share insights on production plans, retail networks, and charging infrastructure?

Robo-01 is built based on Geely’s SEA (Sustainable Experience Architecture) platform. In early October, we aligned the production plan of Robo-01 for next year with our manufacturing partner and made reservations for many key components ahead of time.

(Note: In September 2020, Geely launched a modular, open-source vehicle platform for EVs called the Sustainable Experience Architecture (SEA), which has been used to build its own EV sub-brands like Lynk & Co, Zeekr, and Polestar.)

We plan to sell our cars via a direct sales model in the early stages so that we can maintain control over our brand image. Jidu’s first flagship store is about to open in Shanghai and we plan to enter 46 domestic cities by 2023.

When it comes to charging networks, we are building a number of charging points along with our showrooms and service centers, but we will also collaborate with public EV charge point providers to expand our footprint.

The Covid-19 pandemic has not only changed the ways people live but also accelerated the development of metaverse technologies such as virtual reality (VR) and augmented reality (AR) over the past few years. This unleashes the opportunity for internet users to explore a connected, three-dimensional online world through avatars and other ways.

Representatives from consumer electronics firm HTC and Nio-backed Chinese AR glass maker Nreal talked about the ongoing migration from the mobile internet space to a virtual-physical blended metaverse at the BEYOND Expo 2022 tech conference, held online at BEYOND Metaverse. They also discussed the potential of the metaverse and the challenges in scaling the technology.

The text below has been condensed and edited for clarity.

Xu Chi, founder and CEO of Nreal

It has been quite challenging for us during Covid because we have a relatively small team but operate in multiple countries. Especially during the early days of the pandemic, it was hard for us to go to local stores, gather customer feedback, and assemble offline campaigns to attract customers.

However, it’s also an opportunity for us because people can’t go out too often, and they would love to browse online to find some cool gadgets. I think VR/AR definitely got some boosts out of that, and many companies are taking this opportunity. Instantly, you have a chance to lower the cost for customers to try something new. There has been a boost for VR/AR in general over the last couple of years, and I do think that trend will continue even after the Covid period.

We are building a computing platform that is getting ready to host more and more 3D content and can attract people coming from the mobile internet to the spatial internet or metaverse. We must display true 3D content with VR/AR devices, and there must be a more complicated, brand-new optical display that is driving the entire thing, compared with the traditional 2D display technology we’ve been using for cellphones and televisions.

Internally, we call the metaverse the spatial internet, and it’s kind of like the next internet. We also think that’s like five to 10 years ahead of us, and we need to find out what are the best use cases that people would be interested in dedicating their time to them. How we can actually evolve from today into the future means a lot of new questions and opportunities as well.

Alvin Wang Graylin, president of HTC China

It’s clear that over the last couple of years, the Covid situation has actually created an acceleration for the adoption of and interest in [VR/AR], while there is growing heat and hype around this metaverse concept. These trends are creating a new inflection point, both in terms of customer interest to adopt as well as investor interest to put more money into this space, with entrepreneurs and content creators both wanting to get into the space.

Overall, I think we’re quite happy with where things are headed, and we recently released completely new generations of our products. Now, these devices are getting to a point where they’re much more accessible and comfortable and attract customers that used not to be open to using these devices. That’s going to help gain a new customer base and expand the overall market.

There’s a lot of misunderstanding of what the metaverse is. I think it’s important to kind of set the stage and say: Hey, the metaverse is something that is coming. It’s going to take five to 10 years to realize in terms of having a fully interoperable, open-world concept where people can get into it with any device, whether an AR device or a VR device and be able to go into any of these 3D virtual worlds with a common ID. That’s what the metaverse promises.

Metaverse is kind of the 3D version of the internet that we’ve been building over the last 30 years. In the near future, most people will probably consume it on their PCs or their tablets, because those are the devices that are out there in the world. But as time goes on, we’ll see more people migrate to a more immersive experience with an XR [Extended Reality] device.

Arcfox, an electric vehicle brand launched by Chinese automaker BAIC, said it had started providing car users with its long-awaited Navigation Cruise Assist (NCA) software, a semi-autonomous driving feature developed on Friday by Huawei.

Why it matters: The introduction of Huawei’s automated driving capabilities comes nearly a year later than expected. It will test whether the Chinese telecommunications giant can provide a competitive edge for partnered EV makers.

Details: Starting Sept. 23, the NCA assistant driving feature has been available to owners of the “HI (Huawei Inside)” version of the Arcfox-branded Alpha S sports utility vehicles in Shenzhen. It will later be expanded to Beijing and Shanghai, a company spokesperson told Chinese financial media outlet Caixin, without giving a timeframe.

• The feature allows Arcfox’s cars to change lanes and speed up or slow down on highways and city streets. It also controls acceleration and braking to maintain the desired distance between the SUV and the vehicle ahead, said an official statement.
• Like other similar offerings from rivals such as Nio and Xpeng, the NCA uses a system of 34 sensors and cameras, along with high-definition maps, to realize virtually automated driving on Chinese urban streets.
• As with its competitors, the system is qualified as an advanced driver assistance technology, meaning a driver is still required to take full responsibility for driving tasks and monitor the environment at all times.

Context: Chinese automakers have slowly increased the availability and capabilities of their intelligent driving systems, which are mostly built upon a high-definition map and subject to government approvals for using geographic data, Reuters reported.

• Alibaba-backed Xpeng Motors, on Sept. 19, began testing City Navigation Guided Pilot software with selected drivers in its headquarters city of Guangzhou and is currently waiting for regulators to greenlight a wider release to other cities.
• Arcfox’s driving software was initially set to be available to car owners on major provincial highways and China’s four top-tier cities – Beijing, Shanghai, Guangzhou, and Shenzhen – by the end of 2021 and then to users from at least 20 major cities.
• In April 2021, Chinese automaker BAIC showcased the Alpha S, a premium electric sedan under the Arcfox marque equipped with Huawei’s HI system. Vehicle deliveries began in July, after more than eight months of delay.
• State-owned BAIC sold 6,723 Arcfox-branded vehicles in the first half of this year, falling far behind rivals. 
• Shenzhen-based Huawei also collaborates with automakers Changan and Seres to enter the booming EV market.

Aito, a Chinese electric vehicle brand backed by Huawei, received more than 10,000 pre-orders for the M7 in just two hours, after it was unveiled on Monday. The new model is the brand’s second production vehicle featuring Huawei’s HarmonyOS operating system for cars.  

Why it matters: While reservations do not always translate into actual sales, the M7 has captured people’s attention, signaling that Huawei is turning into a serious rival to existing carmakers since entering the burgeoning EV space about one year ago.

• Experts believe that the new car will become a direct competitor to Li One, a popular large plug-in hybrid vehicle launched by Chinese EV maker Li Auto that has similar configurations and a similar price point. Aito has the potential to achieve a sales volume of up to 100,000 units for this year, state media outlet Shanghai Securities News reported Monday, citing analysts from China Securities.

Details: More than 10,000 people pre-ordered the Aito M7 sports utility vehicle in the first two hours after the car brand began accepting RMB 1,000 ($149) deposits on Monday afternoon, a company spokesman told TechNode on Tuesday.

• With a four-cylinder, 1.5-liter engine developed by Huawei and a 40.6 kWh battery pack supplied by CATL, the M7 will be able to go as far as 1,220 km (758 miles) on a full tank and 100% battery charge. It consumes 6.85 liters of fuel per 100 km, well below the 7.8 liters of Li Auto’s L9 SUV and the 10.8 liters of the BMW X7.
• The car uses Huawei’s HarmonyOS operating system, enabling drivers to access “all the mobile services“ from Huawei’s app store, Richard Yu, chief executive of Huawei’s consumer business group said during a press conference.
• The six-seater luxury SUV will have a starting price of RMB 319,800 ($47,737) and will be delivered to customers in August. More than 600 Huawei stores around China will provide test drives starting July 23, and that number will be increased to over 1,000 stores by year-end, according to Yu.

Context: Huawei and its manufacturing partner Sokon have seen a steady increase in sales of the M5, their first vehicle under the Aito brand, shipping 7,021 crossovers in June, a 40% increase from a month earlier.

• According to the latest figures, Aito has reached total delivery of 18,317 units in just four months since delivery began in March. Prior to this, the two companies had experienced an initial setback, delivering only around 8,000 Seres-branded electric crossovers in 2021 after unveiling in April, last year.
• Huawei’s core business growth is still under pressure from US sanctions with revenue dropping by 14% year-on-year to RMB 131 billion in the first three months of 2022, CNBC reported. The smartphone maker has also partnered with state-owned automakers like BAIC and Changan to make EVs.
• Domestic EV makers Nio and Li Auto released their new crossovers, the ES7 and the L9, last month, respectively, and scheduled delivery to begin in August. Another rival Xpeng Motors is set to launch its second SUV model G9 in the same month and will begin delivery in September, with pricing expected to start at more than RMB 300,000.

Chinese auto chip startup Horizon Robotics on Monday announced that it has secured a new round of funding from state-owned automaker FAW Group, the latest example of local automakers upping their investment in the domestic semiconductor sector to cope with a prolonged global chip shortage.

Why it matters: The investment reflects Chinese automakers’ growing anxiety about the ongoing semiconductor constraints that have crippled them for more than a year and show no signs of abating amid recent Covid-19 outbreaks in the country.

New money influx: Horizon Robotics plans to use the proceeds to speed up the development of new auto chips for artificial intelligence computing and its software development, the company said in an announcement (in Chinese) on Monday. The funding amount remains undisclosed.

• Founded by Yu Kai, a former head of Baidu’s artificial intelligence unit, the seven-year-old startup said that the company’s Journey chips, which could enable rapid processing with vehicles’ advanced driver assistance systems, have shipped more than 1 million units as of last year.
• The company added that it has formed partnerships with more than 20 car manufacturers, including SAIC and Changan, making it the country’s largest producer of automotive-grade AI chips. Its existing investors include SAIC, BYD, and GAC Capital, the venture capital unit of the namesake automaker.

Persistent chip shortages: Last year, China only made 5% of the auto chips it consumed, according to figures published by US research company IC Insights and obtained by Caixin (in Chinese). Chinese automakers’ production has been hit by the low self-sufficiency in auto chips and an ongoing chip shortage, creating more demand for building more domestic auto chip firms to fill in the growing demand. 

• GAC is among a string of automakers being hit by ongoing supply chain issues, with production cut by 160,000 vehicles, equivalent to RMB 20 billion ($2.98 billion), in the first half of this year, chairman Zeng Qinghong said on June 25 at a semiconductor conference in Guangzhou.
• GAC, Toyota’s manufacturing partner in China, expects chip shortages will continue into 2024 and is thus looking for home-produced substitutes to ensure supply. The Guangzhou-based automaker has also invested in local chip foundry CanSemi to develop microchips for future vehicle models on 12-inch wafers.
• GAC is not alone. At the same conference, Bosch China’s president Chen Yudong called for more investment to increase domestic production of semiconductors in the country, estimating that production in China has fallen by 1 million vehicles during the first six months of 2022 because of supply issues.
• Struggling to recover from a lengthy Covid lockdown affecting several of its China plants, Bosch currently meets around one-third of the total demand for its car parts in the country but expects an improvement from July when it thinks supply could meet 60% at most of the market demand.

Context: China has for years been building an independent domestic chip supply chain, reporting a 33.3% year-on-year increase in domestic output of integrated circuits (ICs) last year, according to data released by China’s National Bureau of Statistics.

• The central government recently promised to take more measures to help domestic makers expand capacity and boost innovation, China Securities Journal reported Tuesday, citing Guo Shougang, a deputy director at the Ministry of Industry and Information Technology.

On Tuesday, Li Auto announced the L9, a full-size, three-row sports utility vehicle, as part of its stated ambitious plan to achieve 1.6 million vehicle sales by 2025. The car’s starting price is less than half that of similar offerings from the likes of BMW and Mercedes-Benz.

Why it matters: With delivery planned to begin in August, the six-passenger L9 SUV will be the second production model from Li Auto and the Chinese EV maker appears to be confident that it might become a hit.

• Speaking to reporters on Wednesday, chief executive Li Xiang declined to reveal specifics about order volume, but said that the L9 will outsell its existing Li One, which was the top-selling large new energy SUV in China last year, according to official figures.

Details: The L9, a plug-in hybrid, is described by the company as the pinnacle of large luxury SUVs, with what it says is a spacious interior specifically for Chinese three-generation family households. The automaker said the model offers passengers more room than other luxury automaker offerings.

• The plug-in hybrid has a driving range of 215 kilometers (134 miles) on a full charge but can drive for about 1,315 miles with a full fuel tank and a full charge, a 20% increase compared with the company’s first model. It accelerates to 100 km in 5.3 seconds, according to Li Auto. 
• The model comes with many high-end tech features. It has five screens, including two 15.7-inch touch-sensitive ones in the middle of the dashboard that control the in-car entertainment system, two smaller ones around the steering wheel,  and an OLED television screen for rear-seat passengers.
• The vehicle uses a combination of 24 sensors to detect and predict road conditions, including eight 8-megapixel cameras, a long-range lidar unit, and two Nvidia Orin AI chips to enable autonomous driving.
• The L9 will only enable assisted driving on highways, once delivered; the company has not revealed when its car system will support autonomous driving in city traffic. Its rival Xpeng Motors plans to send an over-the-air update that would allow its vehicles to drive autonomously on urban roads later this year.
• The vehicle will sell for RMB 459,800 ($68,418), a price that the seven-year-old automaker claims is lower than any other similar SUV on the market. For comparison, the BMW X7 and the Mercedes-Benz GLS crossovers start at RMB 1 million and RMB 1.07 million in China, respectively.

Context: Meituan-backed Li Auto has been at the forefront of the Chinese EV field with just one model on sale, recording deliveries of 90,491 Li One vehicles in 2021, a 177.4% increase from a year earlier. The sales number is close to the sales of all three of rival Nio’s models over the same period combined.

• CEO Li Xiang has set an ambitious target of delivering 1.6 million vehicles annually by 2025, according to an internal memo obtained by Chinese media outlet Caixin in February 2021.
• Li said earlier this month that monthly delivery of the latest model could reach more than 10,000 units starting from September, although investors now reportedly expect that number to be around 5,000-6,000 units due to supply chain constraints and Covid-19 control measures.
• Earlier this month, Nio also launched a new SUV model, the ES7, with a starting price of RMB 468,000. Alibaba-backed Xpeng said in April that it will launch its second SUV model, the G9, this month.

READ MORE: Drive I/O | Nio, Xpeng, and Li Auto face more challenges after a mixed 2021

Apple has launched a hiring program to bring on software engineers in China, helping more automakers use CarPlay software. 

Why it matters: The tech giant sees potential in the country’s burgeoning transition to intelligent and electric vehicles (EVs). The move could improve Apple’s ability to target local business customers, provide software solutions tailored to Chinese consumer tastes, and add a major player to the Chinese connected car market.

Details: Apple is looking for an unspecified number of “Car Experience Partner Engineers” who can help advance Apple’s CarPlay software and services for auto partners as they look to integrate the mobile technology into their cars more easily, according to a job post on the company’s website.

• The company is looking for candidates with technical project experience in automotive systems development who can facilitate communication between Apple and the global automotive industry, the post added.
• The job will also involve technical support and guidance to developers in creating apps and services, particularly for Apple’s auto-related projects in China.
• The post did not reveal how many engineers Apple planned to hire but said that the roles will be located in its Beijing, Shanghai, and Shenzhen offices.

Context: News of the hiring comes as Apple unveiled a forthcoming version of its CarPlay software on June 6, which the US tech giant said can be deeply integrated into car dashboards and provide a familiar but auto-specific interface for drivers, according to Reuters.

• Apple said that the current version of CarPlay is available in more than 98% of new cars in the US and it’s also talking to a list of big auto names including Audi, Ford, and Mercedes-Benz about adopting the upcoming version. Apple and automakers will reveal in late 2023 which new car models will come with built-in CarPlay software. 
• Chinese automakers Great Wall Motor and Chery are also said to be participating in the project, local media outlet Jiemian reported on June 20, without revealing further details.
• State-owned automakers BAIC and Changan have partnered with Huawei for in-car software, while BYD and Dongfeng work with Baidu to offer automated driving functions.

Geely is reportedly in advanced talks to acquire Meizu Technology, a domestic smartphone maker backed by e-commerce giant Alibaba, as the Chinese auto group aims to provide a mobile-driven in-car experience and pose a challenge in the smart mobility race.

Why it matters: The move comes against the backdrop of China’s big tech firms, like smartphone maker Xiaomi and search engine Baidu, pushing to develop vehicles with smart cabin systems and autonomous driving technologies, developments that pose major threats to traditional automakers like Geely.

Details: Hubei Xingji Shidai Technology Co Ltd, a smartphone venture launched and majority owned by Geely chairman Eric Li, has begun talks to buy Meizu, a small and relatively obscure smartphone player, Chinese media outlet 36Kr reported Friday, citing people with knowledge of the matter.

• Geely is currently carrying out due diligence on the niche handset maker, the sources added, while other details surrounding the acquisition such as the sale price are unknown.
• A Geely spokesperson declined to comment on the report, saying only that the company is working to “expand the industrial footing” of its newly-established cellphone business. Meizu did not respond to TechNode’s request for comment on Monday.

Context: Geely announced its entry into the competitive Chinese smartphone market by establishing Xingji Shidai with registered capital of RMB 715 million ($113 million) in the central city of Wuhan in September, Reuters reported. Geely chairman Eric Li owns a 55% stake in the venture, according to Chinese business research platform Tianyancha (in Chinese).

• The private automaker has hired Wang Yong, a former vice president at telecommunications giant ZTE, to help lead its smartphone business, while stepping up efforts to poach talent from electronics giants such as Xiaomi and Oppo, the 36Kr report added.
• In early 2015, Alibaba invested $590 million for an undisclosed minority stake in Guangdong-based Meizu, with the e-commerce behemoth at the time reportedly intending to integrate its custom mobile operating system YunOS into mobile devices. The company was handed an antitrust fine of RMB 500,000 ($79,000) by local regulators in November last year, because of the deal.

Baidu announced on Tuesday that its highway driver-assistance system will be available to customers for the first time via electric vehicle maker WM Motor. The search engine giant is rushing to lead the race in popularizing partially automated features on consumer cars in China.

Why it matters: Advanced driver assistance systems (ADAS) technology is increasingly considered a major stepping stone to fully autonomous vehicles. Major Chinese auto and tech companies are looking to seize the growing market potential.

Details: The new WM Motor W6 sports utility model will have 29 autonomous driving sensors and Baidu’s Apollo Navigation Pilot (ANP) software. The vehicle will have semi-autonomous driving capabilities, such as automated lane changes on highways, according to an announcement sent to TechNode on Tuesday.

• Backed by Baidu since 2017, WM Motor announced it began delivering an earlier version of the W6 fitted with Baidu’s robotic valet parking feature at this year’s Auto Shanghai show.
• Baidu has also been working with automakers, including Geely and GAC, aiming to supply its Apollo autonomous driving system to 1 million vehicles within five years, Reuters reported in April, citing Li Zhenyu, a senior vice president at Baidu.
• No official release date for the updated WM Motor W6 was announced.

Context: Market research firm BlueWeave Consulting estimated that the global ADAS industry recorded $25 billion in revenue in 2020, and that number is expected to nearly triple by 2027, according to a Financial Times report.

• In April, Huawei and its manufacturing partner BAIC co-launched the first consumer EV equipped with Huawei’s autonomous driving technology and are on track to begin delivery in the fourth quarter of this year.
• Shanghai-based WM Motor delivered 13,378 vehicles in the third quarter of this year, representing a 137.5% increase from the same period last year, according to a statement (in Chinese).

Smartphone giant Xiaomi on Wednesday announced that it is acquiring Deepmotion, a Beijing-based startup that develops digital mapping technology for autonomous vehicles. 

Why it matters: The acquisition is Xiaomi’s latest move in its bid to build its own intelligent connected cars. An expansion into China’s auto sector could greatly expand Xiaomi’s mobile ecosystem and create new revenue streams for the company.

Details: Xiaomi has reached an agreement to acquire Deepmotion Tech Ltd in a cash-and-stock deal valued at $77.37 million, according to the smartphone maker’s quarterly results, released Wednesday. The company did not reveal when it expects the deal to close.

• In an earnings call on Wednesday, Xiaomi’s president Wang Xiang said the purchase is aimed at accelerating the consumer electronics giant’s plan to develop autonomous driving technologies, which Wang called the most crucial part of intelligent and electric vehicles.
• Wang added that the company has been aggressively recruiting automotive engineers, and has established its self-driving team with a batch of 500 experts after kicking off its electric vehicle project in March.

Context: Xiaomi has struck several deals to invest in autonomous driving startups in recent months, as the Chinese tech giant ramps up its efforts to develop driverless car technology and mass produce  its first EV in the next three years.

• The company earlier this month raised its stakes in Geometrical Pal, a startup that develops software solutions that allow radar sensors in AVs to sense the environment. Xiaomi also invested in self-driving software developer Zongmu Technology in June, Bloomberg reported.
• Deepmotion was formed in mid-2017 by four computer scientists from Microsoft Research Asia, the research arm of the US tech company in the Asia Pacific region. In March 2018, the startup raised “dozens of millions of US dollars” from venture capital firms Redpoint China Ventures and Source Code Capital.

Tesla said on Saturday it will recall more than 285,000 vehicles in China to address safety concerns in its autopilot system, marking the automaker’s largest recall in the country. Tesla told local news the decision is not linked to previous safety incidents.

Why it matters: The recall raises questions over the carmaker’s future in China. The company’s prestigious image has soured quickly as Chinese Tesla owners this year began blaming the company for car malfunctions, including sudden accelerations and brake failures. 

• The recall affects over 90% of Tesla vehicles made and sold in China, according to figures released by the China Passenger Car Association. 

READ MORE: Safety questions and shady sales tactics are chilling the China-Tesla love affair

Details: Tesla will recall 285,520 cars, including Model 3 and Model Y vehicles built between 2019 and 2021. Affected customers can receive fixes remotely through system upgrades, without bringing the cars back to the dealers. 

• China’s market watchdog, the State Administration for Market Regulation, said it found safety risks in Tesla’s autopilot cruise-control systems. Drivers can easily activate the system by accident, causing the vehicle to accelerate suddenly, the regulator said in a statement (in Chinese). In some extreme cases, this problem can lead to collisions, the regulator said.
• The watchdog said the recall is Tesla’s response to a safety investigation initiated by the regulator. 
• However, Tesla said in its statement (in Chinese) that the recall is a result of the company “acting responsibly to the customers” and that it reported the recall voluntarily to the regulator (our translation). 
• A Tesla spokesperson insisted that the recall was proactive and unrelated to previous accidents in an interview with the National Business Daily (in Chinese). 
• The affected models include more than 211,000 Model 3 vehicles made in China between December 2019 and June 2021, nearly 36,000 imported Model 3s manufactured during 2019, and 38,600 Model Ys made in China since the start of this year. 
• Tesla did not respond to TechNode’s emailed request for comment.

Context: Since early last year, Tesla has faced mounting pressure in China over safety concerns and customer service complaints. The company also faces national security concerns in China. 

• After a car owner launched a high-profile protest at a car show in April, the US carmaker issued an unusual public apology, pledging to respect Chinese customers and China’s laws, and cooperate with the government on its investigations. 
• In late May, the company also established a data center in China, after the Chinese military reportedly banned staff from using Tesla vehicles due to concerns over the cars’ ability to collect confidential data. The center will store and process information generated by locally-made Teslas.
• Chinese government agencies have begun requesting staff to refrain from purchasing Teslas, due to data security concerns, a person with direct knowledge of the matter who asked not to be named told TechNode in early June. 
• In February, Tesla announced a recall in China affecting 36,126 imported Model S and Model X vehicles over touchscreen failures. Three months later, the company issued another recall involving 5,974 imported Model 3 due to safety risks posed by defective bolts, CNBC reported.

Huawei’s auto push won’t include making its own cars, the company said Monday. The statement comes on the heels of a series of high profile moves into auto technology by the telecoms giant, and reports that it plans to manufacture its own vehicles. 

Why it matters: Huawei’s statement comes amid unease from existing carmakers that Huawei will enter the industry by manufacturing its own cars.

Details: Huawei has not invested in any automakers and is not interested in acquiring majority stakes in car companies in the future, the company said in a statement on Monday.

• The Chinese smartphone maker reaffirmed that it will stick with a “long-term strategy” of manufacturing key components for intelligent and connected vehicles.
• “Persistent rumors that Huawei is investing in its own car production capabilities, or that we own shares in car manufacturers, are unfounded and do not stand up to scrutiny,” Huawei said.
• Shares of BAIC Blue Valley and Changan Automobile, two of the company’s major auto partners, plunged 10% on Monday following Huawei’s announcement. Both companies’ shares slumped a further 4.8% and 4.4%, respectively, on Tuesday.

Context: China’s tech and auto industries have long swirled with rumors of Huawei buying stakes in domestic car companies.

• The smartphone maker seeks to tap into the autonomous and electric vehicle market as its core businesses faces pressure amid US sanctions.
• According to a Reuters report in April, Huawei was looking to acquire a controlling stake in the EV unit of lesser-known domestic carmaker Chongqing Sokon, in a move that would enable the tech giant to make Huawei-branded cars. Sokon’s latest model, the Seres SF5, has been on sale in Huawei stores since last month.

Huawei has appointed the head of its smartphone business to take charge of its young vehicle technology unit, part of a wider management reshuffle as the telecommunications giant tries to break into the fast-growing autonomous and electric vehicle sector.

Why it matters: The appointment is expected to initiate a round of restructuring which will place Huawei’s nascent intelligent automotive solution (IAS) business unit and the team that develops and sell in-car services for automakers under its core consumer business group.  

• The IAS unit was set up in May 2019 to develop self-driving system as well as key components for autos and was previously under the Information and Communications Technology Infrastructure managing board.
• Huawei’s consumer business group, is seeking adoption for an Android alternative called HarmonyOS targeting various connected devices including autos other than smartphones.

Details: Richard Yu, chief executive of Huawei’s consumer business group, was appointed concurrently CEO of the auto solutions unit. Current head Wang Jun will remain as the president of the unit, a source with direct knowledge of the matter told TechNode on Wednesday. Chinese media first reported the shift, citing an internal memo dated Tuesday.

• Yu was also relieved from his role as CEO of Huawei’s cloud and artificial intelligence business unit, an appointment made three months ago and reported by the South China Morning Post. Zhang Ping’an, current president of Huawei’s cloud unit will be promoted as the CEO of the unit and led by Eric Xu, Huawei’s rotating chairman.
• A month after putting EVs on sale in dozens of its flagship stores, Huawei is ramping up a push into electric and connected vehicles. Yu recently set an ambitious annual target of selling 300,000 EVs next year, Chinese media reported Wednesday citing sources.
• The company has secured around 6,500 orders for the Seres SF5, a plug-in hybrid launched by its partner Sokon last month, according to the report. It has planned to sell EVs in at least 200 shops by the end of July and increase that number to more than 1,000 by year-end.

Context: Huawei has been seeking new growth drivers as its smartphone sales plunged globally last year. The smartphone business is running out of key components from US suppliers while being cut off from Google’s Android by the US sanctions.

• The telecoms company last month co-launched Alpha S, a premium electric sedan targeting Tesla’s Model 3, with state-owned automaker BAIC and pledged to start delivering self-driving capabilities for highways and urban streets at the end of this year.
• Ford manufacturing partner Changan is also reportedly (in Chinese) on track to unveil a new premium EV brand, co-developed with Huawei and Chinese top battery supplier CATL, later this month. Huawei last month announced to spend $1 billion in research and development for autos this year.

Geely announced Thursday that it will sell electric vehicles from its new premium brand Zeekr directly to customers, a business endeavor for which it plans to open retail shops and build an online community.

Why it matters: The move is part of a broader plan by China’s largest private automaker to become a frontrunner in the electric and software-based vehicle race.

• Zeekr can sell directly because it operates as a standalone company within the Volvo parent company’s empire. “The goal for Zeekr is to become a technology company,” (our translation), said Geely president An Conghui during a press event at its Ningbo facility on Thursday.
• Direct sales, compared to the traditional model of selling cars through franchised dealerships, is seen as key to Tesla’s success in the global auto industry and has been adopted by a number of Chinese EV upstarts such as Nio.

Details: Zeekr on Thursday laid out plans to join the country’s most competitive mass-premium EV segment by opening two clubhouse-style flagship stores called “Zeekr Centers” and 60 smaller “Zeekr Spaces” in local shopping malls this year.

• The company expects to rapidly expand its sales footprint to a total of 225 branded shops in three years. It is on track to deliver its first model, the Zeekr 001, in October, according to An, who is also the CEO of the new EV unit.
• Equipped with Mobileye’s SuperVision, a hands-free advanced driver-assistance system, the company began taking orders for the four-door coupe on Wednesday at a starting price of RMB 281,000 (around $43,077) after subsidies.
• The Zeekr 001 is priced around 20% lower than Tesla’s locally made Model Y and Nio’s popular crossover, the ES6. It is roughly 20% more expensive than BYD’s premium model, the Han, and Xpeng’s P7 sedan. These models are considered the primary contenders expected to grab share from gasoline cars.  
• Meanwhile, the company will launch a smartphone app in June capable of transacting online sales, and to help with forming a virtual community, An said.
• The management of multiple teams and the expenditure involved in operating a direct sales model is a big challenge for traditional automakers to take on, and is not currently feasible for all of its business units, An explained during the event.

“It’s an emotional play at the high end where consumers buy EVs because they’re high-tech gadgets with premium experience. That’s been a successful play in China and will continue to thrive without government subsidies.”

—Stephen Dyer, managing director of global consultancy AlixPartners, told TechNode during the panel, “EV: What’s next as the industry recovers” at TechNode’s Emerge event in November.

Context: Volkswagen is one of the traditional auto majors which adopted a direct-sales model, opening its first branded shop in December in the eastern Chinese city of Hangzhou. It plans to build 40 stores across China over the next year or so, according to a Reuters report.

• Geely in March announced a RMB 2 billion investment initiative to set up Zeekr Technology and establish a presence in the fast-growing luxury EV segment.

Correction: An earlier version of this story incorrectly identified the EV company as Zeeker, not Zeekr.

Update: added the names of the November TechNode event and panel discussion that Stephen Dyer took part in.

Chinese tech giant Xiaomi is throwing its hat into the red-hot electric vehicle market with a RMB 10 billion ($1.52 billion) investment to set up a fully owned subsidiary for its auto business, to be led by chief executive Lei Jun.

Founder and CEO Lei at a press event in Beijing on Tuesday said Xiaomi had decided to strike out on its own on EVs in an effort to operate an ecosystem that will provide seamless user experience, and will not consider outside funding. Lei said he was aware of the complexities of making cars with extreme capital intensity, saying that the company is now ready to pour money into the project and face losses over a long-term period.

“We look forward to the day when Xiaomi cars will run on roads across the globe… This would be the last startup project in my career and I shall stake all I have to work this out,” the 52-year-old serial entrepreneur said (our translation). In an announcement published Tuesday, Xiaomi said the company plans to invest a total of $10 billion in the project over the next 10 years.

Following in Apple’s footsteps, Xiaomi has pledged to develop high-quality EVs with a “best-in-class” connected device ecosystem for global customers, according to Lei. The world’s fourth-biggest smartphone maker recorded shipments of nearly 150 million units in 2020 with an annual growth rate of 19%. Sales for competitors Samsung and Huawei shrank a respective 14% and 22%, according to figures from Canalys.

Xiaomi also boasted of having one of the world’s biggest Internet-of-Things (IoT) platforms, connecting 325 million smart home appliances as of last year, excluding handsets and laptops. It has also remained the top-selling television set maker in China since 2019, accounting for around 20% of market share, according to data compiled by Beijing-based consultancy All View Cloud (AVC).

However, the Chinese consumer electronics giant is seeking new sources of growth amid a slowing market. Its IoT and consumer products segment slowed sharply to 8.6% annually last year from 41.7% in 2019. The company also missed analyst revenue estimates for the fourth quarter, according to Bloomberg.

In the meantime, the global automotive industry is undergoing a landmark transition, and the shift to battery-electric, self-driving cars from traditional, internal-combustion vehicles has reached a major inflection point. China is expected to maintain its global leadership in EV production and adoption. IHS Markit forecasted that China will regain growth momentum at double-digit rates in 2021 and beyond, as the government continues to push the EV industry forward and consumer demand recovers.

Xiaomi has long been rumored to be plotting a move into the booming, crowded EV market. Last week it denied a Reuters report that it was in discussions with Chinese automaker Great Wall Motors for contract manufacturing. Shunwei Capital, a venture capital firm formed by Lei, invested in Nio in its Series A back in 2015 and became an early investor in Xpeng Motors two years later.

Baidu is also accelerating the push into the market. In January it set up a joint venture with automaker Geely. The Chinese search company has set a goal to launch its first own-brand EV within three years, chief executive Robin Li said during an earnings call last month.

China’s car industry has been among the hardest hit by a global semiconductor shortage, bringing a strong post-Covid recovery to a screeching halt. The shortage has seen Chinese automakers scale back production and adjust their sales targets, as the months-long auto chips drought shows little sign of abating.  

It couldn’t have come at a worse time. The world’s biggest car market had taken the lead in the global recovery, posting a mild single-digit decline in sales last year after business disruptions due to Covid-19. China’s auto sales rebounded 364% year-on-year to nearly 4 million vehicles during the first two months of this year, rising from a low base.

The boom didn’t last long. Vehicle production fell by 37% in February, the third decline in the same number of months, and far larger than January’s 16% drop. Global consultancy AlixPartners estimates up to 1.5 million fewer vehicles will be sold in China this year due to the supply crunch, accounting for 6% of last year’s total auto sales.

Automakers are now being forced to go head-to-head with smartphone companies in the search for chips, bringing more uncertainty to a market that has struggled with a slowdown in demand for years.

Bottom line: A worldwide semiconductor shortage has highlighted the fragility of China’s auto supply chain, as well as its heavy reliance on foreign-made critical technologies. 

• This, along with geopolitical tensions between China and the US, has prompted Beijing to ramp up development of an independent chipmaking industry. 
• Manufacturing of chips that are reliable for autos has long been a challenge for Chinese chipmakers. Analysts expect China to gain independence in less advanced processors over the next few years, while still facing pressure to access cutting-edge auto chips from global suppliers.

Nipped in the bud: Last April, China’s automotive industry recorded sales growth for the first time in two years. This was followed by months of double-digit rebounds. 

• In January, some of the country’s largest automakers, including SAIC, GAC, and Chang’an, halted production at their joint plants with partners including Volkswagen and Toyota. They then slashed output of some models for the first quarter of 2021, blaming the shortage. 
• EV maker Nio warns that its monthly capacity could shrink by a quarter until June. The company expects the shortage to ease in the second half of the year. 
• Although the global supply crunch has affected car sales around the world, analysts expect China to be hit the worst. During the first quarter, the country’s auto sales may have fallen by 250,000 vehicles, or 7%, year on year, market research firm IHS Markit reported. Official sales figures for the first three months of the year have not been published.

What is there a shortage of? Microcontroller units (MCUs), are in particularly short supply. These cheap but essential single-chip computers are used in a variety of car parts including powertrains, chassis, and self-driving systems. 

• On average, a single vehicle uses at least 20 MCUs, IHS Markit said in a February report. 
• Each MCU costs $1 or less, according to analysts, making it hard to compete for manufacturing space. Chipmakers prefer to focus on more advanced, higher-margin products such as powerful graphics processors (GPUs) and artificial intelligence (AI) chips.

Why is there a shortage? Analysts blame chip supply constraints on disruptions from the Covid-19 pandemic. Automakers pulled back production and cut their component orders amid falling vehicle demand. Meanwhile, a spike in demand for laptop computers and gaming consoles during lockdowns resulted in chip suppliers redeploying much of their capacity to consumer electronics. Auto chips became a low priority.

The chips used in cars are mostly built on 200-millimeter (8-inch) silicon wafers with old fabrication techniques. But chipmakers prefer to expand their capacity to produce more advanced semiconductors using newer technologies, UBS analyst Paul Gong told TechNode earlier this month.

When will it get better? 

• Most industry experts believe the shortage will ease in a matter of months, since most semiconductor foundries are running at full capacity and have pledged to invest in output growth.
• “We believe that most of the pent-up demand would be fulfilled in late 2021 or in 2022, assuming the chip shortage is resolved at least by late 2021,” Stephen Dyer, managing director of AlixPartners told TechNode.
• Others have more pessimistic views, forecasting that the Chinese auto industry’s shortage could extend well into 2022, and even persist for up to a decade due to a lack of core skills in China, as well as bilateral trade tensions. 

Can Beijing help? During the annual meeting of China’s legislature earlier this month, Chinese auto giants called on the government to invest more in chip development.

• Chen Hong, president of SAIC, China’s biggest automaker, called for a funding plan for chip development that lowers prices and increases market access of homegrown auto chips. The first step in Chen’s plan would push domestically-made lower-end auto chips, which Chen said could accelerate the build-up of “a reliable, controllable semiconductor supply chain for automobiles” (our translation).
• Yin Tongyue, chairman of Jaguar Land Rover’s manufacturing partner Chery said that a blueprint for developing homegrown car chips should include specific targets for domestic production. A full range of regulatory rules and technical standards for auto chipmaking are also needed, Yin added.
• Wang Fengying, president of Great Wall Motor wrote that Chinese companies should also step up overseas investments to build multinational entities that can secure key parts, including raw materials for batteries and in-car chips from a global supply chain. To achieve that goal, Wang called for more regulatory support and legal guidance for parts makers to expand their overseas presence.

Slow progress: The expanding list of US sanctions on Chinese companies has created a sense of urgency among lawmakers, officials, and businesses. Earlier this month, Beijing pledged to double down on efforts to develop an independent chip industry with incentive policies such as tax cuts, but remained silent on production targets, reported CNBC. 

• China is falling far short of its target to produce 70% of the semiconductors it uses at home by 2025. Less than 6% of integrated circuits were produced by mainland-headquartered companies last year, market research firm IC Insights said in a recent report.
• The situation is even worse in the auto sector. Seven overseas chip powerhouses, including Japan’s Renesas and Germany’s Infineon, make up 98% of the global market.
• Contract manufacturing is concentrated around Taiwan Semiconductor Manufacturing Company (TSMC), which produces around 70% of all shipments today, according to IHS Markit.
• Auto chips make up just 10% of business at the mainland’s leading contract manufacturer, SMIC.
• BYD, the country’s largest EV maker, is producing semiconductors for autos. In October, the company said it had shipped 5 million units of its first generation MCU in the two years since its launch. All were installed in its own cars, and made up less than 1% of the total market.

Emerging domestic supply: Some domestic chip design startups, which focus on design and buy manufacturing capacity as needed, have taken an interest in higher-performance processors for intelligent and connected vehicles. But few are capable of taking on established US chip powerhouses such as Nvidia and Intel’s Mobileye.

• Horizon Robotics might be an exception. In late 2019, it claimed to be the only Chinese supplier of semiconductors that meets automotive requirements. The company relies on TSMC for manufacturing. Chip design is a simpler and cheaper process than operating a chip foundry. 
• The main issue for fabless companies is being successful outside of China, said Stewart Randall, Head of Electronics and Embedded Software at business development consultancy Intralink Group. Randall said that it would be difficult for Chinese chip suppliers to break into global automakers’ supply chains, so they will have to be supported by the government and sustain heavy losses to gain market share.

READ MORE: SILICON | China’s hurdles in making automotive chips

What’s next? As demand for vehicles grows, experts expect Chinese companies to significantly ramp up production of mature semiconductors, including MCUs. 

• The worsening supply shortages could give Chinese companies access to the domestic auto market, Cui Dongshu, secretary general of the China Passenger Car Association, told journalists earlier this month, adding that several companies are securing chip-making equipment to expand their capacity.
• But getting the basics right won’t free Chinese automakers of dependence on global suppliers.
• “It will take much longer for China to catch up and attain self-sufficiency for cutting edge chip design and manufacturing. This is not an easy prospect and will require time, investment, and concerted effort,” Dyer said.

Li Auto reported losses of RMB 792 million ($121 million) in its first annual result as a public company, significantly reducing losses from a year earlier, but has drawn criticism for underinvesting in future innovation. Its shares declined 9.8% on Thursday.

Benefiting from rising electric-vehicle demand in China, Li Auto earned nearly RMB 9.5 billion in 2020. Its first model, the Li One, was China’s best-selling electric SUV during the year, according to figures from China Passenger Car Association. However, its delivery guidance of 11,500 vehicles in the first quarter of this year was almost 30% lower than the preceding quarter, which it attributed to the Spring Festival holiday and an uptick of Covid-19 cases in parts of the country.

Cost controls gone too far

The company narrowed its loss per share of $0.28, or net loss attributable to shareholders of $121.4 million, a 76% decrease from the previous year. This was partly aided by net income of $16.5 million in the fourth quarter from “short-term investment income” according to CFO Li Tie during the call with analysts. The EV maker also benefited from streamlining its sales operations, spending RMB 1.1 billion on selling, general, and administrative costs for the full year, 40% of what NIO spent on the same expense in the first three quarters of the year.

However, Li Auto’s investment into research and development was substantially less than its peers, raising concern among investors. Company executives had promised investors during an online briefing held a few weeks ago that it will accelerate the launch of new models to ease concern about its transition from EREV to all-electrics, according to a report released by investment bank China International Capital Corporation (CICC) last week.

In a conference call with analysts on Thursday, CEO Li Xiang said it has been on track to expand its range of products as part of a strategic move to prioritize business growth over cost control. The company promised to launch at least one new model every year starting 2022, including its first all-electric model scheduled for 2023.  

Ambitious outlook

The goal is to occupy a larger share of the market from mainstream to premium for an annual sales target of “several hundreds of thousands of vehicles” by the end of 2024, Li said (our translation). It also expects to build out a retail network of at least 1,000 stores by that time. The company had 52 stores in 41 Chinese cities as of December; NIO and Xpeng Motors had promised a respective 200 and 150 shops by year end.

The Beijing-based EV maker currently has only one model for sale and mainly focuses on extended-range electric vehicles (EREVs), a technology which features a small internal combustion engine dedicated to recharging the vehicle battery, designed to resolve range anxiety. However, recent policy changes in China is pressuring the company to accelerate its transition to all-electric.

Policy influence

Following Beijing, the Shanghai municipal government early this month unveiled a new policy for new energy vehicles, which excludes new purchases of plug-in hybrid vehicles, including EREVs, from free vehicle registration starting in 2023. Company president Kevin Shen on Thursday reassured investors, saying he expects EREV sales will continue to be strong until then. The company confirmed that it will release its second EREV model, a full-sized SUV with advanced driver assistance capabilities, in 2022.

Li Auto vehicles combine popular features and an affordable price tag, making it a more attractive choice than most internal combustion and electric vehicles in China over the past year. However, the company lags significantly rivals where self-driving technology is concerned— NIO and Xpeng Motor have emerged as major rivals to Tesla. The Li One crossover does not offer intermediate self-driving capabilities, such as navigation from on-ramp to off-ramp on Chinese highways, similar to Tesla’s Navigate on Autopilot and those NIO and Xpeng have both introduced in their vehicles.

CFO Li said the company will increase its R&D investment to at least $464 million this year and it will exceed $1 billion by end-2024, with half of the budget to be used in vehicle autonomy. CTO Wang Kai said that the size of its self-driving team will double to around 600 engineers by the end of this year as it opens its new R&D center in Shanghai with the end goal of 2,000 total employees.

Bigger rivals, including Tesla and a number of Chinese tech giants, pose a real and urgent threat. Wang said 2021 will be “the year of preparation” for the release of Li Auto’s new vehicle architecture next year, powered by Nvidia’s most advanced auto processor, Orin. “Similar features offered by our rivals, along with some brand new features, will also provided to customers for sure,” Wang said.

Correction: An earlier version of this article incorrectly stated that Li Auto plans to double the size of its R&D team to 600 engineers this year, not that of the self-driving team. 

SAIC Motor, the biggest automaker in China, will use processors for its self-driving cars from a domestic chip startup, throwing its weight behind a young upstart as Beijing accelerates plans to replace foreign-made chips with homegrown.

Why it matters: For one of the world’s biggest automakers to gamble a major strategic push on a young and relatively untested chipmaker signals the importance that Beijing places on rapid acceleration of self-reliance in advanced chips.

• Horizon Robotics lacks a global reputation compared with larger rivals such as Nvidia and Mobileye. In August 2019, it launched the Journey 2, its first auto chip to meet global auto stress-test standards, and began shipments in March.

Details: SAIC, China’s largest automaker and Volkswagen’s manufacturing partner, will use processors and software from Horizon Robotics, a rising Chinese chipmaking startup, for its upcoming car models that include advanced driver-assisted capabilities, according to a joint announcement released Monday (in Chinese).

• The state-owned auto manufacturer will also collaborate with the chipmaker to build and mass produce its next-generation, highly autonomous driving technology that is finally “capable of competing with Tesla’s full self-driving (FSD) capability,” the statement said (our translation).
• The company is valued at around RMB 30 billion ($4.64 million), a 50% increase compared with early 2019, and is eyeing a public listing on China’s Nasdaq-style STAR Market later this year, persons close to the company told TechNode.
• A company spokeswoman declined to comment on the valuation and the public offering when contacted by TechNode on Monday.

Context: SAIC is among a list of state-backed automotive majors now shifting towards Horizon Robotics as a domestic source for semiconductors. The chipmaker is considered to be China’s only alternative to global chip-making giants for auto processors.

• US sanctions of Chinese technology giants including Huawei, as well as a pandemic-fueled global chip shortage, is renewing Beijing’s urgency to cultivate a domestic chip sector by 2025.
• Carmakers are receiving state support. The Shanghai municipal government announced (in Chinese) Saturday that it is partnering with Horizon Robotics to establish its global research and development center in the city in an effort to accelerate the development and adoption of China-made central processing units for intelligent vehicles.
• In an interview with Chinese state broadcaster China Central Television (CCTV) last month, Horizon Robotics vice president Zhang Yufeng said that it is currently the only Chinese chipmaker with computing platforms for mass-produced vehicles.
• The company said recently that it shipped 160,000 of its Journey 2 artificial intelligence chips, which it boasts is more power efficient than Nvidia’s offerings, to Chinese automakers including SAIC, Changan, and Chery as of December, nine months after shipments began. It has outsourced production of its processors to Taiwan Semiconductor Manufacturing Corporation (TSMC) since 2017.
• Journey 5, its next chip model for advanced self-driving functions, is scheduled to launch before June and ship in 2022. Its computing power is expected to reach 96 trillion operations-per-second (TOPs), higher than the 72 TOPS of Tesla’s FSD computer.
• The company has an annual shipment goal of more than 1 million units this year.
• The five-year-old startup announced earlier this month that it had closed its $900 million Series C from investors including China’s State Development & Investment Corporation (SDIC), China’s biggest EV maker BYD, as well as Great Wall Motor.
• Competition with Tesla’s advanced self-driving capabilities is a catalyst for many Chinese AV manufacturers, and SAIC is no exception.

Correction: An earlier version of this story erroneously stated that the Journey 2 was Horizon Robotics’ first auto chip instead of the company’s first auto chip to reach global stress test standards.

Chinese smartphone maker Xiaomi is planning to make electric vehicles, according to a Chinese media report. This move could make it the latest entrant into the country’s exploding electric vehicle market, with founder and CEO Lei Jun reportedly leading the project.

Why it matters: The reported entry of Xiaomi, often dubbed “the Apple of China,” could shake up the entire auto industry. Its success in the consumer electronics market has given it high brand awareness among domestic consumers.

Details: After years of indecision, Xiaomi is about to give its electric car project the go-ahead, Chinese media LatePost reported Friday, citing “people familiar with the matter.” Sources cautioned that the company’s plans are still at an early stage and subject to change.

• LatePost’s sources said that Xiaomi began a project code-named “Micar” in 2018 to explore own-brand cars. The project was launched after founder Lei Jun’s visited Elon Musk in the US back in 2013.
• A Xiaomi spokesperson did not respond to TechNode’s request for comment.

Context: Xiaomi has made investments in home-grown EV brands before, leading the $400 million Series C of Xpeng Motors as a strategic investor in late 2019. Prior to that, Shunwei Capital, a venture capital firm founded by Lei, backed Nio’s Series A in 2015.

• The smartphone maker also boasts an advanced voice recognition technology, reaching partnerships first with state-owned FAW Group in 2018, later with Geely and Mercedes Benz in 2019 for the adoption of its voice-activated virtual assistant. It is still a small player, with iFlytek currently leading with 40% of the in-car voice assistant segment.
• Xiaomi has been looking for approaches to expand its presence in car connectivity, including partnerships with automakers in contract manufacturing, Jin Di, consulting director at market research firm Ipsos, told TechNode on Friday.
• Chinese new energy vehicle market reported strong sales of 1.37 million units in 2020, representing a 11% year-on-year growth despite business disruptions associated with the global pandemic, according to figures from the China Association of Automobile Manufacturers.
• Last month, search engine company Baidu revealed plans to make EVs in partnership with Volvo’s parent Geely.

A joint venture between General Motors, Chinese automaker SAIC, and connected car startup PATEO has filed a formal complaint against Tencent for using illegal, anti-competitive tactics to bully its rivals.

Why it matters: The complaint, currently under review by local authorities, marks the first time Chinese auto players have cited anticompetitive practices in a complaint about domestic tech giants that are fighting for share in the automotive sector.

• This could lead to another investigation into Tencent over antitrust behaviors amid Beijing’s clampdown on monopolistic practices.

Details: Chinese connected car company PATEO on Tuesday said it has filed a complaint against Tencent, alleging the company pressured automakers to stop using its software which connects smartphones to the in-car system. The app enables users to send and receive messages using WeChat.

• SAIC-GM-Wuling, a joint venture between General Motors, China’s biggest automaker SAIC, and others, collectively filed the complaint with PATEO.
• Previously, the in-car service platform had been installed on Baojun RS-3, an entry-level crossover launched in late 2019 by SAIC-GM-Wuling.
• Tencent in August sent letters to automakers including SAIC-GM-Wuling demanding that they end licensing the software for which there was no legal cause, PATEO said in a company statement. It said that Tencent has used its dominance and market monopoly to snuff out competition.
• The Xiaomi-based car connectivity startup also said it has sued Tencent for patent infringement, demanding that the Chinese social media and gaming firm pay RMB 80 million (around $12.4 million) for using patented technology in Tencent’s mapping service.
• Tencent responded on Tuesday in an announcement (in Chinese), saying that the in-car platform gathered private data without authorization from Tencent and users.
• Tencent had filed a suit in September against PATEO alleging unfair competition and trademark infringement in Shenzhen, the company said.
• GM did not respond to TechNode’s request for comment.

Context: PATEO is one of the major players of providing car connectivity software backed by a list of Chinese auto and internet giants. It was also reportedly in talks with Tencent’s rival Bytedance in May about a partnership on in-car software.

• The Shanghai-based startup last year raised a Series B for an undisclosed amount from investors including Nissan’s manufacturing partner Dongfeng Motor and domestic smartphone maker Xiaomi, Chinese media reported.
• Chinese retail giant Suning, as well as Haier Capital, the investment arm of Chinese electronics and home appliances maker Haier Group, were also among its early investors.

Shares of Baidu rose nearly 14% on Tuesday on the news that the Chinese search engine company is planning to build its own electric vehicles.

Why it matters: The search engine leader’s interest in jumping into EV manufacturing is the latest sign that investment in the sector is picking up tempo, as Chinese tech companies are seeking to get in on enthusiasm for EVs amid a sales rebound in their home market.  

• Baidu is not the only tech giant buying in to the sector. Alibaba has partnered with China’s biggest automaker SAIC and a Shanghai government-backed entity in an RMB 7.2 billion ($1.1 billion) project to develop premium EVs, according to an announcement released Nov. 27 (in Chinese).

Details: Baidu has been in discussion with car companies including China’s biggest private automaker Geely, Toyota manufacturing partner GAC, and the state-owned FAW Group for a possible majority-owned venture to build EVs, according to a Reuters report.

• A Baidu spokesperson responded that it has no comment on market rumors. GAC said it recently signed a framework agreement with Baidu, but has no further details regarding the partnership. The two companies last Tuesday announced a collaboration to jointly develop self-driving and connected vehicles.
• A Geely spokesman said it was “not familiar with the matter.” Baidu is also deepening its alliance with Geely, in October leading the RMB 1.3 billion Series A in Ecarx, a Geely-backed in-car software company. Geely’s infotainment system has been enabled with Baidu’s voice recognition technology and embedded with Baidu’s mobile apps since late 2019.
• “It wouldn’t be a wise move if Baidu decides to build its own EVs,” said industry watcher Yu Linglin, a former reporter at Chinese financial media 21st Century Business Herald (our translation). The tech company would have to put large amounts of capital into the business, but is not likely to get signs of commitment such as exclusivity or cownership of each other’s stocks in return, Yu added.

Context: Chinese tech giants have backed leading young EV makers aiming for control over the companies and a foothold in the booming segment, and are doubling down as the country’s EV sales started to recover since March.

• Baidu has been a major backer of Shanghai-based EV startup WM Motor since late 2017, and led its RMB 3 billion Series C two years later. WM Motor in September secured another RMB 10 billion war chest mainly from a group of capital funds backed by the Shanghai local government.
• Alibaba is the biggest external shareholder in EV maker Xpeng, while food delivery platform Meituan and its founder Wang Xing are the largest shareholders in Li Auto after founder Li Xiang.
• Baidu is also accelerating efforts to get its voice-enabled operating system and content offerings into vehicles’ dashboards amid a rising user demand for in-car information and entertainment services. Progress has been slower than expected, as leading carmakers are reluctant to cede over their control to tech giants.

Read more: DRIVE I/O | The battle for leadership in car software

It was 2017, and the future of driving was right around the corner: Fleets of autonomous cars would cruise city streets while self-driving buses swerved around pedestrians. Three years ago, tech companies around the world, including Nvidia and Audi, felt confident enough in AVs to predict this driverless future would be a reality by 2020.

Venture capital funds snapped up self-driving startups, plowing cash into dozens of these companies in China and around the world. Pitchbook figures show the global deal count in the AV sector nearly tripled to 127 in 2017.

The industry had to grow up eventually, and it’s happening now. Small players are leaving the market as it matures around a few success stories; in China, central planners are pushing back targets to match reality. Easier, less flashy applications like delivery-robot autonomous trucks are getting more attention from investors.

Plenty of engineers are still working on the dream of L5 fully automated cars. But for now, we’d better get used to the existing L2 parking-assist features and L3 office park shuttles.

Q1 AV fundraising

Competition in China’s self-driving market is heating up, driven by a few companies that dominate fundraising.

Only ten Chinese AV startups won investment in the first quarter of 2020, yet these ten startups conquered a third of all investments in 2019, according to an analysis of public records and data from TechNode and Beijing-based consultancy EO Intelligence.

Some of the lesser-known companies winning new war chests claim to control 90% market share in their own domains, a possible sign of maturity among these firms.

As investors realize that the commercialization of AV technology is still a long way off, they are betting larger amounts on more mature companies instead of making smaller investments in a wider range of early-stage startups.

In fact, much of this year’s activity was driven by just two companies: self-driving startup Pony.ai and lidar maker Hesai.

In January, Hesai closed its $173 million Series C, led by German Tier-1 supplier Bosch, among others. A month later, Pony.ai announced it had raised $462 million at a valuation of $3 billion, in what was at the time the biggest-ever funding round in China’s self-driving industry.

Most other companies did not disclose the value of their funding rounds, instead saying they raised “dozens of millions of RMB.” The two exceptions include an autonomous mining startup that claimed to have closed a RMB 100 million ($140,000) round and a delivery robot maker that doubled that number.

China is aligned with global industry trends. Around the world, mobility deal volume and total investment fell while a few late-stage AV companies raised larger sums.

Plans scaled back

A 2017 government plan anticipated that more than half of all cars sold in 2020 would be equipped with autonomous driving functions—but the installment rate of major assistive driving functions on cars was less than 20% in 2019.

Although investors and innovators are rushing to get L3 vehicles on the road, those cars aren’t ready for real traffic conditions. So far, deploying full autonomy means lowering the speed (to roughly under 40 km/hr) and restricting them to a very limited area, which usually means a local community, a school campus, or a park.

“We’re following special-case AVs very closely,” Qi Lei, the investment principal at Alliance Venture, Renault-Nissan-Mitsubishi’s global investment organization, told Chinese media. She brought up parks and old people’s homes as being easier sites for robots to navigate safely.

But the problems of getting L3 passenger vehicles on the road were highlighted by Baidu’s 2017 self-driving minibus model, Apolong. With the high price tag of RMB 1.5 million per unit, Apolong’s market performance fell short of expectations last year. Baidu immediately denied the reports with the release of a second-generation model, without revealing sales and cost details. It is unlikely that Apolong is affordable enough to be rolled out widely.

In the latest blueprint released by the National Development and Reform Commission earlier this year, the top economic planner declined to give a specific goal for AV development, instead by saying the country would need to reach “mass production” of intelligent vehicles with conditional automated driving functions by 2025.

Still, another action plan released late last year by China’s industry ministry shed some light on Beijing’s hopes for the AV sector. The report predicted that sales of intelligent and connected cars are expected to constitute 30% of new car sales over the next five years.

“The national guidelines will drive growth in China’s AV industry … facilitating cost reduction and efficiency improvement as the supply chain will move in the same direction,” according to analysts. However, as China currently lacks legislation governing self-driving cars, analysts expect mass adoption of L3 automation of passenger vehicles will probably happen no sooner than 2021.

The government remains confident enough to start writing rules for these future cars. Beijing promises to finish drafting technical standards for commercial vehicles—including those for driver monitoring systems and automated lane changing—by the end of 2020. Research on regulations on driverless passenger transport and unmanned delivery are also among the priorities, indicating that legislation for unmanned vehicles has been put on the table.

Autonomous deliveries

Given the difficulties of building affordable passenger AVs, growing emphasis is now being put on autonomously delivering goods. The COVID-19 pandemic also has driven the need for safe, contactless deliveries.

AV companies are racing to fulfil this niche. Three out of the 10 Chinese AV startups raising funds in Q1 are making robots for grocery delivery, according to TechNode’s analysis of funding data. Meanwhile, six AV companies that secured financing over the past two months claimed that their sensor-based algorithms could facilitate trucking rigs with the capability to drive themselves on Chinese highways.

This trend partially explains why investors have piled into Chinese robot delivery startups during the first three months of this year:

• Uisee, formed by Wu Gansha, a former director at Intel’s laboratory in China, secured an undisclosed amount of fresh funding in February in its Series B from German auto supplier Bosch, among other investors.
• In May, Uisee said its fleet of 75 self-driving cars has driven more than 15,000 km in a pilot project in working with SAIC-GM Wuling, General Motors’ light-vehicle joint venture with Chinese automakers SAIC and Wuling Motors.
• In March, Neolix, a partner of Baidu’s self-driving platform Apollo, announced having closed an RMB 200 million Series A+ led by Chinese electric vehicle maker Li Auto (aka Lixiang) and followed by existing backers including Yunqi Partners.
• In the same month, Beijing-based White Rhino raised an undisclosed amount of funding from Chinese investment firm Estar Capital. The company was formed by a group of former Baidu engineers and transported medical supplies to a makeshift hospital in Wuhan during the outbreak.

Venture funds are also pursuing self-driving trucks for freight deliveries on Chinese highways, as the Chinese government forced the installation of autonomous emergency braking (AEB) systems on commercial vehicles last year.

• In March, Maxieye, a company that claims a market share of nearly 90% in the AEB sector, announced it had closed its Series A from Chinese Tier-1 supplier SORL Auto Parts, without revealing financial details.

• Maxieye said its perception algorithms combining data from a variety of sensors could enable warning and braking based on navigation with merely 1% perception errors from 1 to 50 meters, compared with the 50% error rate achieved by some competitors.
• Soon afterwards, Inceptio revealed a $100 million new war chest from Singapore’s logistics giant GLP, among other investors. The Shanghai-based robotruck startup is pushing forward the mass production of L3 autonomous trucks with partners including Dongfeng Motor, China’s second-biggest automaker, by the end of 2021.

“Innovators and VCs have been through a learning process over the past several years since 2016. We are having a better sense of the fact that there is a very high ceiling to achieve vehicle autonomy—and that the lifecycle either of the technology per se or of the business operation is a lengthy and complex one.”

—Inceptio CEO Julian Ma, speaking to TechNode

Looking ahead, self-driving companies are still among the primary targets for VCs, but the rise of unicorns means more difficulty for early-stage startups to raise capital. “It’s a race with incentive capital over a very long term,” said Ma. As automakers and startups struggle to find nearer-term solutions to monetize their technologies, they’re hoping that regulators will remove the barriers in their path.

Tiktok owner Bytedance is quietly developing an auto infotainment system that will allow users to navigate content on Douyin and news aggregator Jinri Toutiao, becoming the latest tech giant vying to enter the car connectivity market.

Why it matters: Bytedance’s move is expected to further enhance Douyin’s leadership as China’s most popular short video app in the competition for user time spent, but its potential to increase distracted driving risks could compel closer scrutiny.

Details: Bytedance is looking for employees in engineering design and business development to grow its car connectivity system team, Chinese media reported Monday citing people close to the matter.

• A Bytedance spokeswoman told TechNode on Wednesday that it currently has a small team “exploring technical solutions” for its content services available to users in vehicles.
• The number of job offerings for product design and business development will be fewer than 10, the report said citing a person close to the company.
• The Beijing-based company transferred around 20 employees to research and development from the team working on Smartisan, a smartphone project acquired by Bytedance early last year.
• The Chinese internet giant has reportedly been in talks with large local automakers including BMW manufacturing partner Great Wall Motors, Volvo owner Geely, and Dongfeng-backed infotainment solution provider Pateo.
• A latecomer in China’s auto technology boom, Bytedance began investing last year in electric vehicle maker Li Auto, widely known as Lixiang.

Context: Chinese tech companies are pushing aggressively into car connectivity amid a rising demand from users for in-vehicle entertainment and real-time communication, as demands from driving ease with improved driver-assistance capabilities.

• Banma, Alibaba’s car startup in partnership with China’s top automaker SAIC, last week announced that it completed restructuring with the appointment of a new joint chief executive Zhang Chunhui, formerly the head of Cainiao ET lab at Alibaba.
• State-owned BAIC and China’s biggest electric vehicle maker BYD forged an alliance with Huawei. Both automakers said separately earlier this month that they have been in the final debugging stage for launching the telecommunication giant’s car connectivity system HiCar in their latest models.
• Japanese automaker Honda on Monday said it has partnered with Tencent to enable a package of Tencent’s communication and content services, featuring a voice-operated version of WeChat available to drivers and passengers.

China’s biggest internet search company Baidu has won a bid to build public road infrastructure for self-driving cars in southwestern Chongqing municipality, a deal worth $7.5 million.

Why it matters: Baidu is expanding from developing autonomous vehicle technology to offering cloud-based transport infrastructure for car connectivity amid rising 5G adoption in China.

• China in 2011 began researching vehicle-to-everything (V2X) technology that links cars, transport facilities, and other road agents through a carrier network. It ramped up efforts with the launch of what it said was the world’s largest V2X city network in the eastern city of Wuxi in late 2017.
• Baidu open-sourced its V2X solutions a year later. It then set up a standalone V2X department late last year in response to Beijing’s call to close the gap with world leaders in the self-driving race.

Details: Yongchuan district in Chongqing has offered a RMB 52.8 million ($7.5 million) contract to Baidu to develop cloud data centers for self-driving car testing on city roads, the government said in an announcement released Tuesday (in Chinese).

• Baidu will provide a package of solutions including cloud data centers for vehicle-infrastructure communication and car management, enabling Level 4 autonomous vehicles to test on a 20 square kilometer (around 7.7 square mile) area of public roads.
• The contract also covers deployment of edge servers and signal control systems on roads for detecting objects and transmitting data. The deal was part of a larger RMB 1 billion framework deal struck between Baidu and the district government for an AV test infrastructure project last March.
• In an announcement released on Friday, Baidu said a fleet of more than 100 self-driving cars could drive on the roads to validate concepts of operations and technologies after construction.
• In April, the Chinese tech giant became one of the first seven companies to win permits for AV tests by Chongqing’s government, alongside state-owned automakers including Changan and Dongfeng.

Context: Baidu has reached partnerships with more than a dozen Chinese governments over the past few years. Some of the biggest deals were those with Beijing and Changsha, to monetize its futuristic AV technologies.

• The company inked a framework agreement with Yinchuan, the capital of western Ningxia province, in late December to enable self-driving rigs tested with V2X solutions following a similar deal with the government of the northern Cangzhou city two months ago.
• “It is important for us to gain operational experience as well as derive commercial value from areas, such as smart transportation to ensure that we are meeting market needs with our technology,” Baidu CEO Robin Li said during the fourth quarter earnings call.

The small city of Trikala, Greece offers some quintessential provincial scenes: bustling farmers’ markets with vibrant colors and old men with bushy mustaches chatting on park benches.

Delve deeper and you’ll discover public wifi, smart parking facilities, and coming soon, driverless buses. Trikala has become Greece’s first smart city thanks to the roll-out of multiple digital initiatives. With technology delivered straight from China, the city is set to commission (in Greek) the world’s first operational pilot for autonomous buses in real traffic conditions downtown.

Chinese state-owned vehicle manufacturer Weichai will provide the driverless buses which will operate for at least two years. This is the first time that China-made driverless vehicles will hit the roads in Europe.

The buses will automatically avoid obstacles and pedestrians and offer an on-demand service. They will provide customized options for passengers that deviate slightly from original routes to better serve their needs. 5G networks will support operations with lower latency and quicker connection speeds to the control center.

“There was great interest from European manufacturers. Weichai participated through a local subsidiary called Amani Swiss,” Odysseas Raptis, chief executive at e-Trikala, the company responsible for procurement, told TechNode. The most important factor was the technology and know-how of candidates, he said.

The project received funding from the Greek government and the European Union. The two governmental authorities handed out rounds of funding last summer and announced a procurement tender.

A team of five to seven engineers and experts from Weichai will accompany the driverless buses to the city for about nine months. During the first phase, the team will work with local engineers to map out a route. This phase is expected to last two to three months, Raptis said.

The driverless buses will then operate for six months while the Weichai team trains local staff. After that point, passenger operations will start and the program will run for an additional two years.

A team from Greece’s Institute of Communications and Computer Science from the National Technical University Department will also support the experiment, Raptis said.

“Globally, our program is synonymous with pioneering innovation,” said Yannis Kotoulas, president of e-Trikala told TechNode. “We will be able to see how passengers and people living with the experiment react to the buses,” he said, describing the partnership with Weichai as a “huge pleasure.”

Weichai Group is a Chinese state-owned corporation that specializes in the design and manufacture of diesel engines and vehicles. It has clients in 110 countries around the world, according to its website.

“We believe not only in this particular move, but in close collaboration with them [Weichai] to take steps that the global automotive market needs,” Raptis said, referring to the bypassing of obstacles and on-demand service.

Shanghai-based DeepBlue AI was also involved in the design and manufacturing of the vehicles, people familiar with the matter told TechNode.

If it wasn’t for a DeepBlue event in Athens last June, this deal may never have gone through. Trikala Mayor Dimitris Papastergiou told TechNode that it was after this promotional event that he informed DeepBlue of the tender.

Small city, big ambitions

Primarily agricultural with little industry in the heart of Greece’s biggest valley, Trikala had fallen on hard times competing with international product prices and volumes.

Over time, it became, at best, a stop over for tourists on the way to Meteora, a UNESCO world heritage site featuring monasteries built on towering rocks reaching 550meters in height. While tourists from Russia, the Balkans, and beyond continued to flock to the important religious landmark, Trikala’s economy was dwindling.

Technology offered the city not only an opportunity to better the lives of residents but also to nurture tourism and create jobs. Tours to Meteora now stop at Trikala to see the city’s smart infrastructure and try out the free public electric vehicles.

“We need to create our own opportunities and not wait for the state,” the mayor said. He said the municipality had submitted over 1,000 applications to international institutions for technology funds.

Trikala has gained a reputation on the European stage as the country’s first smart city. The Ministry of Economics and Finance named the city Greece’s first digital city in 2004. By 2009, it was listed in the world’s top 21 smart cities worldwide by the Intelligent Community Forum, a global network of smart communities.

The local municipality has integrated several intelligent features into the city’s infrastructure, including sensors on car parking spots, smart waste management and a pilot 5G network, one of three in the country. Chinese technology has been key to at least one of these, the engineers working on the project told TechNode.

The smart waste system was designed by local engineers and manufactured in China. The system monitors key pumps in the city’s waste pipes and alerts the control room if the pumps are under stress or in need of maintenance.

Without the option to manufacture cheap and quality hardware in China, implementing the system would have been far more difficult, the engineers said.

In 2015 and 2016, Trikala ran another driverless bus pilot funded by the European Union. Among the seven cities that participated in the project, Trikala was the only one to launch the project downtown. It served well as a tourist attraction, e-Trikala President Kotoulas said.

Results from the EU study showed that passengers at Trikala were unique in using the driverless bus regularly, as opposed to just out of curiosity. This data concurs with what local authorities told TechNode. The city’s residents are used to high tech applications and are proud to be part of a community that innovates.

The municipality anticipates further collaboration with Weichai in automated and sustainable mobility in the near future.

Top auto-parts supplier Bosch has formed an alliance with Chinese automaker GAC to adapt its automated valet parking (AVP) system for the world’s largest auto market, with plans to introduce the technology as early as 2020.

Why it matters: The joint project is the first of its kind between Bosch and a Chinese OEM. The German Tier-1 supplier, in line with Beijing’s aggressive vehicle-to-everything technology initiative, bet big on driverless technology to shore up its momentum as China’s auto market declines.

• Auto sales in China slid 10.3% year on year to 18.37 million units in the first three quarters of the year. China Association of Automobile Manufacturers (CAAM) in August reduced its sales projection to 26.68 million units in 2019, about 1 million fewer than the previous forecast.

Detail: Bosch on Wednesday announced a partnership with the Chinese automaker GAC Group’s R&D Center to develop a fully automated driverless parking system, without the need for a human driver behind the wheel, as part of a move to woo the country’s early adopters.

• The two companies plan to pilot its driverless parking service early next year in China’s first-tier cities, namely Beijing, Shanghai, Guangzhou, and Shenzhen.
• Parking lots at local shopping malls, office buildings, and sports stadiums will be the key targets. Bosch showcased the technology last year in the parking lot of Daimler’s R&D center in Beijing. It so far has two other pilot sites in Shanghai and the eastern city of Wuxi.
• Production for vehicles with the Level 4 driverless parking function is planned for the end of 2020. L4 is the first level of truly hands-free automation, meaning a car can drive itself under limited conditions, according to the Society of Automation Engineers (SAE).
• The localized solution is expected to be economically feasible for Chinese parking lot operators. Only a small number of cameras and basic network equipment are required with the exception of Lidar, a critical and pricey component that enables autonomous cars to sense objects 360 degrees around.
• The auto industry sees driverless parking as having great commercial prospects in China for its widely anticipated potential to relieve drivers from time wasted searching for parking. However, it has to reach a threshold of installation in at least 100 parking lots across major cities before demand will require mass production, according to industry estimates.

Context: Bosch started developing its AVP with German peer Daimler in 2015, combining Lidar, cameras, and vehicle-to-infrastructure communication facilities to detect objects and calculate distances.

• The two companies in July this year announced the co-developed system was approved for operation at the Mercedes-Benz Museum parking garage in Stuttgart by local authorities, making it the world’s first fully driverless parking system officially approved for everyday use.

Chinese ride-hailing giant Didi Chuxing is opening up its significant stores of transit data with the release of two major datasets in order to improve understanding of transport patterns and optimize infrastructure investments.

Why it matters: The move is likely to win the company goodwill from city officials after attracting heightened scrutiny from authorities, especially over the past year. Machine-learning applications, largely driven by data sharing, play a critical role in resource utilization and planning safer, smarter transport networks.

• Didi in late 2017 first launched its GAIA Initiative, a global research platform under which scientists can apply for access to anonymized data to explore traffic solutions.

Detail: Didi will make available two of its anonymized historical TTI (Travel Time Index) datasets which index urban congestion, gathered from vehicles on its platform, Didi CTO Zhang Bo announced Friday at the China National Computer Congress summit in Suzhou.

• The release contains traffic congestion indices, calculated using passenger trip information, as well as the average speed of motor vehicles on Didi’s platform over the past year in six Chinese major cities: Shenzhen, Chengdu, Xi’an, Jinan, Suzhou, and Haikou.
• The other dataset includes detailed historical trip-level data, namely anonymized start and end points and route information from Didi’s Express and Premier service tiers for a two-month period in Chengdu and Xi’an in late 2018.
• The ride-hailing giant said it has partnered with governments from more than 20 Chinese cities to provide innovative solutions for transport and traffic management, such as smart traffic signaling technologies. The company said adjusting the timing of more than 2,000 traffic lights across the country reduced congestion by 10% to 20% on average.
• Didi was not immediately available for comment when contacted by TechNode on Monday.

Ride-hailers may face app store delisting over illegal drivers in Shanghai

Context: Didi is the not the only company seeking to play an important role in a smart transportation system built around connected autonomous vehicles.

• Uber in early 2017 launched an online website called Movement using data and tools which allowed users to measure travel times between points in cities including Washington D.C., Sydney, and Manila. It was updated two years later with a feature allowing users to track vehicle speeds down to the street level in a total of 38 cities.

Accenture announced Tuesday that it has agreed to acquire Futuremove Automotive, a Chinese vehicle connectivity solution provider, to bolster its service offerings in the world’s largest automobile market.

Why it matters: As in-vehicle technologies and services become more important to consumers, car connectivity is considered the next frontier for competition between carmakers, particularly in China where automotive technology developments are supported by the central government.

• Revenue in the Chinese connected car segment is expected to grow at a rate of 16.5% annually over the next four years, according to data from Statista. It is estimate that more than 73 million connected cars will hit the roads by 2023, nearly four times current figures.
• Beijing has made big bets on V2X (vehicle-to-everything) networking, which facilitates real-time communication among cars and traffic-related elements in an aim to reduce traffic accidents, road congestion, and energy consumption.

Details: Accenture is acquiring Futuremove Automotive to strengthen its digital consulting in smart connected in-vehicle and mobility services to “meet a rising demand from China-based auto clients,” the company said in an announcement.

• Founded in 2015 by John Wang, a former head of Microsoft’s China auto business, Futuremove Automotive develops in-vehicle software and a cloud platform for car connectivity.
• It also provides a software-as-a-service solution for ride-sharing and fleet management. Six out of the top 10 global luxury car brands in China are among its clients, Wang said in an interview earlier this year.
• The Beijing-based startup secured nearly RMB 100 million ($14 million) in a late 2016 Series A led by Chinese venture capital firm Photon Fund. This was followed by two rounds of funding each in the “tens of millions of RMB” led by first by Haier Capital in 2017 and Sino Pacific Capital in 2018.
• Wang will join Accenture as a senior executive for its digital transformation solution business, Industry X.0, after the deal is completed. Further details about the transaction were not revealed.

Context: Chinese tech companies, including Alibaba and Tencent, are scrambling to secure a piece of the fast-growing auto segment.

• Huawei joined the competition with the August launch of its long-awaited Android alternative, the Hongmeng operating system, which the company said would be aimed at internet-of-things applications such as wearables, smart speakers, and in-car services.

Changan Automobile will begin delivering a new version of its best-selling CS75 SUV model equipped with a voice-operated version of WeChat in the third quarter this year, making it the first mass-market passenger vehicle equipped with the ubiquitous Tencent app.

Why it matters: Tencent is accelerating its entry into the connected vehicle sector, readying for what many see as an uphill battle for market share with Baidu and Alibaba.

• Baidu is expected to lead the voice-enabled auto assistant segment with 260,000 units installed next year, according to Chinese market research firm Gasgoo Institute. Tencent is expected to follow with 190,000 units.
• Baidu has installed its DuerOS voice assistant in 300 models covering more than 60 auto brands to date. Tencent said on Monday that it is working with 21 OEMs to deliver connectivity solutions on 45 models.
• Alibaba installed its AliOS solution in 600,000 Roewe RX5s through an exclusive partnership with China’s largest automaker SAIC as of June 2018.

Detail: After delaying its release for nearly a year amid safety concerns, Tencent unveiled on Monday a voice-operated version of its popular instant messaging app WeChat for drivers as part of its collaboration with Chinese automaker Changan at an event in the southwestern Chongqing municipality.

• Developed specifically for use while driving, in-vehicle WeChat allows drivers to check and send messages as well as make calls using voice commands or using buttons on the steering wheel. It also features Tencent Map’s navigation service.
• The social and gaming giant claims the tailor-made version can be entirely controlled by voice and steering wheel controls, minimizing distraction for drivers while on the road.
• Pre-sales of the WeChat-equipped Changan SUV began on Friday at a starting price of RMB 127,900 (around $17,900). Deliveries will begin in the third quarter.
• The collaboration between Tencent and Changan began in April 2018 when the two firms set up connected vehicle joint venture Phoenix Auto Intelligence.
• This is the second such partnership between a Chinese OEM and a tech giant after Alibaba and SAIC formed Banma Network in 2015.
• WeChat for drivers will be one of the core capabilities of Tencent’s Internet of Vehicles solution and will also be open to other automakers, said Tencent Vice President Zhong Xiangping.

Context: Changan is pinning its hopes on the partnership to bolster falling sales of its vehicles in a flagging market.

• The Chongqing-based firm’s CS75 deliveries fell 7.8% year on year to around 76,000 units in the first seven months of this year. It ranked 12th in domestic SUV unit sales behind Great Wall Motor’s Haval H6 and Geely’s Boyue, according to figures from the China Passenger Car Association.
• Changan shares closed 1.2% higher at RMB 8.28 in Shenzhen on Tuesday after rising nearly 3.7% on Monday.

More than 100 million drivers in China are now equipped with electronic toll collection (ETC) devices to pay automatically when driving on the country’s highways. The system will act as a platform for smart road technology in the future as well as autonomous vehicles.

Why it matters: The role of ETC is beginning to shift from a payment method to a way to connect vehicles amid a broader government push toward a national intelligent transport system for connected cars.

• Uses of in-vehicle ETC devices include the collection of data on route choices and emergency brake usage. These can help to predict traffic patterns and possible accidents.
• They are a crucial part of connecting vehicles and road infrastructure in a smart traffic management system, said Luo Ruifa, chairman of the country’s leading ETC device maker Genvict last month.

Details: The number of drivers in China using ETC devices is expected to grow a further 40% to 180 million by the end of this year, China’s Ministry of Transport said on Tuesday.

• Around 2,500 highways nationwide that have been under construction will adopt ETC machines, and nearly one-fifth are now complete, the ministry said.
• Beijing has taken a series of measures to meet the ambitious target of equipping 90% cars with ETC machines this year, including free installations and 5% discounts on tolls.
• Last year, only 30% of the country’s 240 million vehicles adopted ETC, compared with around 90% in western countries.

Context: China is working on deploying 5G-enabled C-V2X networks to link vehicles, road infrastructure, and passengers as the technology of choice for the commercialization of smart connected cars.

• Patrick Little, a senior vice president at Qualcomm, called for common standards and a long-term road map for vehicle connection in western countries in a recent interview.
• The world’s first C-V2X-connected cars are expected to hit the road in China this year, according to the 5G Automotive Association.

Alibaba is reportedly planning to spin off its team responsible for developing its AliOS Auto operating system and integrate it with Banma Network Technologies, a joint venture (JV) between the company and Chinese automaker SAIC, in a move to gain more control over the company.

Why it matters: The relationship between tech companies and automakers has been bumpy as both sides jostle for control in the development of next-generation vehicle technology, a major pillar of the government’s Made in China 2025 initiative to achieve global leadership in core technologies.

• Automakers are unwilling to share data with tech companies over the risk of revealing proprietary intellectual property (IP) and production costs, and the Banma case is no exception, reported Caixin citing an anonymous car company employee.
• Alibaba’s progress in selling its proprietary operating system AliOS to other clients has been hampered by internal resistance from SAIC, the country’s largest automaker, which wants to maintain an edge in competition, according to 36kr citing multiple former executives.

Details: The AliOS Auto team will be integrated into Banma, and Alibaba hopes to then pry more share from SAIC to lead the joint venture, according to 36kr citing a person with knowledge of the matter. The company declined to comment on the restructuring when contacted by TechNode on Wednesday.

• Banma’s in-vehicle information service platform has been on pause pending an update for months according to some users, and top executives including the CEO, CTO, and CFO have left.
• A Banma spokeswoman told TechNode that the company had updated its software more than 10 times for each car model over the past year to fix bugs and enhance user experience, although each update was not labeled with version numbers.

Banma issued a blanket denial to TechNode on Wednesday of all assertions in the 36kr report.

Context: Chinese tech giants are stepping up efforts to make their mark in the booming vehicle operating system industry. Vehicle OS are a key component for smart connected cars as they enable the delivery of innovative information and entertainment services to drivers.

• Alibaba and SAIC partnered in mid-2014 and established Banma in late 2015. Banma released its vehicle connectivity solution the next year and SAIC said last June that it had sold 600,000 vehicles to date that were equipped with the AliOS in-car operating system.
• Both companies initially held 45% share of the JV, and the 10% balance was granted to employees. Both sides reduced shares to 31.5% in July 2018 when Banma secured RMB 1.6 billion in funding from three external investors.
• The two companies are said to have an exclusive partnership: Banma is only allowed to deliver in-vehicle infotainment system based on AliOS, while the Alibaba in-house team can only reach auto clients through Banma.
• Baidu in late 2017 open sourced its vehicle information service technologies, including voice assistant and facial recognition. The launch of its Internet of Vehicles (IoV) solution platform followed a year later, which is now accessible on 300 vehicle models from upwards of 60 OEMs.
• Tencent launched its in-car intelligent system solution Tencent Auto Intelligence (TAI) in November in partnership with a list of automakers including BMW, GAC Group, and Dongfeng Motor, and plans to offer voice-enabled WeChat services by the end of this year.

Autonomous driving startup AutoX and Swedish electric vehicle maker NEVS are working together to deploy robotaxis in Europe by the end of 2020, according to a joint statement.

Why it matters: Chinese self-driving companies are taking an international approach to develop their technologies. In June, AutoX and rival Pony.ai were given the green light to run robotaxi services in California.

• Deploying robotaxis gives autonomous driving companies a wealth of data with which they can better train self-driving cars.
• People drive differently in various parts of the world. Early robotaxi testing allows companies to localize their technology more quickly than their peers.

“AutoX enables companies like NEVS to become autonomous by creating an AI driver which is tailored to the specific geolocation it is in; adopting local driving styles, while also navigating in urban and dynamic conditions.”

— Xiao Jianxiong, CEO of AutoX

Details: NEVS is currently developing the robotaxi vehicle in Trollhättan, Sweden, and is taking design cues from a concept vehicle it teased at CES Asia in 2017.

• The two companies will begin testing the robotaxis in late 2019, with plans to deploy vehicles a year later.
• The aim of the partnership is to deploy autonomous taxis around the globe, according to the statement.
• The companies hope to use robotaxis to reduce the number of vehicles on the road, thereby cutting down on pollution and tackling congestion, they said.

Context: Following the partnership, AutoX will be testing its technology on three continents. In June, the company received permission to test its vehicles in the southern Chinese city of Guangzhou.

• Prior to receiving a license to run robotaxi services in California, AutoX had been testing its autonomous driving technology in the state.
• NEVS has more of a Chinese presence than meets the eye. The company last year finalized plans for an electric vehicle plant in Tianjin, a city in northern China.
• In January, property giant Evergrande acquired a $930 million majority stake in NEVS through its subsidiary Evergrande Health.

Baidu and a coalition from the automotive industry have released a set of guiding principles for autonomous vehicles (AV), promoting a system of “safety by design” as conversations about self-driving cars go mainstream.

The coalition includes Daimler, BMW, Intel, Volkswagen, Fiat Chrysler Automobiles, Audi, and automotive supplier Continental, among others.

“In addition to offering broader access to mobility, [automated driving] can also help to reduce the number of driving-related accidents and crashes. When doing so, the safety of automated driving vehicles is one of the most important factors,” the group said, explaining the motivation behind the principles.

AV proponents have pointed out that the vehicles could end up being safer than human-driven cars. However, the coalition highlights a number of topics that need to be resolved in order to meet this goal.

The nearly 150-page document covers 12 areas including cybersecurity protection, driver-vehicle handovers, data recording, coping with component failures, and awareness of an autonomous system’s limitations. According to the group, balancing safety and availability in Level 3 and Level 4 autonomous vehicles, those that require human interventions in certain scenarios, is difficult to balance.

AV safety will peak when operations are optimized but restricted to certain driving scenarios, the group says. However, if restrictions are too high, safety goals cannot be reached due to limited availability. The same is true when limitations are too liberal.

“Being too risk-averse leads to a system that is overly conservative, and the system availability becomes too low, which in turn will not provide the benefits of a safer and more comfortable customer experience,” the report said.

The principles also highlight the importance of cybersecurity. A slew of possible safety risks arise from malicious actors seeking to take advantage of the connected vehicles, which could possibly allow them to gain access to a car’s controls.

In June, cybersecurity firm Regulus Cyber was able to spoof a Tesla’s GPS system to redirect it off a highway. However, the researchers had to put an antenna on the vehicle in order to launch the attack.

Similarly, in April, Tencent’s Keen Security Lab was able to trick a Tesla into switching lanes. The researches put stickers on the road to fool the vehicle into altering its behavior. Though the attack didn’t require any hacking, it highlights how AVs could be manipulated if safety issues are not thoroughly assessed and resolved.

The principles draw attention to a reliance on data, whether gathered by sensors or provided by maps and GPS, in order for AVs to function properly. “If the integrity or authenticity of this data is compromised, the building blocks of the automated driving functions will use faulty data to maneuver the vehicle, which might result in inaccurate driving or other deviations from correct operation,” it said.

Baidu is ramping up efforts to install its voice assistant DuerOS into cars in China as the government pushes for world leadership in intelligent connected vehicle technology by 2035.

DuerOS and the company’s internet of vehicle (IoV) platform, Apollo, has been installed on more than 300 car models from 60 auto brands to date, and will be installed in 200 more over the next two years, a Baidu executive said on Tuesday at this year’s CES Asia in Shanghai.

Li Zhenyu, vice president of Baidu’s Intelligent Driving Group, said it had partnered with a number of automakers, including Ford, Mercedes, BMW, and China’s Great Wall Motors. Baidu announced in January that DuerOS has reached over 200 million devices, but did not reveal the total number of vehicles with the software. Alibaba stated in August that its AliOS was installed in more than 700,000 vehicles, mostly SAIC-brand vehicles.

Powered by DuerOS, vehicles from Ford, Chery, and Great Wall Motors are now capable of intelligent navigation and entertainment services including content from video-streaming platform iQiyi and Himalaya FM, an audio content app. He Fei, an executive from telecom operator China Unicom, said the two companies will partner to develop favorable payment plans for in-vehicle applications in the future.

Tencent announced in November its launch plan for entirely voice-enabled WeChat services as part of its Tencent Auto Intelligence (TAI) software. However, the company later postponed the release to the end of this year to address public concern over the safety of its touch screen interface, which the company said it was stripping completely out. “It is a difficult task, especially for natural language processing,” (our translation) Tencent’s Pony Ma said publicly late last year, Xinhua.net reported.

As past of its 2035 goal, the Chinese government plans to complete wireless vehicle communication network (LTE-V2X) buildout, product standards, and regulatory guidelines by 2020, according to a strategic plan released by the state planning department, National Development and Reform Commission, in January 2018.

In October, a fight erupted between a passenger and the driver of a Chongqing bus. In the hubbub, the vehicle swerved across the road and through the barrier of a bridge, falling into the Yangtze River. All 15 people on board perished.

The incident sparked widespread indignation across the country as observers largely blamed the passenger for provoking the fight. It also brought to light some 20 other attacks on bus drivers that occurred in China that year, although none with so high a casualty count.

Against the backdrop of the public outcry, officials took action. “[The] government regulations’ requirements are higher now,” Liang Kun, product manager at Xiamen-based surveillance and security firm Reconova, told TechNode. Passenger aggression towards drivers can now be punished by law, and the installation of “active safety” technology is required on commercial vehicles in addition to public transportation. Some of the new measures could prevent tragedies like the one that happened in Chongqing, Liang believes.

Along with the heightening of regulations surrounding road safety, Reconova has seen more demand for its driver surveillance services, which include facial recognition devices that detect distracted driving as well as machine vision technology that surveys and warns of nearby vehicles and pedestrians.

The six-year-old startup, which completed a Series B last May led by Intel Capital, is part of a larger trend towards machine-assisted driving. As applications for fully-autonomous vehicle technology–for consumers, at least–proceed relatively slowly, this particular sector is accelerating, with a growing number of players, including artificial intelligence (AI) giants Sensetime and Baidu, entering the market. As a result, increased surveillance of drivers could significantly reduce the likelihood of accidents; however, it also raises certain security risks as well as potential concerns over privacy.

Eyes on road safety

On a sunny afternoon in Shenzhen, Guangdong province, TechNode joined Liang for a spin in a Reconova test vehicle. Inside five cameras were plastered in a straight line down the van’s windshield, each one able to detect movements by nearby vehicles. Another device above and to the left of the steering wheel was pointed directly at the driver’s face, checking for signs of drowsiness, phone use, or smoking.

At periodic points during the drive, Liang demonstrated how the system reacts to various risky behaviors. Twice, after checking that the road is clear, he closed his eyes for a few nerve-wracking seconds before the system’s speaker barked a reprimand: “Danger, please be careful.”

Holding a phone to the side of one’s face while the van is moving elicits a similar warning, as do too-quick turns and neighboring vehicles that switch lanes without leaving enough space. In the relatively calm mid-afternoon traffic, though, the system is mostly quiet, only occasionally blaring out brief cautions.

According to Liang, camera footage of driver misdemeanors and other safety risks can be automatically uploaded to a company’s platform if the system is online.

“In accordance with Chinese law, the equipment doesn’t collect the personal information of the driver or the person being surveilled,” Liang said in reference to Reconova’s facial recognition technology, which can also verify drivers’ identities.

“We don’t know who is who,” he added. According to him, the system doesn’t cross-check images with ID information, but only checks whether someone’s facial characteristics match companies’ driver records.

This year, a major Chinese logistics company secured Reconova’s services for a part of their delivery fleet. “Our first batch has already been installed and their testing program was excellent,” Liang told TechNode. “If it really is effective,” the client has plans to expand, he said.

The company has also had “successful use cases” in the area of public transportation. Bus company clients, for instance, can install a one-click panic button on their vehicles, allowing drivers to contact police more easily in case of an emergency. Another, optional feature allows buses to be brought to a halt via remote control.

Reconova sales director Morgan Guo told TechNode in an interview that this field has grown rapidly in the last year: from 4,000 orders in 2017, demand soared to 30,000 devices installed the next year. In 2019, Guo predicts, that number could grow another “70-80%.”

Driver backlash

In addition to general public safety, increased scrutiny of truck and bus drivers is also good news for companies like Reconova, transportation firms, and insurers. The reaction of the drivers themselves, however, has been mixed.

“Drivers will use things to block this device, or bend the device around so that it’s not effective,” Liang told TechNode while gesturing to the facial recognition gadget to his left. Because employees feel that “there’s something monitoring their behavior,” Liang says, “there will be aversion.”

Hiko Lee, enterprise solution manager of GreenSafety, a startup that supplies similar driver surveillance systems to business clients in Hong Kong, Macau, and Taiwan, has heard of similar resistance from drivers.

For clients such as electricity supplier China Light and Power Company (CLP), GreenSafety assigned drivers in 50 vehicles grades based on their behavior.

“When the score is high, around 100 marks, then the performance is good” while 50-60 might be the mark of a “bad driver,” Lee told TechNode. Thanks to improvement in driver ratings over time, GreenSafety won the chance to trial their devices for two major bus companies in Hong Kong. Currently, its systems operate on around 400 vehicles in the city.

“Of course at first they really don’t appreciate it,” said Lee of CLP’s drivers. After three to six months of education, however, attitudes slowly changed.

“The Hong Kong bus and taxi drivers may work over 10 hours per day. So we will teach them by training, by lessons, by different methods–maybe talk to the management and help the management to persuade them,” Lee said.

He compares the situation to the widespread adoption of GPS tracking and basic in-vehicle cameras over the last decade. Drivers gradually accepted the initially intrusive technology because “they know that this kind of system can protect them” from liability in accidents.

Consumer-facing applications

Five months before the Chongqing bus fell into the Yangtze River, killing 15, another case of driver-passenger violence attracted national attention. In May 2018, a woman using online ride-hailing platform Didi to hitch a ride was murdered by her male driver. Just a few months later, in August, another female passenger using the same service was raped and murdered by the man behind the wheel.

The incidents sparked a nationwide backlash against Didi, and provoked official scrutiny—leading the platform to adopt a series of new safety measures, from an emergency number linkup for passengers to optional video or audio recording of rides.

Asked whether high-tech AI features might soon enter ride-hailing companies’ arsenals, both Liang and Lee said the industry showed potential.

Companies in the field are currently in talks with Reconova over facial recognition solutions to verify drivers’ identities, according to Liang. In both of last year’s high-profile Didi murders, the culprits posed as registered drivers on the app. “This need exists,” said Liang.

Tal Krzypow, vice president of product management at Israeli computer vision firm Eyesight, says  China’s ride-hailing market is just as interested in driver surveillance as “any other fleet.”

Eyesight is currently working with original equipment manufacturers and aftermarket partners to provide driving monitoring system solutions to China. “There is a willingness to adopt new technology and going to market quickly is very impressive” in the country, Kryzpow told TechNode.

Using advanced and often expensive technology such as machine learning to analyze video footage, however, may not be on the table for those companies as of yet. Lee pointed out that ride-hailing startups may not be inclined to invest so much in individual cars and drivers. However, with pressure from government as well as popular sentiment, that could change, Liang said.

Lee also foresees a larger shift to the consumer market as driver surveillance technology continues to advance. Once more affordable, accessible devices are released on the market,  “maybe the customer can just buy it from the Internet and they can install it themselves very easily.”

Privacy concerns

In a written statement compiled for TechNode, analysts from international firm BIS Research predicted rapid growth of connected and partially autonomous vehicles in China over the next two years. As a reference, they cited the Chinese government’s prediction that the domestic market for connected auto will grow to $14 billion by 2020.

However, the increasing amount of data will also require cybersecurity upgrades. “Vehicles need protection from threats such as malicious software, unauthorized access, attack on vehicle CAN [controller area network] BUS and ECUs [electronic control units], sniffing of vehicle data, loss of cloud data, and malicious codes in the vehicle, among others,” BIS analysts wrote.

Speaking of another sector of Reconova’s, smart security and surveillance systems for corporate and official clients, Morgan Guo said that “privacy will be protected.” According to Guo, the company itself doesn’t permanently store visual or other information gathered by its software, although he admitted that China’s government is by law allowed to do so.

Currently, more than 200 electric vehicle manufacturers, including Tesla, BMW, Volkswagen, and Nio have been called upon to transmit their vehicles’ location data to government-backed monitoring facilities.

That raises the question of where the data gathered by systems like Reconova’s and GreenSafety’s will be stored, and who will have access to such valuable information. Generally, how the technology is implemented is left up to buyers.

“We do provide guidelines,” said EyeSight’s Krzypow.

As Berkeley professor Alexandre M. Bayen, who directs the university’s Institute of Transportation Studies, told TechNode, however, individual drivers’ data privacy could already be compromised. According to Bayen, the issue “in a sense started 10 years ago.”

He referred to the advent of smartphones, as well as the data-gathering that accompanies their use: “Your phone activity while you’re driving, potentially the onboard car activity if your car is somehow hooked up with your phone to Bluetooth or any other link.” “All that data, it’s already there, it’s already available,” and being accessed by large tech corporations like Google, Bayen added.

“With more data, of course, the problem grows,” Bayen said. But he believes that the ultimate responsibility of protecting that information falls on the government. “To me, the technology is just a means to reveal the data; the real question is the question of policy,” Bayen said.

With additional reporting by Chris Udemans.

At a company conference yesterday, Tencent Auto Intelligence (TAI)’s vice president Zhong Xuedan announced that it will launch voice-enabled WeChat services in its connected vehicle ecosystem this year, ifanr reported (in Chinese).

The planned features include only chat, calls, and GPS navigation for now. All aspects will be voice command-enabled, purportedly to reduce driver distraction and risk of accidents.

Using the TAI system, drivers will be able to hear WeChat messages read out loud to them and dictate responses, initiate conversations, and find contacts without taking their hands off the wheel. When receiving calls, drivers will also be able to accept or reject calls with voice commands. In addition, after receiving a GPS location pin from a WeChat friend, drivers will be able to easily launch directions to the place.

In the future, in the hardware department, Tencent also announced that a custom steering wheel will have a button that enables users to turn on WeChat while driving, or switch between different vehicle apps. In addition, using a Bluetooth-phone connection, the car’s WeChat system will be able to switch on and off as the driver enters and exits the vehicle.

As of publication, a WeChat representative had not yet responded to TechNode’s request for comment on the risk that in-car WeChat features pose by distracting drivers.

While the announcement to roll out the features this year is new, Tencent unveiled the concept of TAI last month, with the aim of connecting auto companies, developers, and consumers. According to its official website, the ecosystem has already partnered with major auto brands including Mercedes-Benz and BMW, as well as Chinese companies Nio, BYD, and GAC.

What if there was a way to deploy autonomous vehicles prior to technological perfection? China may have found a way: build environments where AVs can operate separate from everything else. In this case, the key to success is infrastructure rather than technology.

On the one hand, AVs are not so complicated; OEMs simply bring together various hardware, software, mechanical and other technologies and make them work together. In the words of one industry executive, “It’s relatively easy to manually convert today’s automobile into tomorrow’s AV.” Indeed, universities regularly host competitions, pitting teams against each other to do just this. “The problem,” my interlocutor continues, “is how AVs behave when they are surrounded by less intelligent vehicles as well pedestrians, cyclists and so on.”

The Society of Automotive Engineers lists six levels of driving automation: Level 0 through to Level 5. For Level 0 vehicles, a human must constantly supervise and control the vehicle at all times and in all conditions; any technologies present are purely supportive and only provide warnings or momentary support (e.g. blind spot warnings). At the other end of the spectrum, for Level 5 vehicles, a human does not need to do anything; the vehicle can drive itself under all conditions and in any circumstance.

Today, the industry is focused on Level 4 capabilities; vehicles that can drive themselves but will instruct the human to take over under some circumstances. German automaker Audi’s new Q7, for example, is a Level 4 AV; while in China, software companies such as WeRide.ai and Pony.ai are focused on producing AI-driven Level 4 software technologies.

Transitioning to Level 4 is very difficult because of the fundamental shift in human-computer interaction it necessitates. There are two issues here. First, requiring a human to take control of a highly automated system is problematic. Initial findings from the terrible Boeing 737 Max crashes point to the cognitive limitations of humans trying to respond to automated systems that behave in unexpected ways. When a Level 4 AV asks the passenger to become the driver, there may only be a five-second window; not enough time for most humans to respond effectively.

Second, the problem of mixed equipage. This refers to environmental factors and the very likely scenario of Level 4 and 5 AVs operating in public with other (non-intelligent) vehicles as well as pedestrians. Japanese automaker Nissan takes this topic so seriously they set up a Human Understanding and Design group—anthropologists are among its staff—to answer the following question: exactly what constitutes “socially acceptable” behavior for an AV? Consider a crosswalk: even with clear rules of engagement, very often the driver and pedestrian will make eye contact to decide who proceeds first using subtle facial and hand gestures that AVs cannot currently recognize, let alone interpret.

China has a solution to these conundrums: deploy AVs in controlled environments while AI and software technologies develop. This extends beyond university campus buses and seaport facility trucks. While other nations must retro-fit their road network to accommodate AVs, China is still building cities and roads; it can therefore design them AV-ready from day one. The government of Zhejiang province, for example, built the country’s first “super highway” for AVs, connecting Hangzhou and Ningbo cities. This is just the beginning; China has identified more than 200 pilot cities as part of its Smart City agenda. Moreover, some industry executives are expecting Chinese authorities to implement strict regulations rendering some road lanes—even entire highways—as “AV only.”

These regulations may be necessary given the government’s aggressive targets: 50 percent of new cars must have driver assistance and partial or conditional autonomous driving features by 2020; 10 percent of all new cars must have fully autonomous capabilities, also by 2020; and Level 4 AVs need to be available for purchase as early as 2025. As socially acceptable behavior still has a long way to go for AVs, giving them their own roads seems to be the best solution for now.

Concurrent with technology developments, regulations and standards will also help the transition to full autonomy. But emerging AV standards in China are cause for concern. One standard, for example, requires autonomous buses to automatically break at speeds of 60 km/h when a pedestrian walks in front of the bus (within its 45-degree peripheral vision). This use-case, it was pointed out to me, is utterly useless on AV-only lanes and highways (where pedestrians are unlikely; but then again, this is China) as well as in mixed equipage environments, where speeds are slower and a wider peripheral vision closer to 180 degrees—or even 270 degrees—is necessary.

Nonetheless, while China continues to develop its AV behavior capabilities and experiment with standards, its infrastructure advantage may give it an edge in developing and deploying AVs faster than other nations.

腾讯车联与中国天气网达成战略合作 推动精细化气象数据进车 – Tencent Tech

What happened: Tencent Auto Intelligence, the tech giant’s smart vehicle unit, has entered a strategic partnership with weather.com.cn, a website run by the state-backed China Meteorological Administration to provide location-based weather forecasts to drivers. By providing minute-by-minute and mile-by-mile weather forecasts, the partnership could help car owners to adjust travel plans and make the best travel decisions, according to the company. In addition, the two companies will collaborate on a series of maps that provide information such as flooded areas in cities and popular travel destinations, among others.

Why it’s important: The connected car trend is creating new opportunities for tech companies, data providers, and car manufacturers to provide informational and entertainment services for passengers, as well as assist with road safety. Tencent has been making inroads into the smart mobility domain with a matrix of business that covers all car–related areas from smart car solutions, autonomous driving, and a WeChat-based auto payment system for parking. The tech giant is also working on an in-vehicle version of its messaging app WeChat. Tencent is competing with a series of domestic rivals that are increasing their bets on the sector, such as Baidu and Alibaba.

上海电信预计上半年可提供首批5G能力 – Shanghai Securities News

What happened: China Telecom’s Shanghai branch announced on Tuesday that the company is going to test its gigabit 5G networks in three spots in Shanghai in the first half of this year, including an industrial park, the city’s financial district, and a hospital. The next-generation wireless networks will be applied to different scenarios in these areas, including a cloud-based intelligent manufacturing system powered by high-speed 5G networks at the Shanghai Lingang Industrial Park, and an overall healthcare solution based on 5G technologies at the Yueyang Hospital. In the Lujiazui financial district, the company will provide 5G connectivity to financial institutions such as the Shanghai Stock Exchange to “explore the application of 5G to the financial industry.”

Why it’s important: This rollout marks the latest development in the 5G tests the Chinese government has been “guiding” with the three major mobile operators in various cities. A report by the Internet Society of China said that the first step of China’s 5G commercial deployment would be supporting applications such as connected cars and the industrial internet. It’s also believed that 5G will boost the internet of things since it was designed to connect billions of devices and sensors at a lower cost than older technologies.

Singtel, China Mobile in network-sharing IoT deal – The Straits Times

What happened: Singapore-based telecom company Singtel is partnering with China Mobile to improve the Internet of Things network infrastructure across the Asia Pacific region. The agreement will make the operation of IoT devices seamless across the two companies’ networks. Singtel’s head of IoT Diomedes Kastanis said the partnership will “generate economies of scale, allowing enterprises to accelerate the expansion of their IoT footprints in the two countries.” China Mobile will also make available its NB-IoT products to Singtel customers, expanding its market for the low-cost, low-power tech often used in infrastructure and health applications.

Why it matters: The unification of networks is crucial in achieving a truly connected IoT. If companies develop separate and unbridgeable platforms to manage IoT devices, it will difficult for customers to integrate disparate services. Such partnerships promise to make application management easier for end users. Singtel has also teamed up with Microsoft to launch an AI-powered IoT cloud network which serves the same purpose. However, the more devices are that connected, the more fearful consumers are for the safety of their personal data. A study by the Internet Society found that 90% of respondents want a security standard to be implemented across all IoT manufacturers and service providers.

Shanghai taxi driver Yuan Wei isn’t concerned about being replaced by autonomous vehicles (AVs). “No one will be able to afford an unmanned car,” he says. “It must be expensive. Maybe RMB 1 million (around $150,000) or RMB 2 million.” Yuan may be right about the price of a driverless car—at least given today’s technology—but the threat to his livelihood may be closer than it appears.

The middle-aged cabbie was driving around Anting Town, the hotbed for automobile innovation that lies 40 kilometers northwest of downtown Shanghai. In Anting, charging stations for electric vehicles line the streets and electric taxis seem to outnumber their gas-guzzling counterparts. As Yuan pulled over to pick me up, a sign overhead drew my attention: “Intelligent Connected Vehicle Test Road,” it read. Unbeknownst to Yuan, he had stumbled upon one of two government-approved testing areas for self-driving cars in the city.

“There are driverless cars here?” he asked later. “I haven’t seen any.”

China has set ambitious goals for AVs. By 2020, half of all new cars on the country’s roads are expected to be autonomous or semi-autonomous. For now, they’re still restricted to driving on designated roads, but that will change. The number of these vehicles is expected to reach 8.6 million by 2035.

Self-driving cars and several related industries are crucial to China’s long-term plan to upgrade its economy by shifting away from traditional manufacturing. But autonomous vehicles are especially important. Their success is underpinned by the country’s artificial intelligence (AI) prowess, for which the national government has set formidable goals. The State Council, China’s cabinet, wants to be a world leader in AI by 2030, making the country’s self-driving development even more pressing.

A number of forces are driving China to take the AV wheel faster than other countries, but widescale adoption will be challenging. Legacy vehicles and self-driving cars will share the roads for some time, and traffic infrastructure will have to be drastically rethought. For better or worse, the transportation experience and the shape of our cities will be significantly shaped by the model and pace of AV adoption.

A call to arms

To keep up with the United States, China laid out national guidelines for testing self-driving cars in April last year. City governments have followed suit. Beijing, Chongqing, Shenzhen, and Guangzhou, in addition to Shanghai, have opened their roads to AVs.

Tech giants and startups are taking advantage of the government’s favorable regulatory environment. Baidu, Alibaba, and Tencent are all developing platforms for self-driving vehicles while partnering with vehicle manufacturers.

Shanghai-based electric vehicle startup Nio is developing a self-driving car dubbed Eve, expected to be released in 2020, while Byton, which plans to open a vehicle factory in the eastern Chinese city of Nanjing this May, is developing its autonomous K-Byte model for launch in the same year.

In the parlance of AVs, most cars currently on the road are considered Level 0 vehicles—wholly dependent on their drivers. At the other end of the spectrum, Level 5 systems are entirely independent of human intervention in all situations.

Most Chinese autonomous driving companies are currently focused on Level 4 autonomy—fully independent within certain conditions. Level 3’s conditional automation systems are often seen as too dangerous for public use, as drivers are slow to take back control of the vehicle if a problem arises; companies like Google are opting to skip this level entirely. However, some companies, including Beijing-based Autobrain, are looking to take Level 3 vehicles to market by 2020.

Mobility services

At around 120 cars per 1,000 people, China’s rates of vehicle ownership pale in comparison to Europe and the US, says Bill Russo, ex-Chrysler executive and founder of consultancy Automobility. According to World Health Organization data, there were 830 vehicles per 1,000 people in the US in 2015, six times higher than in China. In the European Union, that number totaled just over 500.

“China … is starting at a different place and is perhaps willing to experiment in different ways, not just because the government wants it to, because the market is different, and because people don’t have deeply rooted [car ownership] habits,” Russo said at an industry event in Shanghai.

With low rates of car ownership and high demand for mobility, China has become the biggest ride-hailing market in the world. According to market research company Statista, the number of people in China using mobility services increased by 16% in 2018, reaching nearly 260 million. The number is expected to rise to more than 290 million this year.

In 2017, Didi Chuxing, China’s largest ride-hailing firm, facilitated more than 7 billion rides, according to the company, compared to Uber’s global total of 4 billion. Last year, the Chinese giant operated around 30 million rides a day.

While Didi dominates the market, other players are seeing increasing growth. Dida Chuxing became the second largest ride-hailing platform in China in October, jumping to 10 million daily active users. Other players include Meituan and Banma.

Just as the maritime industry served as a catalyst for public adoption of radios in the early 1900s, ride-sharing networks will act as a forerunner in AV adoption, using the data they collect to improve their self-driving abilities, while paving the way for more widespread adoption.

Still, nobody envisions a full-scale shift to driverless ride-hailing services anytime soon. Level 4 self-driving cars may be capable of functioning autonomously, but certain weather conditions pose a significant challenge to these vehicles’ self-driving capabilities. Consequently, mobility services would be well-equipped to handle such limitations by deploying AVs when road conditions are right, but continuing to use human-driven cars when their driverless counterparts can’t operate.

Those same limitations would make private ownership of self-driving cars less practical, at least in the initial stages of development.

A move away from sharing

On the tip of the eastern peninsula of Shanghai’s vast Pudong District, hugging the Yellow Sea, lies the almost perfectly circular Dishui Lake. Although the name translates to “Water Droplet Lake,” when seen from above, this man-made lake would seem to have been created with a hole punch.

Concentric roads surrounding the lake spread out like ripples. Similar to Anting, the area has been designated for autonomous vehicle testing. To a casual visitor, however, the sparse lanes feature more street sweepers than vehicles of the future. It looks much like any other developing part of Shanghai.

Throughout the 20th century, urban development around the world has been inexorably shaped by cars as highways feed sprawling low-density suburbs.

“The car has dictated major city developments in China,” Vicky Chan, founder at Avoid Obvious Architects, told TechNode. “It’s quite dramatic. Many cities are home to big company headquarters, which are meant to be appreciated from the highway.”

Private ownership of AVs, which is expected to become viable in a decade, could exacerbate urban sprawl. Imagine a scenario in which you could sleep or work in your car en route to the office. You could choose to live further away from work. But if everyone decided to do so, traffic congestion would rise commensurately.

Some have argued that in the next 10 to 20 years, AVs could become even cheaper to own and maintain than legacy vehicles, with their simpler electric engines and lighter bodies. The cost of manufacturing could also be reduced by removing driving interfaces—the steering wheel, the dashboard, and foot pedals.

The increased affordability and convenience of owning a car could make driver’s licenses an anachronism in an automated world, further increasing the number of vehicles on the roads.

“It can’t be that everyone is alone in their own capsule in their own vehicle,” said Tom Kirschbaum, founder at European public transport technology solutions provider Door2door.

“It’s clear that by only making vehicles autonomous you won’t win in terms of effects on congestion,” he said.

Research shows that the knee-jerk reaction of building more roads to alleviate congestion doesn’t work. A study by the US National Academies of Sciences, Engineering, and Medicine found that every 1% increase in a highway’s capacity results in a  0.7% traffic increase in one to two years and a 0.3%-1.1% rise after five years.

The question, then, is whether networks of autonomous vehicles can provide a feasible alternative to the appeal of privately owned cars. According to Henry Liu, vice president of Didi, the future of transportation is not hailing a vehicle, but instead a seat in a car, making driverless fleets a smaller version of public transportation.

To Kirschbaum, blurring these lines is vital: “The gold standard in mobility would be a scenario where the user has a very seamless way of using a variety of transportation modes.”

The challenge lies in pushing cities to factor in technological innovation when making long-term policy decisions. “They try to figure out the impact for the next 10, 15, or 20 years. At times when things are changing so fast, and technology is changing so fast, this is a big clash,” he says.

Alibaba is developing a voice-driven version of its enterprise communication and collaboration app DingTalk for vehicle use, local media is reporting, citing people familiar with the matter.

The service is expected to be integrated into Banma System, the AliOS-enabled operating system for connected cars which Alibaba developed with its strategic partners Banma Network Technology—a joint venture between Alibaba Group and SAIC Motor Crop. The system is installed in over 600,000 cars so far, and thus may facilitate the adoption of the new DingTalk version when it’s being released.

“Making sure that drivers can keep their eyes on the road and hands on the wheel are the bottom line for in-vehicle interaction, but the challenge is huge,” the source added.

It’s interesting to note that Pony Ma announced earlier this month that Tencent is also planning to bring its social networking app WeChat to cars by leveraging voice-control technologies.

As the world’s fastest-growing automotive market, China is experiencing an increase in connected in-vehicle infotainment roll-outs. Developing plans for in-vehicle versions for both WeChat and DingTalk, the default instant massaging tools for personal and professional communications in China, is in line with the trend.

Chinese internet giants have been expanding aggressively to car-related technologies from electric cars to autonomous driving, and connected cars are one of the sectors that’s become highly competitive. In addition to Alibaba, Baidu has its DuerOS and Tecent just launched TAI Smart Car System this week.

Apart from in-house development, Alibaba also partnered with the world’s top automaker like BMW, Honda and Ford, helping them leverage new technologies of artificial intelligence, big data, cloud computing, the Internet of Things.

Most of the smart-car service providers only do a re-developing of the mobile apps in an attempt to duplicate the smartphone ecosystem for the automotive industry. But the car-targeted services need a custom design due to the huge interaction differences for smartphones and cars.

Faraday Future, the EV startup funded by wheeler-dealer LeEco founder Jia Yueting, seems to have begun construction work for an electric vehicle plant in Guangzhou’s Nansha district through its newly-formed affiliate Ruichi Smart Car. The move could prove controversial as Jia and his business network are highly indebted in China and his assets frozen here.

The plot of land designated for construction in a part of the free-trade zone dedicated to smart equipment and new energy vehicles was bought by Ruichi Smart Car on April 8th. However, the source of the funding for the RMB 364 million plot is unknown. The Paper visited the site of the plant (in Chinese) to find construction workers preparing the fertile farmland for building. Other workers at the site denied it was for Ruichi. 

Faraday Future is Jia Yueting’s attempt to take on Tesla with luxury smart EVs that are autonomous-ready. After hemorrhaging cash, the venture has been bailed out by unknown investors in Hong Kong to the tune of $2 billion. Following complex stock rearrangements, about 45% of Faraday Future now belongs to a range of companies in the Cayman Islands and British Virgin Islands, according to The Verge. The company’s IP is being used as collateral meaning Jia and Faraday Future is in a precarious position. Jia is the founder and CEO of the company but the ownership of Faraday Future is unclear. 

The cash injection has allowed Faraday Future to restart its failed attempts at establishing a factory in the US and could enable it to reach its goal to start production in China. A document seen by The Verge shows that Faraday Future had planned to make 10,000 cars in China by 2019.

The Paper found that Ruichi Smart Car (睿驰智能汽车广州有限公司) was founded in February 2018 as a “Hong Kong, Taiwan, Macau sole proprietor” type limited liability company with a registered capital of $300 million. Its legal representative is Wang Zhigang whose personal address was provided and happens to be in the same Shanxi village as where Jia Yueting is from. Ruchi Smart Car has already founded two separate limited companies. The reporter also found that Ruichi Smart Car staff appeared to have moved into its registered office in the same building as the Nansha Development Zone Bureau.

The Paper inquired as to the approval of the Nansha land purchase by the Faraday Future affiliate. A Nansha District official replied with:

“The 40 hectars of land that the Ruichi Company acquired in Nansha will be used to invest in the R&D and production bases for fully electric vehicles. Ruichi Smart Car is a foreign-invested enterprise established in accordance with regulations in Nansha District. It is an affiliate of Faraday Future and has no legal relationship with LeShi Holdings, a company controlled by Mr Jia Yueting. It is operated completely independently.”

According to a security guard, the staff on the newly-occupied floor did not want people to go up to the offices. Previously, The Paper visited the construction site of a previous LeShi car plant scheme at Moganshan to find it all but abandoned.

Jia Yueting and the LeEco group have proved increasingly controversial. Jia and his affiliates owe RMB7 billion to mainland debtors according to a stock filing, reported the Financial Times. Since his assets have been frozen and the authorities have called on Jia to address the debt problem, he has remained in the US and even sent his wife back to China to do his business.

Didi Chuxing is launching a program to alter the very nature of car ownership and shake up the automobile manufacturing supply chain in China—and beyond. The company masterminded a shift to “car operation” announcing the move at a glitzy event in Beijing attended by auto industry top brass.

“In the future, software, hardware, and user services will be integrated,” said Cheng Wei, Didi CEO. “And we will be the service provider.” He has hopes that China will become a great automotive nation (汽车强国) in the next five to ten years. This involves Didi becoming the biggest one-stop solution to transport worldwide, to manage the car operation platform and be the world leader in smart transportation.

Didi will also be involved in the design of a car specially developed for ride-hailing with a predicted market of 10 million units in 10 years’ time with the help of the D-Alliance. The alliance, also called Didi Auto Alliance or Torrent (洪流联盟), is a platform that brings together 31 auto partners. The name in Chinese (hongliu or “torrent”) comes from the water drops in the characters for Didi (滴滴 or “drip drip”) as the company sees its drivers and vehicles coming together as droplets to form a torrent.

The platform includes some of the biggest players in China’s automakers and original equipment manufacturers (OEMs)—FAW, BYD, Beijing Automotive Group (BAIC), and Guangzhou Automotive Group (GAC). Didi is already working with BYD to develop the “D-1,” the first car developed specifically for ride-hailing. According to the figures, the D-Alliance would let DiDi control 50% of the transport needs of 2 billion people.

The platform would mean car manufacturers become car operators in an end-to-end chain from car manufacturing to refueling/recharging to maintenance. Private individuals would not need to own their own cars, nor would Didi. Instead, the ride-hailing giant would be involved in car design and would coordinate the entire system, making the vehicles available for ride-hailing or short-term hire. The platform will even look into ways of providing financing.

As the biggest provider of transport both in China and the world, Didi is well positioned to lead such an alliance—and take a cut in more areas of transportation than just rides. The company has 30 million rides per day and envisions a user base of 2 billion people worldwide.

Ride-hailing by Didi is based on private car owners in countries such as China. However, in markets where private car ownership is low, a new model is needed. Didi has tried leasing vehicles to drivers, but it was not cost-effective. The current solution could be to do away with private ownership and, eventually, with leasing.

“No cars have been designed specifically for sharing [ride hailing] as they are all owned by drivers,” said Cheng, “Manufacturers should provide more customization of vehicles that are used for sharing.”

Safety, efficiency, and emissions reduction are three of the goals of the Alliance. 260,000 electric vehicles—almost a third of all electric vehicles in China—are currently taking passengers for Didi. The company has China’s largest fleet of EV numbering around 15,000 at present via a joint venture with BYD, with the aim to be “operating” over a million by 2020, said Didi VP Jesse Yang Jun.

Didi has already been working with BYD for two years, including on the D1—the first car to be designed for sharing. “The data from our hundreds of millions of journeys show the importance of safety,” said Yang. The model, expected to be ready within five years, will incorporate AI features to enhance traffic safety, passenger safety, and battery safety.

Efficiency modifications focus on city-wide traffic congestion, but also on the cost per kilometer for operating the vehicles. The aim is to reduce the overall running cost of a vehicle by half, in part by utilizing the company’s big data.

“We want Didi to become the incubator for the whole chain,” said general manager Chen Xi referring to the manufacturing to maintenance model of “car operation.”

Members of the alliance shared their opinions in a panel hosted by Didi president Jean Liu who shared that it was a Didi requirement that senior management all learn to drive so they can experience it for themselves. Xu Heyi, chairman of Beijing Automotive Group, said the D-Alliance supports the call of Chinese President Xi Jinping and the central government to embrace innovation.

The general consensus among manufacturers was that attention would shift from the exterior design and appeal of cars to the interior. Xu Heyi said the car constitutes the third most important place in people’s lives after the home and the office.

Alibaba Group and the Ford Motor Company have signed a Letter of Intent today to collaborate on connectivity, cloud computing, AI, and mobility services. The main thrust of the agreement seems to be on ways to sell the new electric vehicles Ford will be manufacturing in China.

Details so far are slim, but a release from Alibaba states the three-year agreement will aim to “redefine how consumers purchase and own vehicles, as well as how to leverage digital channels to identify new retail opportunities”. This suggests the agreement is less on the core aspects of a vehicle, and more about how to keep selling services to owners, a business model familiar to Alibaba.

“Our data-driven technology and platform will expand the definition of car ownership beyond just having a mode of transportation and into a new medium for smart lifestyle,” said Alibaba Group CEO Daniel Zhang in the release.

“Collaborating with leading technology players builds on our vision for smart vehicles in a smart world to reimagine and revolutionize consumers’ mobility experiences,’’ said Jim Hackett, Ford’s President and CEO.

Four of Alibaba’s business units are involved in the collaboration: AliOS, Alibaba Cloud, Alimama and Tmall. The first project will see Ford and Alibaba conducting a pilot study on digital solutions for retail. These will include pre-sales, test drives, and financial leasing options.

The announcement follows Tuesday’s news that Ford is planning to introduce 15 electric and hybrid car models in China by 2025. The Chinese government has been actively promoting the development of the electric vehicle industry with consumer incentives. The 10% tax rebate has fueled rocketing demand in China. The government is also allowing foreign manufacturers to set up plants without establishing joint ventures.

The government if so firmly focused on an electric future that is has also committed to establishing a timetable for banning internal combustion engines. For domestic manufacturers, they will also have to develop electric vehicles to be able to go on selling traditional cars. VW, GM and Daimler are all committing to enter the electric vehicle fray in China.

The agreement with Ford brings Alibaba further into a government-backed industry. Meanwhile it gives Ford access to Alibaba’s retail prowess.

Speaking in Shanghai on Tuesday for Ford’s announcement, Ford’s chairman, William C Ford  summed up the company’s stance on China: “When I think of where EVs [electric vehicles] are going, it’s clearly the case that China will lead the world in EV development.”

Ford outlined the next phase of its China expansion strategy today, focusing on SUVs, electric and connected vehicles, a streamlined business structure and closer connections to Chinese customers. Jim Hackett, CEO of Ford Motor Co mentioned that the speed of decision making is much faster in China than the US, and said Peter Fleet, Group Vice President & President, Ford Asia Pacific and Jason Luo, Chairman and CEO, Ford China are now fully in charge of China market.

“The evidence is that [our] Chinese organization is run in China,” Hackett said at the press conference held in Shanghai.

“China is not only the largest car market in the world, it’s also at the heart of electric vehicle and SUV growth and the mobility movement,” said Bill Ford, Executive Chairman of Ford.

Here are six things that we learned about Ford’s plan to bring more smart vehicles into China by 2025.

1. All new cars will be internet-connected by 2019

By the end of 2019, 100 percent of new Ford and Lincoln-branded vehicles in China will be connected through either embedded modems or plug-in devices. Ford’s company leaders also said they are working on broader infrastructure opportunities to improve future mobility experiences. Ford’s investment in electrified vehicles is to date $4.5 billion.

2. Ford will introduce more than 50 new vehicles in China by 2025

Ford plans to offer more than 50 new Ford and Lincoln vehicles in China by 2025, and at least 15 new electrified vehicles from Ford and Lincoln. And the new Zotye-Ford joint venture will deliver a separate range of affordable all-electric under a new brand, pending regulatory approvals.

Ford said that they will contain structural cost in the region throughout 2018 to grow its China revenue by 50 percent by 2025 versus 2017.

3. Ford continues working with Baidu on autonomous vehicle development

Ford is one of the founding members of the Board of Baidu’s Project Apollo, building on the agreement signed earlier this year.

In 2014, Ford developed a China market-targeted SmartDeviceLink, an open-source voice commander, together with leading Chinese mapping service providers Baidu and AutoNavi. Last year August, Ford and Baidu jointly invested $150 million in Velodyne LiDAR, a company that makes sensors for autonomous cars’ mapping, localization, object identification, and collision avoidance.

The Apollo Open Platform accelerates the development, testing and deployment of autonomous vehicles. The TechNode team actually had a chance to try out their autonomous cars in this July, when Baidu released their autonomous driving ecosystem Apollo 1.0 with their 50 partners, including Ford.

Ford’s participation supports the company’s robotics and artificial intelligence research efforts and provides an opportunity to contribute to a platform that will be key to developing autonomous vehicles in China.

“We are responding to the rapid pace of change by delivering increased connectivity and working to improve and simplify mobility for everyone,” Hackett said. “This builds on our commitment to deliver smart vehicles for a smart world, helping people around the world move more safely, confidently and freely.”

4. Ford puts importance on SUVs in China

Starting in 2019, the company plans to locally assemble five more vehicles in China for Chinese customers including a Lincoln premium SUV and the company’s first global all-electric small SUV. The expanded product portfolio reflects an even stronger emphasis on SUVs. As Chinese families start to have two children after putting down one-child-policy last year, SUVs will be a more attractive option for Chinese consumers.

“From luxury Lincolns to Ford cars and SUVs, to an all-new electric vehicle brand, we will meet the growing desire and need in China for great new energy vehicles,” said Jason Luo, chairman and CEO of Ford China.

Ford said Lincoln, Ford’s luxury brand in China, will maintain its separate dealer network to offer its one-size-fits-one customer experience.

5. Ford is strengthening ties with its joint venture partners Changan and Jiangling in 2018

Ford is strengthening ties with its joint venture partners Changan and Jiangling in 2018, establishing one distribution services division responsible for the marketing, sales, and services associated with all Ford vehicles sold in China.

“Now is the time to deepen the partnerships we have with Changan and Jiangling Group and present one Ford brand in China,” Fleet said. “The new distribution services division will enable us to offer an enhanced experience for our customers and more closely connect with our dealers and the community.”

“All of the actions outlined today reflect an unprecedented commitment to focus on the needs of consumers in China through a more fit and streamlined Ford,” he added. “They are proof of our dedication to grow our business in China.”

6. Ford wants to cater to Chinese consumer’s taste

In 2019, the company will start producing five additional Ford and Lincoln models in China to further tailor vehicles to more closely meet the needs of Chinese customers.

“Some of our most advanced manufacturing and innovation facilities are here in China,” said Fleet. “Producing more vehicles for China locally allows us to improve the benefits for our customers, our partners, and our bottom line.”

Ford last month opened the Nanjing Test Center, which includes close to 80 different types of real road surface conditions, a three-kilometer test track and a sophisticated emissions testing facility, to speed development of new products, services, and technologies to meet the unique driving requirements of Chinese customers. Jason mentioned that there are 2,000 engineers working in Nanjing.

The company also launched Quick Lane, its customer service provider in Nanjing and Chongqing this month, offering routine vehicle maintenance and light repair services. Ford plans to open 100 new outlets next year.

Baidu has launched an autonomous driving ecosystem with 50 partners at its first AI developers conference in Beijing. At its heart is the US-developed code for controlling the vehicles, but the scope of Apollo 1.0 is to create an entire ecosystem encompassing research universities, components makers such as NVIDIA, navigation developers such as TomTom, and car manufacturers including Ford, Daimler and FAW (Volkswagen’s joint venture partner in China).

The federation approach is radically different to that of the traditional manufacturers and is expected to allow more companies to participate. “It even allows a range of different business models to operate within the ecosystem,” said Baidu COO Lu Qi.

The code for Apollo 1.0 is completely open-source and will be available on Github. Documentation will be updated weekly and the code fortnightly with overhauls planned for September and December—when fully autonomous urban driving is expected to be achievable.

Baidu co-founder and CEO, Robin Li, introduced the new ecosystem via a live link up to his driverless car as he headed to the conference along Beijing’s fifth ring road. The 4- to 5,000-strong audience was also shown a world-first: a video of two autonomous cars driving in the same test pen (which we later experienced for ourselves).

Another important part of the plan is Apollo’s Simulator Engine. The program uses real data about roads and junctions to create a simulation for virtual cars running on Apollo. A demonstration at the conference showed a simulation of a car crashing at an intersection and then how the code would be fixed and uploaded for the Apollo team to check before being added into the overall source code. This way “. . . Apollo can be tested over millions of kilometers every day,” said Lu, who estimated around 10 billion kilometers of testing is needed for an autonomous vehicle system, meaning Apollo’s R&D will soon accelerate beyond that of the competition.

Development

“We partnered with Baidu through a mutual client of ours in Silicon Valley and Baidu talked to us about creating the base platform for the Apollo project,” Josh Whitley, a software engineer at California-based AutonomouStuff who had come to Beijing to install his company’s software on the vehicles at the conference, told TechNode. “The Lincoln MKZ that they have here, the computing platform, they’re all provided by AutonomouStuff.”

Whitley managed to install the software on the Lincoln’s drive-by-wire system and test and tune it in just three days, a process that would normally take a dozen workers six months.

“The Apollo software is very flexible, made to accommodate different vehicles very easily. The feature set is mainly for recording a GPS-based route. [Apollo] is definitely better at a specific set of things [than other platforms],” said Whitley. “Part of the core infrastructure is a safe run-time environment—a real-time operating system—that won’t skip any commands or be delayed waiting for vehicle catch up.”

“The intent, for the Chinese market and eventually for other markets, is to make it a unified software platform for all the Chinese automakers and then others to use,” added Whitley.

Application

“China is very much about one solution in general. Think of WeChat – there’s one solution. Didi – one solution,” Lei Ma, a senior product manager of autonomous driving at Baidu, based in Silicon Valley, told TechNode. “We’re hoping that Apollo becomes that one solution for autonomy.”

According to Ma, Baidu will make no claim on any use of its source code, however, it is used: “People are free to take Apollo, modify it or not, put it on a car and say ‘we’re selling autonomous vehicles’. Baidu does not lay claim to revenue, data, intellectual property. They can take it and commercialize it, anywhere in the world… Of course, if you work with Baidu, we can make things move a lot faster.”

The nature of establishing an ecosystem rather than a closed garden set up means the system is expected to accelerate, according to Lu Qi: “In 3 to 5 years China will lead the world in autonomous driving.”

Baidu’s AI operating system, DuerOS, will be fundamental to the application of Apollo 1.0. “DuerOS means that Apollo could be compatible with different cars from different manufacturers, or you can build your own,” explained Lu.

Ma explained the ecosystem’s development within the China context. “Back to the ‘one solution,’ whoever creates that ecosystem—the biggest, the fastest—is going to be the single player. I personally think it’s going to be a winner takes all solution. There’ll be a first place, a second perhaps, and maybe only a very different third.”

Speaking of Didi as a ‘one solution,’ the ride-hailing company’s logo was absent from the display of partners at the launch, so we asked Ma if we can expect to hear anything soon. “I think Didi is interested, but they’re taking a wait-and-see approach. A lot of companies are. The companies we announced today are not the only companies we talked to.”

Test ‘Drive’

The two Lincoln MKZ’s running on Apollo 1.0 were available for us to take a ride. But before that, we took a spin in a Haval running on Baidu’s software- and hardware-based advanced driver assistance system (ADAS).

The ADAS is Level 3 in terms of autonomy, which means it’s assisted driving rather than a fully autonomous Level 4 system such as Apollo 1.0. The Haval SUV had been programmed to run a particular route through the tires but when a helper put a sign in the middle of the road it changed course. The ride was jiddery, as though to take a bend the car breaks the curve into a series of short segments.

“Comfort is, of course, going to be a very important factor in terms of commercialization, but it’s not the biggest priority [at the moment],” explained Lei Ma.

“There are limits to what the car will let us do. Going forward we’re hoping to work with a lot of car makers and have access to their drive-by-wire interfaces so we can calibrate those controls and make things comfortable, basically the same as a human driver,” said Ma.

“Put your seatbelt on,” said the otherwise redundant human driver when we switched to the Lincoln MKZ. Running on Apollo 1.0, the difference to the ADAS was palpable. It felt much more like a human was driving, though the car still went into corners at quite a pace like the Haval (perhaps we’re just more cautious on the corners).

“We’re trying to smooth out all the movements,” explained the engineer in the back, who explained he was there “to press the start button.”

The other MKZ made its own loops in the test pen and we can happily report that the two vehicles, though driving around the same tracks and coming close together, did not even come close to any sort of collision.

Volkswagen, Toyota, Alibaba YunOS and BYD displayed their connected cars at the World Mobile Conference Shanghai on June 28, 2017, showing the audience how their cars can integrate with our smarter world.

The global connected car market is expected to garner $141 billion by 2020. Senior Vice President of Alibaba Cloud, Hu Xiaoming, said they expect to put 700,000 connected cars powered by YunOS on China’s streets in 2017.

Comparing the apps that Volkswagen, Toyota, Alibaba YunOS and BYD are using for their connected cars revealed that all companies except for Alibaba YunOS had Ximalya FM integrated. Volkswagen and Toyota were using QQMusic, while Alibaba YunOS, of course, had an array of apps from Alibaba’s ecosystem – Alipay, Xiami, AliTravel, and Taobao.

“The key functions or applications that should be in the car include navigation and FM radio. The AMap (高德地图) and Ximalaya FM (喜马拉雅) applications are currently embedded in third-party cars. We use them because they are the most popular app in each category,” Loic Lee, senior product planning manager at Huawei told TechNode at Volkswagen’s booth.

So are these apps really the most popular app in their category? According to 2016 China App Rankings released by Cheetah Lab, the answer is yes. Ximalaya FM ranked first among China’s audio content apps with three times higher active penetration rate than No. 2 on the list. QQ Music ranked second on the music app ranking, following Kugou; both apps are owned by Tencent. In the navigation category, Amap ranked second, following Baidu Maps. Amap, however, has a higher number of weekly app openings.

Volkswagen – Open to many standards

Volkswagen’s newest SUV Tiguan R-line can connect with Huawei P10, iPhone, and Samsung phones. For example, an owner of Huawei P10 can connect to the car’s cloud via a USB cable. The car’s head unit display and the phone keep the same interface and experience. To control the car remotely from their phone and to call someone from the car’s head unit, users need to have a SIM card in the phone.

German car maker Volkswagen’s connected cars work with several device interoperability standards that offer integration between a smartphone and a car’s infotainment system, including Baidu Carlife, Apple Carplay, Android Auto and Mirror Link. In China, Volkswagen supports connection with Huawei’s P10, P10 Puls,  Huawei Mate 9, and Mate 9 Pro.

“Samsung also supports Mirror link, but Huawei, as a Chinese company, has the power to ask third-party apps to work with them. That way, we can provide more applications,” Loic Lee, senior product planning manager at Huawei told TechNode.

Toyota + SmartDeviceLink

Originally created by Ford, SmartDeviceLink is an open source platform that connects smart devices with a car’s on-board system. Toyota has included five apps that come with the car, including QQMusic, Ximalaya FM, Zuimei Tianqi (最美天气 literally, “the most beautiful weather” in English), Japan Travel Information app made by KDDI, and a four-dimensional navigation app. Toyota says it plans to launch SDL-powered connected cars in 2018.

Toyota and Ford launched the SmartDeviceLink Consortium earlier this year to help car manufacturers and app developers create integrated driving experiences. Members of the SDL Consortium also include Subaru, Mazda, and Suzuki.

BYD – A clean ride

BYD’s Qin (秦, referring to Qin Shihuang, China’s first emperor) comes preloaded with BYD’s own app stores, supporting connection with any Android or Apple phone. The Qin also comes with features made specially for the Chinese market: a Dual Mode that allows drivers to switch between full-electric and hybrid as well as an air filtration mechanism.

“BYD’s Qin model has an app that monitors the PM 2.5 levels inside and outside the car. When PM 2.5 reaches a certain level, the car can purify the air in 5 minutes,” said a BYD staff member at the exhibition.

Alibaba’s YunOS Auto

On March 2017, Alibaba Group’s YunOS released YunOS Carware intelligent vehicle operating system. The software supports applications for the car itself as well as a HUD (head-up display), driving camera, and an intelligent rearview mirror. Cloud-based data services enable YunOS Carware to anticipate user needs and recommend appropriate music, radio programs, or car services.

On top of that, YunOS Auto’s engine is able to process and analyze data about how people drive. Since August last year, the connected car gathered 11.7 billion data points on driving behavior. The data will be used to encourage drivers to change their driving habits, saving fuel and making cities smarter.

Currently, 23 mobile phones are using the YunOS cloud system, including DOOV, SOP, China Mobile, Xiaolajiao (小辣椒) and Meizu.

In July 2016, Alibaba’s joint SAIC officially launched the mass-produced connected car Roewe RX5. Chinese automaker SAIC (上汽) has several connected cars in the market with YunOS Auto integrated, including Roewe RX5 (荣威RX5), Roewe eRX5, Roewe ERX5 pure electric version, Roewe i6, Roewe ei6, 名爵ZS,  andChase D90 (大通D90). The top selling model is Roewe RX5’s with orders exceeding 100,000 in March and average monthly sales of over 20,000.

You won’t need to depend on the navigation anymore because the AR-powered Head-Up Display (HUD) of the car will show you holographic display directions to get to your destination. This will be powered by WayRay, a Swiss developer of a holographic augmented reality technology for internet-connected cars, freshly invested by China’s e-commerce giant Alibaba.

Topping up to its effort made in connected cars in the recent years, Alibaba Group has invested US$ 18 million in WayRay’s series B along with its existing investors, announced on March 14th. With the funding, the Swiss company has entered into a partnership with Banma Technologies to develop a new AR car infotainment system which capable of delivering contextually relevant information to drivers and engaging entertainment for passengers.

“WayRay’s making the windscreen a new medium for information. The futuristic in-car infotainment system is the first to use color holographic technology (they were previously only green). Furthermore, the system provides a smart driving assistant that collects your driving stats and patterns, offering up a gamified system of rewards,” said Mary Lapuk, head of communications at WayRay’s R&D base in Russia told TechNode.

WayRay has its own R&D center and prototyping factory and specializes in the development and production of transparent holographic displays based on HOE (holographic optical elements). Navion, WayRay’s first AR navigation system is the key to bringing this AR system. It is a standalone unit that uses holography to visualize timely and useful driving information directly in front of the driver’s eyes.

“Navion eliminates the need to look away from the road while driving, refocusing your eyes and helps to reduce distraction while driving, making your trip safer,” Mary says.

In 2017, the company plans to release a consumer version of Navion and to sign contracts with major global car manufacturers to implement their infotainment system. The company refused to disclose the mark and the model of the car which will be developed in partnership with Banma. However, the company mentioned that the retail sales of smart driving assistant “Element” will start within a couple of months in the US and China to analyze different driving styles.

“WayRay is a pioneer in transparent HOE of such large sizes, which act as virtual optical elements (diffraction gratings). This allows the creation of optical systems that deliver ‘true AR’ virtual images that appear in the distance – all within a small optic footprint,” Mary adds.

The company has also invested in research and development to further its material science expertise – creating materials for ultra-thin films, for example – and created software for the design of optical systems to record the diffraction patterns inside polymers.

Alibaba’s plan to “Open Sesame” your car

Ultimately Alibaba wants to get into future cars to enable you to “open sesame!” your car, that is, to voice control your car. And this effort is done through Banma Technologies, an independent startup invested by Alibaba Group and China’s largest automaker SAIC Motor, dedicated to making developments in internet-connected cars.

WayRay will work closely with this consortium to create an advanced AR HMI that integrates augmented reality navigation, driving assistant notifications, a virtual dashboard, and much more. The new system will be built into one of Banma’s 2018 car models, turning it into the world’s first vehicle in production with a holographic AR HUD display.

The global connected car market is expected to reach US$ 180.3 billion by 2022, and Alibaba is making steady efforts to get the grip of the market.

Alibaba revealed their YunOS-powered Roewe RX5 car November last year. Three models of Roewe cars have been launched in conjunction with Banma, committed to empowering the vehicle via data, computation and innovative mobility services. At the Single’s day event held in Shenzhen, Alibaba demonstrated how their connected cars listen to driver’s orders to turn the music or air conditioning on and book movie tickets. It can also direct a drone to navigate the running car and film the scenery around it.

The video below shows their smart car demo, starting at 2’33”.

Youku:

Youtube video link

Editor’s note: This originally appeared on Analyse Asia, a weekly podcast hosted by Bernard Leong, dedicated to dissecting the pulse of business, technology, and media in Asia. The podcast features guests from Asia’s vibrant tech community.

Horace Dediu from Asymco & Clayton Christensen Institute is back with the second Asymco trilogy on our podcast to discuss the major topics that dominate the world of business and technology: modular revolution, startup strategy, Apple & cars. In the final part of the second trilogy, Horace discussed whether traditional companies such as Toyota and VW Group can tackle disruption coming from technology companies, the perspective of Tesla as an energy company but not an automotive company and what the iPhone equivalent of the car will look like.

Listen to the episode here or subscribe.

• Horace Dediu (@Asymco), Senior fellow at Clayton Christensen Institute and his main site:Asymco.com and do check out Horace’s three podcasts: The Critical Path,  Asymcar and Significant Digits with Ben Bajarin which we highly recommend.
• The Automotive Industry moving forward [0:46]
  • I understand that you have visited Toyota and are also an avid reader to books relating to the history of transportation. I want to ask you in a series of questions. But to start off, I want to talk about Toyota. Toyota started out as a Japanese automotive company and it clearly understands that it’s under siege from Google, Uber, Tesla & Apple with the rumored Project Titan. How would a traditional company such as Toyota or VW group cope with such disruption coming forward? [1:36]
  • I have heard many times that your issue with Tesla is that they are not innovating on the manufacturing and production lines. To me, Tesla is an energy company. I did not appreciate until I am working on self-driving cars and its implications to logistics but the problem of energy is pretty important and the company has made leaps and bounds with their battery charging technology. Would it not be clear that they are actually disrupting the energy space rather than the automotive space? [12:30]
  • Recently, Benedict Evans pointed that the cars today are like feature phones integrating Android car and Apple car play. I asked Ben Bajarin who is recently on my show, and he thinks that Tesla is probably the best shot in getting to become the “iPhone” version for a car.  A recent read of the book “Losing the Signal” by McNish and Silcof described how the blackberry executives were blindsided and called the iPhone, “The Jesus Phone”. What do you envisage the “Jesus car” would be? [20:10]
  • Will disruption of the car happen when innovation coming from both high-end and low-end conditions similar to Apple in the smartphone industry? [25:39]

TechNode does not necessarily endorse the commentary made in this program.

Audi, the luxury car brand by Volkswagen, has signed an MOU with China’s three largest tech names, Alibaba, Tencent and Baidu, as they seek to expand their China-based connected car research.

The agreement, inked on Sunday in Shanghai, involved the three tech giants along with Audi parent company FAW-Volkswagen, and  lays out plans for future cooperation on connected car technology. 

“China has become an important lead market for digital technologies. Baidu, Alibaba and Tencent are strong innovators,” said Joachim Wedler, President of Audi China in a release.

Audi’s China operation, Audi China, is a wholly-owned subsidiary of Audi AG, has an R&D operation that focusses on connected cars, new energy driving, digital services and piloted driving, according to the company. It’s their biggest research facility outside of Germany.

Audi says they are already working with Alibaba on mapping technologies, including real time traffic data and high-resolution 3D Maps.

The automaker plans on integrating Tencent’s WeChat MyCar services, an auto-focussed feature based off the highly popular social messaging service WeChat, that will adapt location and music sharing services for cars. 

Audi also committed to a 2017 launch of Baidu’s ‘CarLife’ in its latest models, an in-vehicle digital platform designed for using Baidu applications. 

None of the parties have disclosed financial details of the cooperation, or specific details on how the tech giants’ competing services, such as mapping technology, would be mediated in future partnership activities with Audi.

The deal is significant because it marks the first open collaborative partnership between an automaker and China’s dueling tech tycoons. While many traditional car companies are hedging their bets across internet companies, none have made overt attempts to simultaneously integrate cross-platform technology from multiple Chinese tech companies of this size. 

Baidu is hoping to take its autonomous car project to the next level through a partnership with high performance chip maker Nvidia.

Baidu CEO Robin Li and Nvidia CEO Jen-Hsun Huang spoke together on stage at a Baidu event in Beijing last week. According to a blog post by NVIDIA, Baidu will contribute their cloud platform and mapping technology while NVIDIA will offer their self-driving computing platform and HD mapping solutions.

The partnership also renews the Chinese search engine’s competitive edge against local internet firm LeEco, which has been working on a similar cloud-based ecosystem for autonomous cars.

“We’re going to bring together the technical capabilities and the expertise in AI and the scale of two world-class AI companies to build the self-driving car architecture from end-to-end,” said NVIDIA in the blog post.

Together, the pair are hoping to develop autonomous parking and ‘level three’ autonomous vehicle control, which is the last level before fully autonomous (there are five levels all together).

Baidu has been rapidly expanding their testing grounds for autonomous cars both locally and abroad. The tech giant plans to establish ten local testing locations in China by the end of the year (current locations include Beijing, Wuzhen and Wuhu cities). Baidu recently received the go ahead from motor vehicle authorities in the U.S. to test vehicles alongside Google’s autonomous cars in California.

It’s not the first time Baidu and Nvidia have joined forces. According to Nvidia, the chip company has contributed components for other projects undertaken by Baidu’s artificial intelligence research unit, which is headed by Andrew Ng and based in the U.S.

Baidu recently joined automaker Ford to invest $150 million USD in detection technology for autonomous cars by Velodyne LiDAR Inc., as they continue to leverage partnerships in their goal to sell fully autonomous cars by 2018.

Qihoo 360, a Chinese tech company best known for its anti-malware software, is turning over a new leaf in product development.

Following the lead of other Chinese tech giants, Qihoo 360 launched its own AI research institute and is looking at developing smart driving applications.

“We have a very clear and long term target,” Shuicheng Yan, the Chief Scientist at Qihoo 360’s AI research institute, told TechNode. “Definitely it’s for smart driving. […] From product’s perspective, I consider smart driving as a major focus on the whole research institute.”

Leveraging Dr. Yan’s academic background in computer vision and deep learning, Qihoo 360’s AI research institute will primarily focus on image and facial recognition. While strengthening Qihoo 360’s existing IoT portfolio is the institute’s priority, Dr. Yan’s team is also looking at using AI to improve driver safety.

Qihoo 360 will start at the “zero level” of autonomous driving, he says, with advanced driver assistance systems (ADAS), including a rear-view mirror that helps people drive more safely. The company also plans to develop products that monitor driver behavior and assess the environment around the vehicle.

The company is also taking advantage of their own strengths in security.”If you have various connections within the car [or] if you want to connect [your entertainment system] to the internet, definitely you will have the security threatened,” says Dr. Yan.

Qihoo 360 plans to develop security software reminiscent of the company’s “Safety Bodyguard” [our translation] anti-malware mobile app. However, whether or not Qihoo 360 will go as far as to develop their own fleet of autonomous cars, similar to that of Baidu or Google, is still under discussion. The company also plans to conduct their own research on voice and speech recognition, but under a separate research organization, says Dr. Yan.

Pivoting To IoT

Qihoo 360’s smart driving plans are part of the company’s overall goal to focus on connected devices. At the Second World Internet Conference last December, Zhou Hongyi, chairman and CEO of Qihoo 360, dubbed IoT the best business opportunity in the next five years. In many ways, the company’s AI research institute will be an extension of its IoT product development unit.

“We mainly support the two major lines of products of the company,” says Dr. Yan. “One is smart devices, IoT. Another line is the livestream[ing].”

Dr. Yan’s team is improving the facial recognition features of Qihoo 360’s smart home security camera, “Small Water Droplet” (小水滴, our translation). For Qihoo 360’s livestreaming platform, Huajiao (花椒), the research institute will enhance face tracking features, such as beauty and face swapping filters. At the moment, fundamental research is not a priority, says Dr. Yan.

IoT and AI could generate new revenue streams for Qihoo 360, whose main source of revenue comes from advertising on platforms like 360 Search and 360 Mobile Assistant, Qihoo 360’s mobile app store. Last year, online advertising services accounted for 67.1% of the company’s total revenue. In contrast, revenue from smart hardware and IoT devices was about 3% of Qihoo 360’s 2015 revenue, 88% of which was cost.

Qihoo 360 will also face steep competition from more established players. Other domestic tech giants, such as Alibaba and Baidu, started investing in AI years ago, either through partnerships, such as Alibaba’s partnership with facial recognition company Face++, or their own proprietary research labs, such as Baidu’s Institute of Deep Learning.

As the new kid on the block, Qihoo 360 will not only have to boost AI capabilities of existing products to survive, but develop cutting edge applications of its own.

Disclaimer: Although Qihoo 360 provided no editorial control over this post, the company covered the travel expenses involved in interviewing Dr. Shuicheng Yan.

As tech giants like Baidu and Google refine the technology to make fully autonomous cars feasible, one important barrier still stands between research and mass production: affordability.

On Tuesday, Baidu and Ford announced a $150 million USD joint investment in Velodyne LiDAR, Inc., a Silicon Valley-based company that develops laser-based LiDAR (Light Imaging, Detection, and Ranging) sensors, which are used for mapping, localization, object identification, and collision avoidance. According to Velodyne, the latest round of funding will go towards cost-reduction and scaling the company’s technology.

“This investment will accelerate the cost reduction and scaling of Velodyne’s industry-leading LiDAR sensors, making them widely accessible and enabling mass deployment of fully autonomous vehicles,” stated David Hall, founder and CEO, Velodyne LiDAR, in a press release.

In LiDAR technology, lasers bounce light waves off nearby objects to measure their distance from sensors. It’s faster than radar, which uses radio waves. As a result, LiDAR sensors can collect more data and produce more detailed 3D maps of the sensor’s surroundings. In the context of autonomous cars, LiDAR sensors help cars ‘see’ the road.

Currently, Velodyne’s latest generation of sensor, the Velodyne Puck, costs about $8,000 USD. That’s cheap compared to older generations of Velodyne sensors, which cost more than $80,000 USD. In developing the Velodyne Puck, the company scaled down the number of lasers per sensor from 64 to 16, significantly lowering its cost. Still, the company’s sensors will have to become even cheaper in order to scale to the mass consumer market.

“Baidu is developing autonomous vehicles with the intention to increase passenger safety and reduce traffic congestion and pollution in China,” stated Jing Wang, Senior Vice President and General Manager of Autonomous Driving Unit of Baidu, in a press release.

“Our investment will accelerate our efforts in autonomous driving with what, in our view, are the best LiDAR sensors available today and advance Velodyne’s development of increasingly sophisticated LiDAR sensors,” he stated.

Baidu’s investment in Velodyne marks another milestone in the tech giant’s ambitions for its autonomous driving unit. Two months ago, Jing Wang announced Baidu’s plan to mass produce autonomous cars and have them on the road within the next five years. The Chinese tech giant also launched an autonomous car driving zone in the Anhui province earlier this year and signed an agreement with the Wuzhen Tourism Bureau in July to let tourists book Baidu self-driving cars.

Baidu is also expanding its R&D resources for its autonomous car technology. In April, the company announced the formation of a 100-person R&D team based in the Silicon Valley.

Image credit: Shutterstock

Tencent-backed Future Mobility Co. has officially joined the club of Chinese auto concepts with a production deadline of 2020.

The auto startup, which is also counts Foxconn and Chinese car dealer Harmony New Energy as investors, plans to sell highly automated, electric cars globally within the next four-and-a-half  years, the Wall Street Journal reported on Tuesday.

As a country of early adopters with an appetite for luxury vehicles, China has produced a number of electric, autonomous and connected car concepts, all hoping to reach production at an accelerated rate.

Baidu, China’s largest search engine, has committed to a 2018 release date for their autonomous concept, with a 2020 deadline for production and distribution. Likewise, LeEco, in partnership with Faraday Future, has set a similar 2020 deadline for their electric vehicle, claiming to have shortened the development stage by two years.

Future Mobility Co., which is just four months old, will close a funding round “soon,” according to CEO Carsten Breitfeld. He told the Wall Street Journal that the company is seeking to compete with major luxury car dealers Audi, Mercedes and BMW, which make up the lion’s share of China’s luxury vehicle market.

Mr. Breitfeld formerly worked on the development team for BMW’s i8 plug-in sports car.

Future Mobility Co. isn’t Tencent’s only bet in the autos industry. The social and gaming giant also invested in NextEV Inc., which has also attracted funding from Sequoia Capital and Joy Capital.

Alibaba has officially launched their first connected car in collaboration with Chinese automaker SAIC. It’s the fruit of a two-year long relationship backed by a joint investment of $160 million USD.

The RX5, a sport utility vehicle, is now available for pre-order through Tmall at 148,800 yuan ($22,000 USD), with the earliest models expected to ship in August, according to a blog post by the internet giant.

The car’s system is built on Alibaba’s on YunOS operating system, which has already been rolled out on other connected devices including smartphones and tablets.

Alibaba joins a slew of Chinese connected car projects that are seeking to dominate the realm of connected cars. Tencent, the social and gaming giant behind WeChat, released their own custom vehicle OS in September 2015, while LeEco released their auto operating system in January 2015. Like the aforementioned operating systems, Alibaba plans to open the platform to third-party developers.

“We believe in the future that 80 percent of the car’s functionality won’t be related to transportation,” said Alibaba CEO Jack Ma at a launch event in Hangzhou.

His comments echo LeEco CEO Jia Yueting who recently said he considers the car a “smart mobile device on four wheels.” Similarly, Baidu CEO Robin Li forecasted an “aggressive” spend on autos as “the next major computing platform,” during the company’s last earnings call.

According to Alibaba, the operating system will serve as a platform to connect the company’s existing e-commerce infrastructure, including Alipay. The car will also feature “360-degree detachable cameras for recording trips—and selfies.”

Just two months after Baidu announced the launch of a autonomous driving zone in China’s Anhui province, the search giant is now planning to test their cars on tourists in one of the country’s most popular travel destinations, according to state media.

Baidu is reportedly developing a deal with Wuzhen tourism Co., a travel agency in Wuzhen, which is famed for its quaint historic houses built atop a network of canals. The popular tourist destination is sometimes dubbed the ‘Venice of China.’

Wang Jin, the head of Baidu’s autonomous driving division, told Xinhua News that they are currently working with the local tourist agency to develop possible routes, as well as settling details including costs and the number of vehicles. The plan has not yet been finalized and a launch date has not been set, according to he report.

Baidu unveiled the autonomous car at the World Internet Conference in Wuzhen last year, before completing a series of tests on the outskirts of Beijing. In March the company announced they would soon begin testing the vehicles in the U.S., where they have a dedicated AI research base.

Wuzhen is approximately 100 kilometers southwest of Shanghai in Zhejiang province, which neighbors Anhui province, where Baidu announced an official testing ground for the autonomous cars in Wuhu city earlier this year. Baidu has said previously that they intend to launch a total of ten testing locations in China throughout 2016.

The company has said publicly that they intend to have their cars on the road within the next five years, in a challenge to U.S. tech giant Google, which is currently testing autonomous models on public roads.

Technode reached out to Baidu to confirm the details of the project and we will update with any further information.

The time has come for our annual TechCrunch Shanghai event, and it’s shaping up to be bigger than ever.

Join us from June 25th to the 29th at the West Bund Art Center for the Chinese tech industry’s top international conference, where we will bring together speakers from the country’s biggest tech companies and startups to discuss what the future of Chinese technology will look like.

TechCrunch China has made some impressive advances over the past three years. The event attracted over 3,000 attendees at TechCrunch Shanghai in 2013, rising to over 6,000 at TechCrunch Beijing in 2015.

In 2016, TechCrunch China is unstoppable as one of the top industry events in the Chinese tech ecosystem, and this year – for the first time, TechCrunch Shanghai will be held over five days.

On June 25th, hundreds of programmers, developers and business minds will join us to kick off the TechCrunch Shanghai Hackathon, a 24 hour intensive brainstorming event designed to bring out some of the best in Chinese tech innovation.

From the June 27th to the 28th, international entrepreneurs, VCs, startups and other industry professionals will take the stage for two days of cutting edge talks and panels covering the hottest topics in technology today, including internet finance and artificial intelligence. There will be also a sub-venue focusing on Fintech.

At the same time, TechCrunch Shanghai will feature a VC Meetup, giving attendees the chance to pitch product face-to-face with more than 100 of China’s top angel investors and venture capitalists. This year, TechNode will help more than 1,000 entrepreneurs talk to VCs through intensive ten minute sessions.

Some of the country’s best young startups will also have a chance to show off their product in our Startup Alley, with more than 250 startups expected to take the floor over two days. Our Alley startups, hailing from different regions and countries, will have a chance to present themselves to top-level domestic and foreign venture capitals and media.

On June 29th, TechCrunch China will hold our first-ever Asian virtual reality and augmented reality summit in collaboration with Formation Group, all the way from Silicon Valley. We’ll also invite industry-leading entrepreneurs and top Chinese device companies and content producers, including Oculus, HTC, Samsung, and NextVR. Participants will exhibit their latest products and discuss the hottest trends in VR and AR hardware, content, and capital.

At TechCrunch Shanghai 2016, you can expect to experience a range of Chinese innovation and entrepreneurialism with unprecedented scope at one incredible event, so join us from the 25th to the 29th of June to get a true glimpse of our future!

To sign up for TechCrunch 2016 Shanghai, please click here.

For Startup Alley booth registrations, please click here.

For further information on planning events with Technode, please email event@technode.com.

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Baidu has led a $300 million USD investment in one of China’s biggest auto trading and marketing platforms, BitAuto, revealed the search giant on Monday. It’s the latest company to join Baidu’s growing auto investment portfolio.

Baidu is joined by several previous investors in BitAuto, including internet services giant Tencent and e-commerce company JD.com. The three companies each purchased $50 million USD worth of newly issued shares from BitAuto at $20.23 each. BitAuto listed on the NYSE in November 2010.

The new round of funding comes as China’s burgeoning tech autos market undergoes a fresh round of new strategic partnerships between ride-hailing services, online service platforms, and autonomous and electric car projects.

Baidu, which is also a strategic investor in Uber, has been building up their deep learning and AI capabilities to support their autonomous vehicle project, tipped to be revealed in 2018. Tencent is a major investor in Uber’s top China rival, Didi Chuxing, which recently secured a $1 billion USD investment from Apple as part of a larger strategic fundraising effort.

Bitauto is also an investor in ride-hailing services. The company lead a $20 million USD B series in Didi chuxing competitor Dida Pinche, which in May 2015 raised a further $100 million USD from China Renaissance Capital Investment, TBP Capital and IDG Capital Partners among others.

Bitauto CFO Andy Zhang reportedly met with Uber CEO Travis Kalanick in March last year to discuss a possible partnership between Dida Pinche and Uber. While there has been no evidence that the two have since worked together, the Baidu’s strategic investment now puts them in the same investment family.

Bitauto, which predominantly serves as a trading platform for new and used vehicles, says they have already begun leveraging Tencent and JD.com’s respective strengths in social media, big data and e-commerce.

“Through our new partnership with Baidu, we expect to leverage its leadership in mobile and desktop online search, big data and transaction services platforms for additional strategic advantages,” said William Li, CEO and Chairman of Bitauto in a statement.

Josh Horwitz from Quartz joins us in a discussion on Apple’s recent decision to invest in China’s largest ride hailing app, Didi Chuxing and the implications for Uber in their plans to conquer China and the rest of the world. We move beyond the obvious reasons, such as managing their diplomatic relations with the Chinese government, and dive into Apple’s preparation for their entrance into China similar to other automotive makers. In this episode, Josh also takes us through the intricacies of the Chinese government’s regulations of the transportation industry. Last but not least, we also discuss the power players behind Didi and Grab and how traditional “old” money are boiling into technology startups in Asia.

Download MP3 (30.1 MB) or Subscribe via RSS

Analyse Asia with Bernard Leong is a weekly podcast dedicated to the pulse of technology, business & media in Asia. They interview thought leaders and leading industry players and gain their insights to how we perceive and understand the market. Analyse Asia is a content partner of TechNode.

TechNode does not endorse any commentary made in the program.

Notes:

• Josh Horwitz, Writer from Quartz
  • What interesting news has Josh been covering in Asia recently? [1:12]
    • Alibaba is buying not building its way into Southeast Asia
    • Netflix faces rivals in India and Southeast Asia that are better adapted to local realities.
    • A brief history of Chinese accounting shenanigans in America.
• The On-Demand Transportation Wars [2:09]
  • Since our last conversation, what’s the status of the industry’s dominant players? (Uber, Didi, Ola and Grab/Go-Jek) [2:28]
  • Grab and Go-Jek founders share a common story [3:30]
  • Uber vs Google Waze: What happened when self-driving cars met on-demand transportation? [4:38]
• Apple’s US$1B investment into Didi and Didi vs. Uber in China [8:34]
  • Why did the deal happen? What are the possible reasons? [8:58]
  • Is Apple’s investment in Didi really an investment into its own future?
    • Does Didi need Apple? [13:22]
      • A symbolic appeasement with the Chinese government or a way to buy “guanxi”?
    • The Chinese government has regulated the automotive industry since the 1980s and places strict restrictions on automotive OEMs with a 50:50 joint venture.  [15:30]
    • Example of 50:50 joint ventures in China’s automotive industries: car companies with state owned enterprises in China. For example, Ford has a joint venture with Changan [17:00]
    • How Apple plans to enter China by leveraging a partnership
      • What does Apple gain from investing in Didi? Counter example: Tesla is facing problems in China without a partner to sell their electric cars. [19:11]
    • Didi used a varied interest company (VIE) business structure similar to Alibaba – how does that affect its partnership with Apple? [20:00]
    • What does this mean for Uber in the online transportation wars? [24:20]
    • The power players behind Didi vs. Uber and Grab [27:14]
      • Didi: Who is Jean Liu who did the deal with Tim Cook from Apple and Wei Zheng, founder and CEO of Didi? (she’s the daughter of the Lenovo founder, Liu Chuanzhi).
      • Uber China: Liu Zhen, director of strategy, is Jean Liu’s cousin.
      • Grab’s Anthony Tan is the grandson of the founder of Tan Chong Motors, which owns the exclusive distribution to Nissan, a Japanese automotive company.
      • Jerry Yang is an adviser to Uber and did the deal with Alibaba when he was the CEO of Yahoo! [28:50]
    • Uber and leasing out cars and controlling the supply chain [29:51]
      • Is Grab doing the same thing as Uber in controlling the supply chain with their competitive advantage with Nissan through Tan Chong Motors?

Sameer Singh from Tech-thoughts.net analyzed the recent Apple Q1 2016 earning and challenged the notion whether Apple’s Asia (India and China) and their rumored car strategy will bring them back to growth. Through the lens of the Apple’s rumored car strategy, we dove deeper into a conversation on artificial intelligence and autonomous vehicles from the China to the U.S.

Download MP3 (32.6 MB) or Subscribe via RSS

Analyse Asia with Bernard Leong is a weekly podcast dedicated to the pulse of technology, business & media in Asia. They interview thought leaders and leading industry players and gain their insights to how we perceive and understand the market. Analyse Asia is a content partner of TechNode.

TechNode does not endorse any commentary made in the program.

Notes:

• Sameer Singh
• Apple’s iPhone Blip and will their Asia strategy with China and India work?
  • Apple’s recent Q1 2016 earnings: What happened? [1:47]
  • How did the Apple miss the forecast of the iPhone earnings? [3:00]
  • Apple’s upgrade cycle is not a cause but an effect. [4:11]
  • Has the switch from Android back to Apple during the iPhone 6 been saturated? [5:25]
  • Is iPhone SE the solution to push up the upgrades? Is Apple using screen size as a way to price their ASP in the Asia context? [6:10]
  • Has the smartphone industry reached a structural change when the technology is now good enough? [8:30]
  • iPhone 6 cycle depressed the entire Android premium phone industry and allows Samsung to return to profitability with the Galaxy S7. [9:40]
  • What does that mean for Apple in the next iPhone 7 iteration? [10:33]
  • Apple’s “services” narrative will not work in Asia. [11:15]
  • Apple watch as a trojan horse with the watch bands rather than the watch. Taiwanese (happened to be in Asia) Apple analyst Ming Chi Kuo predicts Apple watch sales will fall in 2016.  [13:00]
  • Is Apple’s expansion to India (with their current focus to China) going to save them? [14:48] Note that China has just banned Apple movie and books services.
  • Can Apple’s rumored car restore their growth? [17:50]
• Self Driving Cars, Business Models & Regulation [18:25]
  • The best autonomous cars has to be electric. [18:50]
  • The different models for autonomous and electric vehicles [19:30]
    • On demand transportation which destroys car ownership: Uber, Lyft (and their recent deal with General Motors).
    • Internet services model with web and mobile: Baidu, Google using maps and search linking it with cars.
    • Car OEMs and hardware makers: Tesla, Apple, and car makers such as Toyota, Nissan, VW Group, Audi, BMW.
  • What is the path forward for self driving cars? Full Autonomy vs Incrementalism [20:18]
  • Asia governments testing the concept of self driving car zones. [22:17]
  • Self driving cars are more focused on creating fixed and optimized routes rather than creating complexity to transportation. [23:40]
  • Google’s self driving car and potential ride sharing service. [24:30]
  • AI and self driving cars. [26:23]
  • When a car turns into a computer, how much semiconductors does OEM need? [28:10]
  • Tesla’s hybrid model OEM and services with their supercharging stations. [28:48]
  • China’s foray into electric cars, and the launch of LeSee, with the same backer to the Faraday car.  [29:20]
  • Tesla’s model 3’s successful crowdfunding campaign and what does it mean for the automotive industry in the next few years? [30:00] (Tesla sees 300K orders upon crowdfunding).
  • Uber submits 800 COEs bids in Singapore, changing the game for cars. What does that mean for countries viewing car ownership as a prestige? [33:15]

Sameer Singh from Tech-thoughts.net joined us to reflect on major themes that have been ongoing in the technology space from messaging apps to self-driving cars. In the first part, we discussed Facebook’s recent F8 announcements on their new chatbots platform and video livestreaming. From there, we analyzed the implications of Facebook’s announcements and examined how it will impact Asia from video advertising to messaging apps, thus foreshadowing an upcoming showdown between Asian messaging apps, such as WeChat and LINE. Finally, we dissected the different business models behind artificial intelligence companies and how they will play a role in the technology space from the US to Asia.

Download MP3 (25.2 MB) or Subscribe via RSS

Analyse Asia with Bernard Leong is a weekly podcast dedicated to the pulse of technology, business & media in Asia. They interview thought leaders and leading industry players and gain their insights to how we perceive and understand the market. Analyse Asia is a content partner of TechNode.

TechNode does not endorse any commentary made in the program.

Notes:

• Sameer Singh from Tech-thoughts.net [1:10]
• Facebook F8 Announcements and its impact to Asia [1:31]
  • What are the major themes from recent Facebook F8 announcements? [1:41]
    • Video Livestreaming
    • Chatbots
  • Does the F8 announcements impact the company from the near term, middle term or far in the future? [3:07]
  • What are chat bots and how do they work? [3:29]
  • Conversational UI vs Asia Messaging Apps in Asia: WeChat, LINE and Kakao Talk. [4:25]
    • How are they distinguished from apps on mobile? [4:30]
    • Wechat Official Accounts and how it distinguish from Facebook’s conversation UI [6:10]
    • Why did Facebook adopt conversational UI instead of adopting Wechat’s platform approach? [7:15]
    • Watson from IBM as an example of chatbot on banking sites in Asia [7:50]
  • What’s the path to victory for chat bots and apps? [10:30]
  • Why do Facebook use chatbots where the UI is not working in the emerging markets? [12:00]
  • Messaging app as a platform vs conversational B2C communication. [13:50]
  • The weakness of Asia messaging apps with artificial intelligence. [16:22]
  • What is Facebook is doing in video and live streaming? [16:45]
    • Facebook Videos: Live Fast, Die Young (Source: TheInformation)
    • Implications to Facebook livestreaming to video advertising and virtual reality. [21:50]
• Artificial Intelligence [22:52]
  • Artificial intelligence are entering into devices and products, for example, iPhone – Siri, Echo – Alexa, Google – Google Now, Baidu.
  • How does business leverage AI as part of their business model? [23:32]

LeEco CEO Jia Yueting took aim at traditional car manufacturers and U.S. tech companies, claiming they were “outdated.”

The company is currently seeking to condense five years of car development into three to release an Aston Martin electric supercar by 2018.

In the meantime LeEco launched the ‘LeSEE’ electric car concept last week. The company aims to eventually sell vehicles that cost less than Tesla, generating revenue primarily through LeEco’s connected car ecosystem.

Related: LeEco CEO Jia Yueting Takes Aim At “Outdated” Car Manufacturers, US Tech Giants

Related: We’re Shortening Development By Two Years: LeAutoLink CTO On LeEco, Aston Martin Super Car [Q&A]

Baidu earned a neat three percent bump in stock prices on Thursday after they recorder higher-than-expected revenues. One project that they’ll be spending the cash on is their driverless car unit, a research and development effort spanning between the U.S. and China.

“We believe that the automobile is the next major computing platform,” said CEO Robin Li during a call with analysts, forecasting an “aggressive” spend on the project.

Mr Li’s comments come just a few days after LeEco CEO Jia Yueting said that he considers the car “a smart mobile device on four wheels.”

Like Baidu, LeEco has invested heavily in their auto projects, which involve electric and self driving concepts as well as their connected car ecosystem.

The two also share another interesting feature: deadlines. LeEco has committed to releasing their Aston Martin electric sports car by 2018, while their strategic partner Faraday Future aims to have autonomous electric vehicles on sale by 2020.

Similarly, Baidu has set a 2018 release date for their autonomous concept, and a 2020 production deadline.

Shoot First, Monetize Later: The Battle To Own The Smartphone On Wheels

The ‘shoot-first, monetize later’ model has become a feature of Baidu’s expansion beyond their core search business.

The company is also embroiled in an cash-burning war over the O2O space with competitors Alibaba and Tencent. The search giant doubled down on investment in the area, including a $3 billion USD commitment to their group-buying site Nuomi. The company is now applying the same tactics to their autonomous driving unit.

“We are aggressively beefing up research and development in this area both here in China and our U.S. R&D center in Silicon Valley,” said CEO Robin Li in a post-earnings conference call. “We will worry about the business model later on.”

LeEco CEO Jia Yueting has also brushed off concerns about his company’s potential to make good on their massive valuation, as they continue to welcome new funding.

Mr. Jia claims LeEco’s electric cars will retail for less than Tesla rivals, but will profit from the connected ecosystem, drawing close parallels with smartphones. He has even gone as far as to suggest that the cars themselves could ultimately be free.

LeEco and Baidu join a raft of other Chinese entrants looking to capitalize on cars as a computing platform, similar to smartphones. Tencent-backed Next EV is planning to release an electric vehicle concept that is half the price of a Tesla by 2017.

Chinese search engine Baidu Inc. announced on Friday the formation of a team in Silicon Valley focused on R&D for autonomous cars. The team will be part of Baidu’s newly-created Autonomous Driving Unit (ADU).

With the announcement, Silicon Valley becomes Baidu’s home turf for both their self-driving car team and Baidu Research’s Silicon Valley AI Lab (SVAIL). Baidu has been working on self-driving cars since 2013, and aims to have them on the roads by 2018.

“Baidu is fully committed to making self-driving cars a reality,” said Jing Wang, SVP of Baidu and General Manager of Baidu’s Autonomous Driving Unit in a statement. “Autonomous vehicles will save lives and make transportation more efficient. Baidu’s Silicon Valley car team will play a significant role in building the car of the future.”

The newly-created Autonomous Driving Unit will add over 100 researchers in the next year, according to a release from the company.

Baidu wants the autonomous car to be like a ‘human driver’, said Baidu’s chief scientist Andrew Ng, stressing the importance of the company’s AI developments.

Baidu’s self-driving cars will be tested on roads in the United States as early as next month. In China, Baidu already has government support from a number of local Chinese governments, who are working with the company on autonomous bus routes. The company has also tested the autonomous BMW 3-series cars extensively on Beijing roadways.

LeEco is also looking to crack the autonomous vehicle industry with Silicon Valley research facilities. The company has their own driverless car unit, and are looking to develop super cars with Silicon Valley’s Faraday Future, the so-called ‘Tesla killer’. Chinese carmaker Great Wall Motors also opened a research center in Silicon Valley.

Image Credit: TechNode

LeEco’s auto projects are extremely ambitious. The company hopes to squeeze five years of vehicle development into three to release their electric Aston Martin super car by 2018, at the same time they are racing to release their own consumer vehicles with a view to surpass Tesla.

They are goals that CEO Jia Yueting isn’t afraid to rub in the face of his competitors.

In an interview with CNBC, Jia Yueting said traditional car companies, like BMW and Mercedes Benz, “cannot fundamentally change themselves” to meet the requirements of the modern auto industry.

He also singled out Apple, calling their ecosystem of individual apps “outdated”, and pointed to the company’s faltering sales in China.

“Having separate apps just means great obstacles in the user experience. We hope to break down these obstacles,” said Mr. Jia.

LeEco, formerly known as LeTV, is often compared to Netflix in western media, though the company has expanded heavily into other internet-enabled verticals, including electric and connected cars. Mr Jia said that LeEco’s current model is the “ultimate combination of Tesla, Uber, Apple, Amazon and Netflix.”

Mr Jia’s comparison did not stretch to involve Google, who are leading US developments in autonomous driving technology. Last month the CTO of Autolink, LeEco’s auto ecosystem project, told Technode that the company is “working closely” with Google, and have been invited to trial their technology.

When asked about LeEco’s hearty appetite for funding in the pursuit of their auto projects, Mr. Jia said he was confident that their autos ecosystem would reap dividends for those “visionary” enough to invest in it. He also said that the capabilities of LeEco cars would exceed  Tesla rivals, but would remain a cheaper alternative, monetizing through the resources gathered from their internet ecosystem.

Mr Jia’s comments follow last week’s public unveiling of the LeEco LeSEE, their highly-anticipated electric sedan. The company said the car was built with autonomous technology in mind. The company’s other flagship project, an electric supercar being developed with Aston Martin, is slated for release in 2018. LeEco is working closely with Faraday Future, the secretive electric vehicle company in which Mr. Jia is a personal investor.

Related: We’re Shortening Development By Two Years: LeAutoLink CTO On LeEco, Aston Martin Super Car [Q&A]

Speculation over the LeEco-backed Aston Martin electric super car has been building since the two companies announced in January their intention to release the vehicle by 2018.

While the US has led the development of connected, autonomous and electric vehicles, China is playing a hasty catchup game, backed by the country’s cashed-up tech giants.

According to Rao Hong, the CTO of LeAutoLink, part of LeEco’s Super Electric Ecosystem (SEE) Plan, development on the super car has been shortened from a five-year project to a three year project, with an indirect partnership from electric vehicle startup Faraday Future.

Technode sat down with LeAutoLink CTO Rao Hong to discuss what’s next for the LeEco car project from the software side:

What’s the current progress on the Le Super Car?

The typical car development cycle is about 4-5 years, and are trying to shorten the development cycle, our estimation is about 3 years. We are going to have some announcements next month at the Beijing auto show but that’s still [the] very early stage of the prototyping.

What are the different roles being played by Aston Martin and Faraday Future?

Aston Martin is a traditional car manufacturer and Faraday Future is a new startup company building electric cars, so its fits our overall strategy. Our partnership with Aston Martin is to bring in the internet of vehicle technology, autonomous drive technology as well as electrical power systems and transmission systems. 

[Faraday] are new, they have leadership coming from Tesla so they know how to build electric cars. We are helping with the internet of vehicle aspect and we also work with them on autonomous driving . This is the beauty of [the partnerships]. We can look at it from the traditional car industry, and from the internet technology perspective. 

You do R&D in the US while LeEco and Faraday are China-funded. How difficult is it working cross-culturally on such a complex project?

Internally there is still a lot of fighting from cultural and background perspectives. We have people from the car industry saying we should go one way and the internet people saying another way, but it’s part of the challenge, a challenge comes up and then we can work on something new. The process is challenging but it helps us understand different cultures and backgrounds. The good thing is we all have the same goal: we want to change the car.

We have people locally in the US, and we try to let them manage themselves, we are just here to facilitate their activities…It’s their area of expertise, so they go ahead, we just ask what they need. When it comes to the internet and autonomous driving, both sides have to collaborate. There will be a lot of arguing and fighting [Laughs].

How do you see Chinese electric vehicles, autonomous cars and connected cars against US prototypes being built by companies like Alphabet [Google]?

We work closely with Google, they’ve invited us to see their demo system. The industry is at the dawn of change, [in regards to] people, the car industry and the IT industry. It’s a big industry compared with some other LeEco industries.

We have a strong presence in China… Google apparently they are leading in autonomous driving, they have very good maps in the US, but not that good in China, they have some government issues. Our goal is to deploy cars globally. China is the biggest market for the car. We believe we have the advantage. China and the US are the two biggest markets. They are together probably one third of the global car market.

Will China be able to play catch up?

China is picking up, we believe that in the near future we will be a lot better than we are today. China has always played a catchup role, but when it comes to electric cars the advantage the traditional car companies have is not that big, electric cars in China are already leading in some ways…we are also in a good position when it comes to telecommunications.

LeAutoLink already collaborates with Aston Martin, BYD and Faraday Future, what sort of partnerships are you looking to forge in the future?

A lot. [We are] talking with a quite a few companies, our goal is not just to be in connected cars, we want to build the internet of cars ecosystem. So we are talking with pretty much everybody. We are still very young as a startup company, trying to figure out how and when to collaborate.

See Related: LeEco, Aston Martin To Release Electric Vehicle By 2018

Image Credit: Technode

Here in Asia, we’re the first to see the sun rise. We’re the continent with the most people and some of the oldest civilizations in human history.

We’re also home to some of the most innovative hardware startups in the world. From “Startup Nation” Israel to high-tech Japan, Asia is a hotspot for exciting hardware, and it’s about time we had our own hardware competition.

At TechNode, we’re delighted to invite you to this year’s Asia Hardware Battle in Chengdu, where the top 15 hardware startups in Asia will present their products.

Most people know Silicon Valley as the heart of technological innovation, but what most don’t know is how more and more Valley tech giants are buying up technology from Asia. For example, in 2015, Apple acquired Israeli imaging company LinX and their 3D scanning technology, PrimeSense. The year before that, Google acquired an information security company called SlickLogin, also from the “Startup Nation.”

China is starting to see innovative hardware across all verticals: wearables, virtual reality, smart transportation, artificial intelligence, and more. And despite headlines of a winter in the Chinese economy, various tech industries in China are continuing to receive generous financing.

In the virtual reality industry, Noitom Ltd., a motion capture solution provider, and ANTVR, a VR hardware company, received $20 million USD and $300 million RMB in rounds of Series B funding, respectively.

China’s artificial intelligence industry got a nod from Google last October when the tech giant invested $75 million USD in Mobvoi, a speech recognition and natural language processing startup based in Beijing.

China’s UAV industry was especially well endowed with financing in 2015, as DJI, YUNEEC, and EHang all received millions of dollars in funding. Guangzhou-based startup Ehang also wowed everyone at this year’s CES in Las Vegas with their autonomous helicopter drone. Of course, investment money is just the start – what hardware startups do with it will determine their future.

If you’re an early stage, pre-Series A funded startup with an exciting product, we’d love to have you at this year’s Asia Hardware Battle. Not only will you meet hardware startups from all over Asia, you’ll also have the chance to meet investors from top-tier VC firms, like Sequoia Capital, Silicon Valley Bank, GGV Capital, and others.

Online applications are open until the end of February. We look forward to seeing you in Chengdu!

Asia Hardware Battle Timeline

1. Applications accepted: January 11th – End of February
2. Application screening period: March 1st – 5th
3. Finalist preparation period: March 6th – 30th
4. Final Presentation in Chengdu: March 31st

(Note: Due to visa processing, the timelines for Chinese startups and overseas startups are different)

Qualifications

1. Must be a hardware startup in Asia (see accepted regions below)
2. Must be early stage, pre-Series A funding
3. Must have released a prototype already

Regions

• Mainland China
• Japan
• South Korea
• Singapore
• India
• Israel
• Taiwan
• Hong Kong

What We’re Looking For

• Disruptive companies with innovative technology
• Companies that haven’t had a lot of media exposure yet

Rewards and Perks

• Tickets for our “VC Meetup” (50 top tier VC firms )
• A chance to attend 2016 ChinaBang Awards
• 15 Finalists have a chance to present on the main stage
• 15 Finalists will receive tickets to the 2016 ChinaBang Awards
• 15 Finalists will receive a roundtrip plane ticket to Chengdu and
  hotel lodging for 3 days
• 15 Finalists will receive feedback from a distinguished panel of judges
• Media coverage
• ….and more!

Click HERE to apply!

A 30-kilometer route along Beijing’s northern outskirts has become the testing ground for China’s first fully autonomous car.

Chinese search giant Baidu revealed today that they have completed a series of driving tests in the city, as the company seeks to launch an individual business unit dedicated to developing China’s first commercially-available autonomous cars.

In June, Baidu revealed they would would partner with BMW in a bid to release the concept car by the end of 2015.

The modified BMW 3 series completed comprehensive tests on the 30-kilometer route from Baidu’s headquarters in the northwest Beijing, continuing through the outskirts of the city. According to the company the car was able to make u-turns, change lanes, overtake other vehicles and merge on and off highway ramps.

Until now the autonomous driving project has been run by Baidu’s Institute of Deep Learning. The company will soon launch the Autonomous Driving Business Unit, headed by senior vice president Wang Jing.

“Fully autonomous driving under mixed road conditions is universally challenging,” said Mr. Wang. “With complexity further heightened by Beijing’s road conditions and unpredictable driver behavior.”

In an interview with the Wall Street Journal Mr. Wang also revealed that Baidu will launch a shuttle service made up of autonomous vans or cars that would be available for shared public use in designated urban areas. The company has not yet set time frame for when the vehicles will be commercially available.

Baidu’s ‘AutoBrain’ highly automated driving (HAD) technology has been under development since 2013, and has the ability to “record 3D road data to within a few centimeters of accuracy of vehicle positioning.” The company expects a majority of China’s roadways to be mapped with the technology by 2025.

Google’s autonomous driving project, founded in 2009, is now in advanced development stages. The company is currently employing their deep-learning technology to mimic more advanced human-like maneuvers including cutting corners and crossing double lines.

This September Chinese vehicle manufacturer Yutong Bus Co. revealed a prototype self-driving bus. The company claimed the bus completed a 33-kilometer test drive including lane changes, 26 traffic signals and a passing maneuver.

Baidu’s contemporary tech giants have taken different routes, choosing to invest instead in electric and smart car technology. In March Alibaba revealed a $160 million USD fund to develop internet-enabled cars with China’s largest automaker SAIC Group.

Tencent  joined forces with Shanghai-based electric car maker Next EV to build an electric supercar with an expected release date in 2016. LeTV revealed a partnership with Aston Martin this year, and has committed to releasing their first electric sports car in April 2016.

Related: Four Hi-Tech Car Concepts From Chinese Internet Companies You’ll See Within A Year

While the Internet Of Things frenzy is in full swing in China, local tech giants are expanding their interests in connecting cars.

Chinese internet giant Tencent unveiled its internet-of-vehicle (IoV) open platform Tencent Automotive Services yesterday with the launch of an IoV ROM, an IoV app as well as API MyCar.

Powered by the Android system, the new IoV ROM sports multiple smartphone-like capabilities, such as navigation, instant messaging, news, security services and weather applications. Tencent Map and Didi Chuxing provide navigation data to the system. Its WeChat and QQ integration allow speech input and real-time location sharing. The system, which is still under trial, is now compatible with some Volkswagen cars.

The IoV app is mainly designed for in-vehicle systems without internet access. After connecting your smartphone and car through USB or WiFi, users can browse all the information on Tencent’s infotainment platform via the on-board system. The app supports the connectivity protocol of Apple’s CarPlay and Android Auto, and a full range of car brands including Ford, BMW, and Mercedes.

MyCar enables car owners to monitor your vehicle on smartphone, share music and locations, and check car conditions.

The company emphasized that Tencent Automotive Service is an open platform providing a standardized access for segmented automotive systems by using its rich resources in content, social networking and security.

Tencent has been quite active in IoV sector since last year with the launch of IoV plug-and-play gadget Lubao Box and investment in mapping company NavInfo. Tencent-NavInfo cooperation also brought up WeDrive, a comprehensive IoV solution.

Researchers have released quite promising projections for China’s IoV potential, expecting the whole market size to hit 150 billion RMB ($23.55 billion USD) by 2015. It is estimated that 90% of the automobiles will have wireless-internet connectivity as of the end of 2020, a sign indicating that car will become another internet access point after the smartphone.

Along with the growth of China’s IoV dynamics, Chinese internet companies have started to explore the booming sector. Baidu launched an infotainment platform CarLife at the beginning of this year. Alibaba’s partnership with automaker SAIC Motor Corp gives its homegrown system YUN OS wider application to cars in line with the company’s attempt to expand beyond their e-commerce business. Chinese video company LeTV also released a custom OS for the company’s electric car project unveiled last year.

Image credit: Sohu Tech

It has been a popular year for Chinese companies announcing plans to develop electric vehicles, and the spree has continues.

Chinese state-owned automaker BAIC Motor Corp, announced an R&D centre in Silicon Valley yesterday. They also revealed that they have taken on a majority stake of California-based electric car maker Atieva, and will begin developing electric cars, and later, self-driving cars.

Atieva was co-founded in 2007 by former Tesla executive Bernard Tse. The company is based in Silicon Valley’s Menlo Park. BAIC’s new research and development operations will be run at a separate centre that is currently employing 20 staff.

BAIC is planning to up its production to 200,000 electric cars by 2020, hoping to export 30% of them outside China.

Earlier this week we reported on four high tech car concepts from Chinese internet companies that we can expect to see within a year. Among them was the Tencent-backed NextEV electric supercar and the LeTV Aston Martin electric sports car.

Both NextEV and the LeTV electric car teams have research teams also based in Silicon Valley. LeTV said this year that it would be releasing its first concept car in April 2016 at the Shanghai Auto Show, while NextEV, who announced their Tencent investment just last week, remain tight lipped on a release date, but have committed to a 2016 concept launch.

The electric vehicle market in China is attracting a lot of attention from high profile tech and auto investors, with the Chinese-backed electric vehicle concepts looking to challenge Tesla both globally and in China.

It’s been a rough year for Tesla’s China-side team, with reports claiming that the U.S. company had laid off 30% of its staff on the mainland in reaction to slowing sales.

Last month the company urged the U.S. government to put pressure on China during Xi Jinping’s upcoming visit, hoping to lift restriction of foreign automakers.

Currently Tesla is not able to manufacture in China without establishing a Chinese joint venture. The Chinese government has been openly supportive of developments in the electric vehicle field, but has not budged on laws restricting foreign companies.

@CateCadell

Image Credit: Shutterstock

It’s the year of four wheels for China’s internet giants, and the country’s tech companies are racing to get their concepts ready by 2016. Cars in the connected, remote and electric fields are under development right now with a focus on high-profile foreign partnerships.

Hi-tech cars have been the domain of western progressive tech companies in the past, including Tesla, Apple and Google, but with R&D at an all time high among China’s tech companies, many are taking the opportunity to extend past traditional fields.

The government has also become a backer of hi-tech car solutions recently, amending rules to allow non-automotive companies to invest in car projects. Here are some of the latest hi-tech car concepts to come out of China’s internet powerhouses.

1. Tencent Partners With NextEV To Build Electric Super Car

Concept: Electric Super Car

Release Date: 2016

What can produce over 1,000 horsepower and accelerate 0 to 100 kilometers (62 miles) in less than 3 seconds?  Tencent’s latest partnership with Shanghai-based electric car maker NextEV.

While it’s not Tencent’s first foray into the car industry, their latest partnership with NextEV is snagging a lot of attention. NextEV is a company working on electric cars, and is considered on of the prime competitors to Tesla in the region. Tencent and Uber-backer Hillhouse Capital put up and undisclosed amount to take NextEV global, according to a NextEV spokesperson.

The first model that will be launched under the partnership will be an electric supercar. While it’s not exactly a consumer-ready concept, it aims to show its muscle in the industry by outperforming combustion engines in the same class. A spokesperson told Reuters that the car would produce over 1,000 horsepower and have the ability to accelerate to 100 kilometers within 3 seconds, making it competitive in its range.

NextEV’s deep-pocketed investors helped secure former Ford Motors Executive Martin leach to head the effort, which is expected to see a first release in 2016.

In March this year, Tencent had partnered with Foxconn  and top Chinese luxury auto dealer China Harmony Auto Holding to begin exploring the electric car industry.

2. Baidu’s BMW Autonomous Car

Concept: Semi-Autonomous Car

Release Date: Late 2015

Chinese search engine giant Baidu inked a partnership with BMW to release an autonomous car, potentially before the end of 2015. The two companies revealed they were working on the project together in April 2014, but had kept things under wraps until the announcement this June that the car would see daylight before the end of the year.

Frequently compared to Google, Baidu lived up to its name, looking to beat the U.S. search giant to market with its autonomous car. Unlike Google’s effort however, the Baidu car will not be fully autonomous according to reports, instead it is going to employ a driver assisted system.

3. LeTV’s Aston Martin Electric Car Concept

Concept: Electric Sports Car

Release Date: April 2016

While they don’t exactly rub shoulders with Baidu, Alibaba or Tencent, LeTV is a budding internet giant in its own right. The company, which began as an internet video streaming service, has since extended its reach into smartphones, releasing a series of controversial ads to challenge Apple in the Chinese market.

They are now expanding into electric Sports Cars too, joining forces to create a concept car with the James Bond of British Car Brands; Aston Martin. The company released a series of concept drawings at this year’s Shanghai Auto Show, depicting a very sleek concept with many of the Aston Martin design features. Aston Martin and LeTV have been reportedly working together on the electric car at an R&D centre set up in Silicon Valley.

In January, LeTV released a custom OS for electric and connected cars, which is expected to feature in the upcoming design. They are expected to release the car at the same show in April 2016.

4. Alibaba’s Internet Connected Cars

Concept: Connected Cars

Release Date: 2016

In March this year Chinese tech giant Alibaba revealed that it had made a $160 million USD investment in partnership with China’s largest automaker group SAIC group to create a fund aimed at developing internet-enabled cars. Unlike others in the field, Alibaba and SAIC have remained tight lipped on their upcoming projects, giving almost nothing away since the initial announcement.

According to an announcement on SAIC’s website, we can expect to see the first project released in 2016. Besides funding, Alibaba is expected to contribute the cloud computing technology, digital entertainment, maps and financial data.

@CateCadell

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Image Credit: Shutterstock, NextEV, LeTV