No results found. Please try again.

THIS MATERIAL IS A MARKETING COMMUNICATION.

China Autonomous Driving Industry Review

China Autonomous Driving Industry Review

China’s autonomous driving industry saw unprecedented growth in 2021, with over $8.5 billion invested in Robotaxi start-ups, self-driving truck developers, LIDAR (Light Detection and Ranging) makers, smart electric car manufacturers, and chipmakers focused on vehicle automation.1 We see three camps of players, including electric vehicle (EV) start-ups, autonomous driving start-ups with an algorithm approach, and tech companies like Huawei and Baidu, competing head to head. This article provides an update on the development progress of these companies.

Auto OEM –EV Start-ups determined to develop autonomous driving capabilities in-house

EV start-ups are the most aggressive among domestic auto original equipment manufacturers (OEMs) to build up self-driving capabilities. We see a clear product roadmap with L4-ready hardware to be launched over the next two years.2 The advantage of this aggressive roadmap is the ability to collect and label more data with well-equipped vehicles on the road. EV start-ups are currently working with 2-3 self-driving chip providers in parallel and meanwhile hiring software engineers to develop in-house algorithms. XPeng, Nio and Li Auto are all moving away from the Intel Mobileye platform as the closed ecosystem leave auto OEM with little room to develop in-house software capabilities.

It is difficult to pick a winner at present due to the lack of quantitative data on autonomous driving software performance, homogeneity in core hardware supply and no deployment of L4/L5 autonomous driving software.

XPeng: The Company is committed to full-stack in-house autonomous driving capabilities. Currently, it adopts NVIDIA Xavier to power its XPilot 3.0/3.5, while XPilot 4.0 (XPeng G9 model) will carry Nvidia Drive Orin platform. 3

Nio: Its ET7 will be the first model from an EV start-up carrying Nvidia Orin.4

Li Auto: The Company launched the 2021 Li ONE with Horizon Robotics J3 chips. Its next platform will be powered by NVIDIA Orin on the flagship SUV X01 to be launched in 2H22. 5

Autonomous Driving Start-ups

Compared to EV companies like Tesla and its Chinese peers, pure autonomous driving start-ups might see themselves in a less advantageous position for data collection as they do not have that many cars running on the road which can constantly provide data points to enhance autonomous driving algorithms. As a result, autonomous driving companies rely heavily on road testing and Robotaxi service, in which case they generally collaborate with OEMs. However, with a corporate culture of entrepreneurship and autonomy, autonomous driving start-ups attract a large talent pool of software developers with strong academic backgrounds which is accelerating technology enhancement at an unprecedented speed.

Coupled with support from private-round investors and the Chinese government, autonomous driving start-ups have been expanding quickly. In February 2021, Pony.ai's first Robotaxi with the latest system rolled off its standard production line, followed by an upgrade to PonyPliot+ Robotaxi service in all aspects two months later. In May, the Robotaxi service landed in Yizhuang District, Beijing.6

Although the whole autonomous driving industry still faces a range of challenges such as immature supply chain, high costs for perception tools like LIDAR, unsound laws and regulations, as well as persisting concerns on safety issues and boundaries for individual party’s responsibility, L4 autonomous driving technology is quickly evolving while the overall cost is dropping, making the commercial use in designated scenarios an expectation in the medium-term.

Tech Companies

Huawei has shifted to focus on smart car development due to stagnant growth of its consumer business. We believe it can become a formidable competitor because 1) ICT (information and communications technology) infrastructure sets the groundwork for connectivity; 2) self-developed Harmony Operating System can strike a balance between stability, security, and ecosystem; 3) Huawei owns full-stack, all-scenario AI portfolio that gains increasing attraction from developers; and 4) Huawei can offer a wide range of sensors given its engineering power.

Currently, Huawei collaborates with several OEMs in smart cars. The cooperation model between Huawei and OEMs has evolved from supplies of LTE V2X (Long-Term Evolution vehicle to everything) solution, TBOX, and other existing products to provisions of underlying platforms/solutions and co-development of smart cars.

With its well-rounded capabilities, we will not be surprised if Huawei launches its autonomous cars in the future, similar to Apple which is reportedly to mass-produce electric vehicles with its own self-driving technology as early as 2025.7

For Baidu, the company introduced Apollo Moon in June, 2021, which is the 5th generation of Apollo Go Robotaxi vehicles with another 60% drop in cost per mile compared to an average decrease of 62% in the first four generations of Apollo Robotaxi vehicles.8 According to management, the overall cost of Apollo Moon, including vehicle assembly and autonomous driving kits, is RMB480k, or RMB8k monthly amortized costs if assuming five years' amortization, which is already within the operating cost range for ride-hailing.9 The company expects to have a full-scale autonomous ride-hailing operation by 2025.10

Staying Ahead with Mirae Asset’s Latest Insights

Mirae Asset Global Investments adheres to a strictPrivacy Policygoverning the handling of your information and subscribers can opt-out per their preference.

1. TechCrunch, February, 2022

2. Mirae Asset, 2022

3. XPeng, 2021

4. Nio, 2022

5. Li Auto, 2021

6. Pony AI, 2021

7. Bloomberg, 2021

8. 2021 Baidu World Event, August 2021

9. 2021 Baidu World Event, August 2021

10. 2021 Baidu World Event, August 2021


Disclaimer & Information for Investors

No distribution, solicitation or advice: This document is provided for information and illustrative purposes and is intended for your use only.  It is not a solicitation, offer or recommendation to buy or sell any security or other financial instrument. The information contained in this document has been provided as a general market commentary only and does not constitute any form of regulated financial advice, legal, tax or other regulated service.

The views and information discussed or referred in this document are as of the date of publication. Certain of the statements contained in this document are statements of future expectations and other forward-looking statements.  Views, opinions and estimates may change without notice and are based on a number of assumptions which may or may not eventuate or prove to be accurate. Actual results, performance or events may differ materially from those in such statements. In addition, the opinions expressed may differ from those of other Mirae Asset Global Investments’ investment professionals.

Investment involves risk: Past performance is not indicative of future performance. It cannot be guaranteed that the performance of the Fund will generate a return and there may be circumstances where no return is generated or the amount invested is lost. It may not be suitable for persons unfamiliar with the underlying securities or who are unwilling or unable to bear the risk of loss and ownership of such investment. Before making any investment decision, investors should read the Prospectus for details and the risk factors. Investors should ensure they fully understand the risks associated with the Fund and should also consider their own investment objective and risk tolerance level. Investors are advised to seek independent professional advice before making any investment.

Sources: Information and opinions presented in this document have been obtained or derived from sources which in the opinion of Mirae Asset Global Investments (“MAGI”) are reliable, but we make no representation as to their accuracy or completeness. We accept no liability for a loss arising from the use of this document.

Products, services and information may not be available in your jurisdiction and may be offered by affiliates, subsidiaries and/or distributors of MAGI as stipulated by local laws and regulations. Please consult with your professional adviser for further information on the availability of products and services within your jurisdiction. This document is issued by Mirae Asset Global Investments (HK) Limited and has not been reviewed by the Securities and Futures Commission.

Information for EU investors pursuant to Regulation (EU) 2019/1156: This document is a marketing communication and is intended for Professional Investors only. A Prospectus is available for the Mirae Asset Global Discovery Fund (the “Company”) a société d'investissement à capital variable (SICAV) domiciled in Luxembourg structured as an umbrella with a number of sub-funds. Key Investor Information Documents (“KIIDs”) are available for each share class of each of the sub-funds of the Company.

The Company’s Prospectus and the KIIDs can be obtained from www.am.miraeasset.eu/fund-literature . The Prospectus is available in English, French, German, and Danish, while the KIIDs are available in one of the official languages of each of the EU Member States into which each sub-fund has been notified for marketing under the Directive 2009/65/EC (the “UCITS Directive”). Please refer to the Prospectus and the KIID before making any final investment decisions.

A summary of investor rights is available in English from www.am.miraeasset.eu/investor-rights-summary.

The sub-funds of the Company are currently notified for marketing into a number of EU Member States under the UCITS Directive. FundRock Management Company can terminate such notifications for any share class and/or sub-fund of the Company at any time using the process contained in Article 93a of the UCITS Directive.

Hong Kong: This document is intended for Hong Kong investors. Before making any investment decision to invest in the Fund, Investors should read the Fund’s Prospectus and the information for Hong Kong investors (of applicable) of the Fund for details and the risk factors. The individual and Mirae Asset Global Investments (Hong Kong) Limited may hold the individual securities mentioned. This document is issued by Mirae Asset Global Investments (HK) Limited and has not been reviewed by the Securities and Futures Commission.

Copyright 2021. All rights reserved. No part of this document may be reproduced in any form, or referred to in any other publication, without express written permission of Mirae Asset Global Investments (Hong Kong) Limited.

ADDRESS

  • Unit 1101, 11/F, Lee Garden Three, 1 Sunning Road, Hong Kong

TEL

  • 2295 1500

This website is intended for Hong Kong investors only. Your use of this website means you agree to our Terms of use. This website is strictly for information purposes only and does not constitute a representation that any investment strategy is suitable or appropriate for an investor’s individual circumstances. Further, this website should not be regarded by investors as a substitute for independent professional advice or the exercise of their own judgement. The contents of this website is prepared and maintained by Mirae Asset Global Investments (Hong Kong) Limited and has not been reviewed by the Securities and Futures Commission of Hong Kong.