Smart Driving Equality: A Battle For Control Of An Emerging Industry

The automotive industry is undergoing a seismic shift, one that is quietly reshaping the competitive landscape and redistributing power among its key players. The narrative of "smart driving equality" is emerging as the dominant force, transitioning the industry from a luxury-centric model to one where advanced autonomous driving features are accessible to the masses. This revolution is not just about technology; it's about control, profitability, and the future of mobility.

Historically, high-level autonomous driving was a high-margin business, reserved for luxury models equipped with premium hardware like LiDAR, HD cameras, domain controllers, and powerful chips. But as smart driving becomes more accessible, automakers are increasingly taking control of core technologies to protect their profit margins. Major Chinese automakers like BYD, NIO, and XPeng are leading this charge, rapidly rolling out features like navigation on autopilot (NOA), automated parking, and city pilot across mid- and lower-end models priced below 200,000 yuan ($27,400).

BYD's launch of its high-level DiPilot system on models costing below 100,000 yuan at the beginning of 2025 marked a turning point. This move allowed BYD to penetrate deeper into the mass market, potentially increasing its market share and profitability by attracting a broader customer base. Similarly, NIO and XPeng are also rapidly rolling out these advanced features, enhancing their competitive edge and positioning themselves to capture a larger share of the market.

The shift towards smart driving equality is not just about market share; it's about mastering the soul of intelligent driving. Automakers are building their own algorithm teams, mapping systems, and even managing data annotation and simulation training in-house. This vertical integration allows them to reduce reliance on external suppliers and maintain higher profit margins. As a result, upstream suppliers are being pushed to the sidelines, downgraded from solution providers to low-margin parts vendors. Suppliers like RoboSense are now offering low-cost solid-state LiDAR and modular solutions, while Hesai is co-developing customized sensors with automakers.

This industry reshuffling and redistribution of power mean that the real winners will be those companies that can not only manufacture vehicles but also master the soul of intelligent driving. For BYD, NIO, and XPeng, this shift represents a significant opportunity to enhance their market share and profitability by becoming leaders in the smart driving revolution.

The trend towards smart driving equality is being driven by several key technological advancements and innovations. These include the development of advanced autonomous driving systems, the integration of high-level autonomous driving functions into mid- and lower-end vehicle models, and the shift towards end-to-end technology architectures. Leading domestic companies are gradually shifting their smart driving technology route to end-to-end architectures. This shift supports the implementation of intelligent driving systems without high-precision maps and allows for nationwide deployment. For example, Huawei's smart driving system reached 0.5069 million users and 1.453 billion kilometers of smart driving mileage in 2024, with 30.1% of the smart driving time and 45.2% of the mileage in urban areas. This indicates a rapid increase in the acceptance and penetration rate of advanced smart driving.

The penetration rate of L2 and above smart driving was 54.95% from January to November 2024, an increase of 7.7 percentage points over 2023. Among L2 and above smart driving models, the total proportion of models that can achieve high speed/urban NOA functions from January to November 2024 reached 21.4%. This data supports the trend towards smart driving equality and the integration of advanced smart driving functions into mid- and lower-end vehicle models.

In summary, the key technological advancements and innovations driving the trend towards smart driving equality include the development of advanced autonomous driving systems, the integration of these systems into mid- and lower-end vehicle models, and the shift towards end-to-end technology architectures. These advancements are being supported by leading companies like BYD, NIO, XPeng, and Huawei, and are expected to continue to drive the growth of the smart driving industry in 2025 and beyond.