21st century business herald trainee reporter Jiao Wenjuan reports.
"The era of intelligent driving for all is coming!" After the release of the intelligent driving function of the new M7 Pro, Yu Chengdong predicted.
Baojun Yunhai, which was listed a few days ago, comes standard with Lingmiao Intelligent Driving 2.0 Max, bringing intelligent driving into the market of 100,000 yuan; Huawei HarmonyOS announced a time-limited direct drop of 6,000 yuan to 30,000 yuan, and Tesla FSD announced a price reduction of 4,000 dollars to 8,000 dollars in the US market … When smart driving function is becoming the choice of more and more consumers to buy cars, OEMs and suppliers are leading smart drivers into the sinking market.
At present, there are two main types of companies that make great efforts in intelligent driving: one is the main engine factory that insists on the self-developed intelligent driving scheme, and the other is the intelligent driving scheme provider represented by technology companies, and the latter is gradually becoming the "Tier1" in the era of intelligent driving, such as Huawei and Zhuoyu Technology (formerly DJI Vehicle).
The pressure of reducing costs and increasing efficiency of the main engine factory is being transmitted to the upstream intelligent driving manufacturers. The smart driving scheme of 1,000 yuan has become a trend, and the sinking of high-level smart driving also requires suppliers to reduce costs more and more. However, due to the large investment in research and development in the early stage, poor expected income and difficult financing, the superimposed track is gradually crowded, and the performance of second-tier smart drivers is under pressure. In August, Heduo Technology was thundered, and in the first half of the year, the losses of smart driving business of many second-tier suppliers expanded.
"The decline in sales profits is an unavoidable topic in the industry." On October 18th, at the theme forum of "China Automotive Intelligent Technology Industry Trend", Qi Zhenghua, CEO of Magic Vision Intelligent Technology, said, "From car companies to suppliers, there are too many players now (smart driving track). For our enterprises, it is necessary to get through the past few years first, and the dawn of the future is still ahead."
"2025 will be the final point of high-level intelligent driving. After five years, high-level automatic driving will begin to become standard; Ten years later, manual driving will become news. " Chen Liming, president of Horizon, once said at the 2024 World New Energy Vehicle Conference.
Smart driving and sinking again: exploring the market of 100 thousand yuan
Generally speaking, the 300,000-yuan model is an entry-level model equipped with L2-level and above high-level intelligent driving. However, in recent two years, the OEM that shouted "equal rights in science and technology" is trying to bring high-level intelligent driving into a sinking market.
From the demand side, "models with high-level intelligence and pricing in the mass market will be products with higher consumers’ willingness to buy cars." Huang Xili, assistant director of soochow securities and chief analyst of automobile industry, said. Hua Fu Securities also pointed out in the research report that smart driving is becoming the main consideration for more and more consumers to buy cars. The order ratio of Tucki G6 Max version is over 70%, and the order rate of high-end intelligent driving version reaches 60% among the 100,000 orders of the new M7.
Zhijia has dropped to the market of 100,000 yuan. Baojun Yunhai, which was recently listed, comes standard with Lingbi Zhijia 2.0 Max, equipped with a map-free city memory pilot, and the starting price is only 109,800 yuan; Deep blue L07 is positioned in the market of 150,000 yuan, among which the model equipped with Huawei Gankun Zhijia ADS SE solution starts at 166,900 yuan.
Zhang Zhuo, general manager of BYD Auto Ocean Network Sales Division, once said that he would continue to give full play to the advantage of "low cost" and hoped that in the next two to three years, BYD’s self-developed and self-produced intelligent driving system would be fully realized as standard for vehicles with a price of about 150,000 yuan or even less.
However, all major car companies are making efforts end-to-end, accelerating the landing of urban navigation assistance functions.
Gao Yinan, chief analyst of changjiang securities Automobile, believes that domestic car companies will maintain continuous investment in intelligent driving. In the short term, NOA in cities will gradually land, and the "end-to-end" intelligent driving algorithm of domestic head car companies will be pushed one after another. Intelligent driving is expected to change from quantitative to qualitative, and the use experience will be greatly improved.
There are two main ways for car companies to provide high-level intelligent driving services. One is to provide optional packages with high-level intelligent driving functions at specific prices, which are mainly divided into buyout prices and subscription prices; The other type is to use the high-end intelligent driving function as standard through the high-end version of the model, and charge by the car price.
The price of getting on the bus of Zhijia is also constantly decreasing. Since July, Huawei’s ADS high-level intelligent driving scheme has been lowered from 6,000 yuan to 30,000 yuan, and its high-level functional package of Gankun Intelligent Driving ADS SE (Gankun Intelligent Driving Basic Edition) has been purchased at one time for only 5,000 yuan.
On the dark blue model, the standard version price of Huawei Gankun Zhijia ADS SE solution is 20,000 yuan. In the first half of this year, Tesla also announced that the optional price of FSD in the US market will be greatly reduced from $12,000 to $8,000. The 7 V+32 TOPS configuration provided by DJI vehicle will gradually become the standard of 80,000 ~ 150,000 yuan vehicles from this year, and the minimum 80,000 yuan vehicles can have high-order intelligent driving function.
However, the cost of R&D of advanced smart cars is too high. Yu Chengdong once said that Huawei’s advanced smart cars with less than 300,000 yuan are basically sold at a loss. Under the sinking trend of the market, the pressure of cost reduction is being further transmitted upwards, and the intellectual driving technology war is becoming a long-term "capital consumption war" to some extent.
Smart driving suppliers, the fate is divided.
Most OEMs insist on self-developed or imported smart driving schemes. Under the circumstance of reducing costs and increasing efficiency in the industry, smart driving manufacturers are affected.
"Most startups have basically withdrawn from the market in the past two years, and projects and competition have become more and more concentrated. I think this is a very obvious change in the past two years." Li Lele, executive vice president of Desai Siwei and general manager of Intelligent Driving Division, said in an interview with the media.
As a key supplier in the upstream of the industrial chain, the market share of head smart driving manufacturers has further increased. Ping An Securities pointed out in the research report that by the end of August 2024, Huawei had about 320,000 ADS advanced smart drivers.
Head manufacturers are leading the market price and cost price of smart driving solutions to continue to drop. In the context of the continuous exploration of high-order NOA, "cost performance" has become the key word of the intelligent driving scheme. In the mass production boarding stage, the scheme of thousand-yuan intelligent driving manufacturers is becoming a trend, and intelligent driving manufacturers compete for cost control strength. The basic version of DJI 7V+32TOPS costs about 5,000 yuan, the hardware cost of Millimeter Zhixing HP170 is only 3,000 yuan, and the raw material cost of the integrated scheme of black sesame intelligent parking is less than 3,000 yuan.
Intelligent driving has been a "burning money" track from the beginning. Without long-term R&D investment in the early stage, it is difficult to achieve cost control. Under the influence of the price war, many smart driving solution suppliers had poor performance in the first half of this year, and some smart driving manufacturers had difficulties in survival.
Even with orders from BYD, Volkswagen, Chery, Great Wall, Tucki and other OEMs, NavInfo’s volume and profit fell in the first half of this year. According to the financial report, NavInfo recorded a net loss of 20.62% to 360 million yuan in the first half of this year, the gross profit margin continued to drop by 12.5 percentage points year-on-year to 33.11%, and its smart driving business revenue decreased by 13.7% year-on-year.
In August this year, due to the tight capital chain, Heduo Technology has begun to dissolve the core departments such as data and R&D and suspend R&D activities. It is understood that the mass production plan of Heduo Technology is far less than expected, which leads to problems in the company’s cash flow.
Previously, Heduo Technology mainly provided regulatory module support for Guangzhou Automobile’s intelligent driving scheme. According to the plan, this high-level intelligent driving scheme will be carried on Guangzhou Automobile Chuanqi model. However, due to the operational difficulties caused by the break of the capital chain, GAC’s smart driving suppliers have become companies such as Baidu and Momenta.
The current income of smart driving manufacturers can be affected by the fact that the order quantity under market competition is less than expected, or the delay in the delivery of the models of the main engine factory. In the first half of this year, the growth rate of operating income of Zhongke Chuangda’s smart car business slowed down, and the growth rate dropped by more than 37 percentage points year-on-year. The financial report shows that Zhongchuang Keda recorded a net loss of more than 330 million yuan in the first half of this year, more than last year. Zhongke Chuangda said that in the first half of the year, the growth rate of the company’s smart car business temporarily slowed down due to unfavorable factors such as the prolonged acceptance period of automobile manufacturers and the less-than-expected shipment of some manufacturers’ models.
Orders are difficult to sign, and many second-tier smart driving manufacturers mainly get orders through binding with the OEM. An insider of a smart driving supplier told reporters, "Now L2 is already the price of cabbage, but the competition for signing this kind of order is fierce, and there are not enough porridge."
The iterative acceleration of intelligent driving technology update and "end-to-end" have become the focus of this year’s efforts. "End-to-end is the mainstream direction and requires internal resources from all sides." A smart driving R&D engineer told reporters, "However, this also means that the company’s investment continues to increase." According to public information, Huawei’s expenses related to smart driving are as high as $1 billion per year, and Tucki plans to invest a total of 3.5 billion yuan in research and development of "AI technology with smart driving as the core" this year.
For some smart driving suppliers, the continuous R&D investment has not been filled by timely revenue and financing, which is causing profit losses. The R&D expenditure of Jingwei Hengrun, which has been deeply involved in L4 high-level intelligent driving, is increasing year by year, with a year-on-year increase of 36.03% to 630 million yuan in the first half of this year. But the income has not kept up with the expenditure on research and development. The financial report shows that Jingwei Hengrun recorded a net profit loss of 275% to 330 million yuan in the same period. Jingwei Hengrun originated from the ADAS business of automobile hardware, and is now taking high-level intelligent driving as its main force direction. However, according to Jingwei Hengrun, the company currently has high-speed NOA customer projects in mass production, and it is expected to enter the mass production delivery state next year.
The financing problem can also recreate the next crop. At present, the financing market tends to be cautious, and capital is flowing to NOA high-end intelligent driving suppliers. Judging from the public information, the last round of financing of smart driving star enterprises, including Black Sesame and Horizon, all took place in 2022. A few days ago, Yihang Intelligent, a supplier of self-driving mass production solutions, completed hundreds of millions of C-round financing. The future goal of Yihang Intelligent is to be a medium-to-high-level solution with moderate computing power and realize functions such as high-speed NOA and urban memory navigation. However, it is not so easy to get financing. According to insiders, investors will prefer companies that have already landed projects or have fixed-point cooperation with OEMs.
Another way to seek financing is to go public. Since the beginning of this year, autonomous driving manufacturers have "teamed up" to sprint IPO. According to the prospectus, from 2021 to the first half of 2024, the cumulative loss of Wen Yuan Zhixing, a self-driving unicorn, exceeded 5.1 billion yuan, and it was twice postponed to seek listing financing. Even Horizon, the highest-paid autonomous driving industry in China, is seeking to go public.
More new players-technology companies cross the border, and smart driving solution providers may usher in an accelerated reshuffle. Defying Technology and Iflytek entered the market in the second half of last year, and based on their accumulation in AI and technology, they released their own intelligent driving solutions.
Head manufacturers are making efforts to sink into the smart driving market, and companies without financial strength will face the crisis of elimination. Before the final, high-level intelligent drivers will face a market battle.