As 2025 kicked off, the landscape of autonomous driving in the automotive industry has become increasingly intricate and competitiveWith the release of BYD's advanced driving system "Heavenly Eye" on February 10, the conversation around intelligent driving has intensified significantlyThis new system has brought Level 2+ intelligent driving functions to vehicles priced as low as 69,800 yuan, marking a shift towards what is being termed "intelligent driving equality." Just ten days later, Huawei held a technology launch for its luxury model priced over a million yuan, where Level 3 autonomous driving was spotlightedThis transition aims to create a leap from passive intelligence to fully autonomous operation, targeting the upper echelons of the market.

This ongoing evolution exemplifies two competing dynamics in China's intelligent automotive sector: on one hand, there is a crawl towards cost reduction and accessibility in mid-range intelligent driving technologies, while on the other, there is a relentless push upwards towards advanced autonomous features in luxury modelsIn a discussion with industry experts, UBS's automotive research lead, Gong Min, shared insights into how the high-end car market in China is relatively smallAutomakers are not merely focused on selling high-ticket items to boost immediate profits; instead, they pursue a dual strategyFirst, they aim to enhance their brand image, which in turn could support the sales of their lower-tier models priced at 300,000 to 500,000 yuanSecond, by piloting cutting-edge technologies in high-end models, automakers gather valuable experience which eventually translates to enhancements in their mid-tier offerings.

This evolving narrative suggests that the intelligent driving competition for 2025 will be increasingly significantIndeed, several major automotive companies have recently unveiled strategies to democratize intelligent driving technologies, making advanced systems available without raising vehicle prices

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For instance, on February 9, Changan Automobile launched the "Beidou Tian Shu 2.0" initiative, which aims to transition intelligent driving from being a luxury feature to a standard inclusion for the general populace, with proposals to equip vehicles priced in the 100,000 yuan range with LiDAR technologyShortly after, BYD announced its own initiative to integrate advanced intelligent driving assistance systems across its entire lineup, ensuring that even entry-level vehicles like the 69,800 yuan Seagull model would boast intelligent features, thus covering a wide price range.

Recently, GAC has partnered with suppliers such as Momenta and Suzhou Huacheng to deepen their collaboration, striving for a higher ratio of smart driving features at competitive costsOther manufacturers like Dongfeng, Changan, Great Wall, and Geely are exploring similar production strategies for mid-level intelligent driving systemsSuch measures have the potential to cater to everyday use-casesFor example, the Heavenly Eye system in BYD vehicles relies predominantly on visual data while integrating LiDAR in certain editions for enhanced functionalityThis system has amassed a database of over 4.4 million vehicles, enabling it to accomplish advanced autonomous tasks, such as real-time road monitoring and automatic lane changing on highways.

This democratization of intelligent driving capabilities signifies a critical point in China's automotive landscape, where the general populace is expected to widely embrace such technology by 2025. With models like BYD's Seagull and the Han, equipped with the Heavenly Eye-C technological solution, consumers will enjoy capabilities such as intelligent lane changes, overtaking maneuvers, and automatic parking featuresThe sensors include 12 cameras, five millimeter-wave radars, and twelve ultrasonic radars, but notably, do not employ the more expensive LiDAR systemsCommentary from industry insiders hints at a significant turning point in the emergence of intelligent driving technology — it signifies the arrival of a communal, widespread intelligent driving era.

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Zhang Kangkang from Tsinghua University's automotive department attributes the boldness of major manufacturers to promote "intelligent driving equality" to the maturing state of China's autonomous driving supply chain and talent poolAs the supply-chain evolves, the costs associated with intelligent driving systems are also expected to drop rapidlyIn this era of technological democratization, some revenue-generating avenues may be eroded as widespread adoption increasesInitially, the sorting through subscription models for intelligent driving features seemed viable, but with the rise of intelligent features in budget segments, monetizing such systems becomes less feasible for manufacturers and ultimately benefits consumers while demanding more innovative solutions from companies.

In a recent report, CITIC Construction Investment pointed out that brands like BYD are paving the way for the widespread adoption of mid-tier intelligent driving technologiesCurrently, in 2024, the penetration rate for Level 2+ advanced driving systems in China stands at approximately 8.5%. However, with a plethora of new models from BYD and other domestic manufacturers entering the market, analysts project an increase in L2+ penetration rates to over 30%. As we step further into the era of universal intelligent driving, end-to-end model technology is becoming the mainstream focusAutomotive companies strive to implement mainstream features like automatic parking, adaptive cruise control, and lane-keeping assistance—leading to less substantial differentiation in intelligent driving functionalities across brands.

The tussle within the high-end market—where luxury vehicles dabble in advanced intelligent driving technologies—underlines a clear separation of strategies: mid-tier intelligent driving focuses on cost reduction while high-end segments continuously seek innovation and sophisticationFor instance, following BYD's announcement of its advanced intelligent driving systems on February 10, Huawei's consumer business group chairman Yu Chengdong responded on social media, illustrating the chasm between merely functional intelligent driving tools and those that prioritize user experience and safety—a commentary interpreted as a direct response to BYD's advancements.

Huawei’s technical release event on February 20 for the luxury model known as "Zunji" was a remarkable showcase of the culmination of years of collaboration between Huawei and JAC

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The Zunji S800 is positioned within the million-yuan ultra-luxury segment, featuring a full-stack integrated central domain-controlled digital platformIts core functionality includes a "5D crab walking" mode along with advanced awareness and path planning capabilities.

Despite the promise of L3 autonomous driving architecture, legal constraints limit current systems to Level 2 advanced assisted driving stagesThe Zunji S800 aims to push the envelope by fully adopting L3 features upon release, thus heralding a new phase in intelligent driving competition in the sectorThe rapid integration of automotive manufacturers with tech firms facilitates technological advancements in the fieldSuch partnerships often enable traditional manufacturers to acquire capabilities they would have otherwise struggled to develop independently.

Ultimately, according to various insights, while brands like Huawei dominate the industry with a notable reputation for their driving technologies, the affordability and effectiveness of these systems still need to be publicly validatedMarket acceptance of autonomous driving features above the million-yuan threshold remains tepid, evidenced by the fact that vehicles in these luxury segments constitute merely 1% of overall automotive sales in ChinaThe challenge remains to convince affluent consumers that these innovative and high-tech solutions offer enough value and reliability to justify their steep prices.

Experts argue that achieving recognition in high-tier automotive segments goes beyond technological prowess and premium pricing; it requires establishing a brand identity through effective marketing, premium services for upscale consumers, and the cultivation of exclusive user communitiesDespite the rapid growth of China’s electric vehicle market, it is important to recognize that the most affluent consumers remain cautious regarding the adoption of electric vehicles.

The consensus among automotive analysts illustrates that intelligent driving capabilities should not be mere spectacles; they must prove their worth through tangible user satisfaction

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