Taking over from ChatGPT, the most explosive track of this year is coming!

Original source: Star Map Research Institute

Image credit: Generated by Unbounded AI‌

Smart cars may become the next most explosive new track in the market.

After Volkswagen joined hands with Xiaopeng, the field of smart travel ushered in another important marriage. On August 4, the media reported that Toyota China signed an agreement with Pony.ai and GAC Toyota to establish a joint venture company, with a total investment expected to exceed 1 billion yuan, focusing on smart driving-related businesses.

Judging from the industrial development in recent years, the development of smart cars is coming to a critical inflection point, and the industry is heading for an explosive period. The encouragement of policies, the approach of the turning point of the industry and the explosion of industrial investment may drive smart cars to become the main line of the next stage.

**The first is policy encouragement. **For the development of any industry in China, the impact of policies cannot be avoided. A typical example is the new energy industry. It is the realization of the "double carbon" goal that has opened up the explosive growth of new energy in the past three years. Since the beginning of the year, policies have been increasing the encouragement of smart travel.

In June, the Ministry of Industry and Information Technology proposed in a press conference to "support the commercial application of L3 and higher autonomous driving functions";

In July, the Office of the Beijing High-Level Autonomous Driving Demonstration Zone announced that it would officially open the pilot commercialization of "unmanned vehicles" for intelligent connected passenger vehicles. Automobile industrial eco-commercialization pilot;

Also at the "World Artificial Intelligence Conference" on July and July, Musk emphasized that fully autonomous driving can be achieved by the end of this year;

At the end of July, the Ministry of Industry and Information Technology and the National Standards Administration jointly issued the "Guidelines for the Construction of the National Internet of Vehicles Industry Standard System (Intelligent Connected Vehicles) (2023 Edition) (hereinafter referred to as the "Guidelines"), proposing that in the first stage (to 2025), the system can be formed An intelligent networked vehicle standard system that supports the general functions of combined driving assistance and automatic driving. The second stage (to 2030) is to fully form an intelligent networked vehicle standard system that can support the coordinated development of single-vehicle intelligence and networked empowerment. The most important significance given by the "Guidelines" is that with the formation of industry standards, the subsequent commercial application of intelligent driving L3+ and industry legislation will be a matter of course. There is no doubt that the policy will set the tone for the future "intelligent trend" of automobiles. .

**So, from the perspective of the future development of the automobile industry, the trend of automobiles from traditional fuel to electrification and then to intelligent development has been confirmed. **

**Secondly, and most importantly, the inflection point in the development of the smart car industry is approaching. **

Judging from the development of the automobile industry in recent years, new energy has become the general trend of the development of the automobile industry. Under the situation that new energy vehicle manufacturing has become a red sea competition, automobile intelligence has become the next industrial revolution that most car manufacturers are betting on . Therefore, the concept of smart cars has been staged by the market in the past few years, but judging from the reaction of the capital market, the market does not buy it. After the staged hype, the concept of smart cars has not become mainstream in the market. The key reason for this is that in the first two years, the concept of smart cars may be too advanced, the exploration of smart car technology in the industry is not yet mature, and the upstream and downstream of the industrial chain have not yet realized substantial performance. In sharp contrast to this is the new energy track. In the three years from 2020 to 2022, behind the uninterrupted rise of new energy, in addition to the encouragement of policies, is the annual doubling of the net profit of the upstream and downstream of the industrial chain. The strong fundamentals support the continuation of the new energy market. As far as the smart car industry is concerned, policy encouragement and the approaching of the inflection point of industrial development may bring the fundamentals of smart cars to an inflection point.

The approach of this inflection point can be seen from several aspects:

The first is the basis of industrial change - the electrification of automobiles. Electrification is the foundation of intelligence. Judging from the data on the penetration rate of new energy vehicles in China, under the rapid growth of sales of new energy vehicles in the past few years, the current monthly penetration rate of new energy vehicles has stabilized at a level above 30%. (That is, more than 30% of monthly car sales are new energy vehicles), which makes the car's intelligence a basic foundation.

In addition to domestic demand, overseas sales have also achieved outstanding results. my country's new energy vehicles are transforming from a "chaser" in the global auto industry to a "leader" in the industry. In 2021, China's auto exports will surpass South Korea; in 2022, it will surpass Germany; in the first quarter of this year, Realized the transcendence of Japan. According to data from the China Association of Automobile Manufacturers, auto companies exported 2.14 million vehicles in the first half of this year, including 534,000 new energy vehicles, a year-on-year increase of 1.6 times.

** With the sales volume among the top global car companies, it is the confidence of domestic car companies to lead the intelligentization of cars. **

Second, the intelligentization of automobiles has moved from concept to reality, and intelligentization truly contributes incremental value to automobiles. In addition to Tesla, many new car manufacturers and established car manufacturers have launched intelligent assisted driving solutions.

For example, Musk posted on the "X" platform that Tesla is currently developing "the last piece of the puzzle on the FSD artificial intelligence (AI) puzzle" - "vehicle control", which is expected to achieve fully autonomous driving by the end of this year;

Ideal announced that it will launch a non-mapped version of urban NOA (that is, automatic assisted navigation driving) and commuter NOA in the second half of the year;

Xpeng will launch a full-scenario XNGP (Xpeng Intelligent Driving System) without pictures in the second half of the year;

Huawei's ADAS 2.0 in the second half of the year will also realize full-scenario automatic driving without images;

In addition, there are many industry chain players who want to fully introduce large models in the field of algorithms and so on. It can be said that intelligent assisted driving is ushering in the stage of a hundred flowers blooming, just like the stage of lithium battery innovation, this kind of competition among hundreds of schools of thought will greatly promote the commercialization of the industry.

Third, the penetration rate of automobile intelligence is constantly increasing. According to Gaogong Intelligent Vehicle data, in April this year, the penetration rate of L2 and above intelligent driving of new passenger cars in China was about 34%, which is still at a low level, and the penetration rate of many relatively high-level intelligent equipment is even lower, such as The penetration rate of smart cockpit domain controllers is about 12.2%, and the penetration rate of autonomous driving domain controllers is about 7.0%. In the process of large-scale promotion of urban intelligent assisted driving, the penetration rate of these devices still has great room for improvement. With the increase in the penetration rate of smart cars, related auto parts will also benefit greatly, which in turn will drive the increase in the profits of the industrial chain.

**Finally, it is the catalyst for industrial investment. **In the past two years, we can see a lot of funds entering the smart car field at the industry level, as well as the recognition of the development of domestic smart cars. In addition to the marriage between Volkswagen and Xiaopeng we mentioned in the previous article, the joint venture between Toyota China, GAC Toyota and Pony.ai, the cooperation between Audi and Zhiji, the cooperation between Saudi Arabia and Gaohe, and the capital injection of the United Arab Emirates to Weilai, all It shows the value recognition of "new forces" by mainstream players in the auto industry and even global big funds. The injection of these well-capitalized traditional car companies and industrial investment funds will definitely accelerate the implementation of smart cars.

From an investment point of view, the smart car industry chain has another advantage. At present, the congestion of funds for smart car transactions is extremely low, and there are few big funds entering smart cars on a large scale. Judging from the Smart Auto Index (930721.CSI), the scale of products based on the index is less than 3 billion, so there is no need to worry about overcrowding when planning ahead.

[Note: The market is risky, and investment needs to be cautious. In any event, the information or opinions expressed in this subscription account are for exchange of views only and do not constitute investment advice to anyone. Except for special remarks, the research data in this article is supported by Flush iFinD]