When tokens are down, China sees a booming green auto industry


The car tokens are out of order. Automakers are lost.

The pandemic has rewritten the rules for a multitude of industries. The automotive industry is no exception, especially as it rapidly moves towards smarter electric vehicles (EVs). In the past century, pain has never struck closer to home than last year, amid factory shutdowns, severe supply chain disruptions and decimated consumer confidence. Chips, the crop of automobiles in the 21st century, are a sore point in this crisis phase.

Amid the global auto industry disaster, a few Chinese EV newcomers are making a splash, with Li Auto and XPeng sales up more than 200% in July year-on-year. The rebound was driven in part by strong demand from the world’s largest auto market for electric vehicles as the country recovers from the grueling pandemic, but mostly by a secure supply of automotive chips.

China is on the path of rapid semiconductor development. But AI autochips have only become China’s tech darlings in recent years.

Over the years, China has seen rapid development of AI algorithms and formulated policies favorable to electrification and smart manufacturing. “Chinese companies have overtaken many of their Western counterparts in AI-enabled systems-on-chips,” said Zhang Yufeng, vice president of Horizon Robotics, a Beijing-based startup that engages in the development of an AI computing platform, and the first Chinese company to mass-produce AI processors for the automotive industry.

Along with rich access to capital, Chinese consumers have a natural inclination towards new technological products, creating a vigorous market for electric vehicles and thereby opening up room for the application and development of auto AI chips. By 2025, China is committed to achieving 20% ​​of its annual sales of plug-in hybrid or battery-powered cars.

Li Auto’s Li One electric car is shown at the 2019 Shanghai Auto Show, April 2019. /VCG

Li Auto’s Li One electric car is shown at the 2019 Shanghai Auto Show, April 2019. /VCG

Booming electric vehicles are pushing automotive chips – the brains that power these cars – to the forefront of the world stage. Since digital cars are heavily software-centric, any timely software updates depend on the support of AI computing platforms, Zhang told CGTN.

As autonomous driving becomes a standard feature for electric vehicles, automakers are scrambling to make their self-driving cars not only capable of navigating highways, but also local streets brimming with complex traffic conditions.

Automakers want to accelerate the processing and computing power of AI chips. A number of automotive giants, from Volvo to General Motors, are gearing up to go all-electric at some point in the future. Even Apple is considering an iCar as its next titan. This trend is prompting silicon giants to foray into the automotive market, leading to increased competition for AI automotive chips.

Mobileye, a Jerusalem-based chip giant acquired by Intel in 2017, is known for its leading position in providing chips supporting advanced driver assistance systems. Nvidia, an American multinational that began by designing chips used in high-performance games, has processors with computing power normally seen in data centers for self-driving vehicles. Tesla, after its public break with Mobileye, began building its own chips for its Autopilot functionality.

An employee drives a Tesla Motors Model S electric automobile, equipped with Autopilot hardware and software, hands-free on a highway in Amsterdam, the Netherlands, October 27, 2015. /VCG

An employee drives a Tesla Motors Model S electric automobile, equipped with Autopilot hardware and software, hands-free on a highway in Amsterdam, the Netherlands, October 27, 2015. /VCG

“Chinese automakers were at a disadvantage when it comes to geographic proximity to suppliers,” said Wang Kai, chief technology officer of Li Auto. Since most Chinese automakers sourced chips from American, European or Japanese chipmakers, it takes much longer for Chinese automakers to get the chips and make timely updates.

“A minor update of the electronic systems of a car where certain chips are used would cost us two months, from discussion with the supplier, to signing a contract, to testing,” Wang told CGTN.

Lacking the most efficient software performance in these “driving computers”, automakers need immediate response and first-hand information from their chip suppliers.

In its latest move, the company said it will equip its 2021 Li One, an extended-range electric passenger vehicle, with two self-driving chips from local vendor Horizon Robotics, instead of Mobileye’s EyeQ4 chip, which was used in its 2020 model.

Although Mobileye offers mature solutions, they are nevertheless “black box” solutions that do not allow automakers to plug in their own software, Wang said. On the other hand, Horizon Robotics’ chips are open to collaboration, giving automakers access to continuously update software and features.

It is essential that automakers maintain close contact with chip developers so that chips can better run algorithms in various sensors as well as track driving scenes. Li Auto’s cooperation with Horizon Robotics, which began in April, has paid off.

“Now, a crescendo to a system-on-chip only takes a few hours,” Wang noted. “A hundred years ago, when the combustion engine was at the heart of the car, car manufacturers were striving to reduce costs. Today, with the high demand for smart cars, technical efficiency has become the norm dominant.”